Choosing An Accounting Information System For B Bakery

Business processes of B Bakery

Discuss about the Accounting Information System for B Bakery.

The report is based on selecting an Accounting Information System (AIS) for B Bakery, a family firm that is supplying bread and confectionary products to various businesses such as supermarkets. It defines the business processes of B Bakery to become familiar with their business operations. In order to implement AIS, it reflects on the business requirements to achieve their objectives. In order to meet with IT investment objective, the report summarizes the features of the system (Christauska and Miseviciene 2012). Finally, software and vendor are selected dependent on business requirements of B Bakery. Two accounting software package vendors such as SAP as well as MYOB are compared and contrasted.

B Bakery is a family-owned firm, which is, employed around 70 employees and the sales revenue increased to $13.5 million. The business is operating over 50 years, supplying bread, and confectionary products to the supermarkets as well as pub chains. Due to increase in product range, B Bakery experienced a growth in their business. In the competitive marketplace, Bakery losses their key accounts of producing their products at competitive price. In order to expand in the bakery market, the firm decides to implement AIS in their organization for storing as well as processing of accounting data. The system tracks the accounting activities of the firm. The following figure shows the business processes of B Bakery with its business, corporate and support functions.

Figure 1: Business processes of B Bakery

(Source: Moghadam et al. 2013, pp-13269)

Procurement: B Bakery procures their products from the supermarkets as well as pub chains. The firm acquires via competitive bidding process.

Inbound logistics: Bakery is concerned of receiving as well as storing of products, handling of raw materials with control over inventory (Moghadam et al. 2013).

Manufacturing: The firm concerns on packaging of the products and involves with warehousing of the finished goods (Prasad and Green 2015).

Inventory Management: Bakery focuses on status of inventory, purchase of their products and expiration of products.

Research & Development: The firm manufactures innovative products for their organization so that more customers are attached towards their business (Kanellou and Spathis 2013).

Product Management: The product is managed by managing the orders of products. The firm is dealing with the customers with an affordable price of products.

Design of product: The products are designed with innovative designing.

Business Operations

Integration of product: The firm conveys their messages to their customers with integrating their product in the market (Seethamraju 2015).

Testing of product: The quality of the product is tested using effective machineries, as within this bakery industry, quality is most important factor or operations.

Sales: The organization deals with the sales manager regarding the cost of the products, which should attract the customers.

Marketing: The marketing department tracks the total sales of the products. Before dealing with the customers, the firm gives advertising of the products on the internet or any other communication channel, so that before purchasing the product, the customers can get to know about the product features and price (Svobodova, and Cerna 2016).

Development: The development team develops unique products with best quality.

Customer service: The firm focuses on the requirements of the customers.

Operations Management: The firm discusses the dealings of their products with the operation manager. The Bakery collects the items of the firm after its manufacturing.

IT: With the use of internet, the Bakery can interact with their customers.

Corporate affairs: The firm has affair with other businesses to expand their operations in the market and acquires a large market share.

Legal: The firm follows their organizational policies to conduct their operations. The firm is following all legal procedures to do their sales (Liu 2015).

Accounting and Finance: In order to process with financial assets, Bakery adopts accounting information system to store or process of accounting data (Soudani 2012).

HR: This department offers with disciplinary rules as well as regulations and gives a better working environment to the employees.

From the above mentioned business processes, the following are the business processes, which are indispensable to be performed in B Bakery such as:

Sales and Marketing: The sales and marketing operations of Bakery are dependent on their product as well as customer. The marketing of product focuses on product positioning so that their service will be unique. The firm understands their sales process and product requirements (Ismail and King 2014). The customer marketing supports the customers by taking their feedback on the product. Engagement of the customers builds trust, which leads to greater revenue.

Supply Chain Management: Bakery has a good relationship with the suppliers, wholesalers and retailers. This good relationship ensures that the customers can receive the products at the right time at an acceptable cost. Even it can increase the brand reputation and image (Hall 2012). The firm is going to implement AIS to improve their supply chain. 

Product Development

Accounting & Finance: The purpose of accounting and finance function of Bakery is to keep record of their financial activities such as amount of purchase and sale of their products. The AIS keeps track of the financial history of their sales. It consists of some of financial information such as operational expenses, cash flow, capital expenditures as well as investments (Amran et al. 2014). In order to keep track of the financial operations, it increases their profitability.

HRM: The HRM function of the firm manages the employee relations. A good relation among the employees helps in increase in productivity. All the employees should obey the rules and regulations of the company to form a good work cultural environment (Islam et al. 2012). Proper alignment of the organizational structure helps the firm to manage their payroll and operational businesses.

The decision behind implementation of AIS changes the accounting tasks those are processing in the business of Bakery. The system is placed centralized in the firm where all the accounting transactions are entered as well as saved. The main outcomes of this system are to speed up the handling of tasks, entering data into the system, correcting of transactions data and generating reports (Chen et al. 2012). The business objectives of the organization are to expand their business and compete with their competitors by providing them with innovative products (Hejazi, Halpin and Biggs 2014). The firm wants to secure their data into the system. Therefore, AIS helps the firm to enter the transactional data into the system, which is safe. The chances of losing of data are reduced when the firm is performing regular backups of the system (Ajit, Donker and Patnaik 2014). The manual process of the firm results in loss and damage of data more easily. The main objective to implement these AIS for Bakery to collect as well as process accounting tasks on selling of products, which help the managers of the firm to prepare transactional reports.

Due to implementation of AIS in Bakery, it maintains the financial processes of the firm. The accounting software sets up documents like the trial balance, ledger as well as journal. Those are recorded into the database of the computer (Saleh Shatat and Mohamed Udin 2012). The system is functioning such as billing of the product, budgeting as well as setting up of payroll. The system helps to cut the payroll for the staffs. The important responsibility of the accountants of the firm is to protect the data (Bradford 2014). Finally, it is identified that the outcomes of the AIS are to meet with the satisfaction level of customers, speed up business process, budgeting and billing, tracking of transactional data, inventory operations and accountability of process. 

Corporate functions

Due to increase in competition as well as growing demands of Bakery products, the firm decides to look for increase in software as well as IT investment. It is seen that IT investment of Bakery leads to grow their business process as well as improvement in competitiveness (Olson, Chae, and Sheu 2013). AIS are implemented in the firm to conduct some of the activities such a purchase as well as handle of the foods within the business inventory, planning for production and quality of product. It also manages picking and transporting of orders, controlling of cost and accounting as well as payroll accounting (Galy and Sauceda 2013). The following are the possible software features, which the firm is necessary to attain an IT investment purpose:

Manage of online orders: After making investment into the IT infrastructure, Bakery desires to develop their firm’s web portal to manage online orders. It also maintains the inventory of the firm and reaches their customers in less time (Ahmad and Cuenca 2013). Management of online orders makes their business process more competitive. Online ordering increases the sale of bread as well as confectionary products (Gebhart, Glines and Foss 2013). If the system can manage the online orders, then it adopts with new innovative way to give comfortable services to the customers while boosting their capability to track the activities of customers.

Automatic updates of data:  AIS should update the data from the firm automatically when it becomes out-of-date software. Even the financial practices as well as regulations related to the software change over time, therefore, it is vital to keep the system up-to-date so that it gives fast and automatic updates of data (Woodward and Tan 2015). If the data should update automatically, then the users are not required to update it. The updated data gives best quality information to the users.

Security and Confidentiality: The system should able to store sensitive data of the firm, so that it can keep the confidential data more secured. Security features should provide protection to the firm’s documentation and network in the system (Rajasa and Faturachman 2015). The proposed AIS system should have confidentiality feature so that it protects the information on the system by avoiding the illegal person to access the data. Therefore, the requirement of information security is to prevent leakage of data as well as increase in information reliability (Ng, Harrison and Akroyd 2013). The system should have a secure socket layer (SSL) which should ensure the security of the confidential data. 

Support services

Flexible Reporting: Reporting feature is flexible within the AIS as it generates reports of balance when necessary and intended for some period in the accounting period. The report is created automatically and it is arrived into the email inbox (Ismail and King 2014). It creates reports on the invoices of client.

Ease of access and better speed of processing: The proposed AIS should have better ease of access as well as processing speed. It provides faster responses and resolves the customer’s queries (Galy and Sauceda 2013). Within the business operations of Bakery, the system should execute faster for various business processes. It also provides support in decision making related to their products.

Database Management: One of the important features of the AIS is to store the data and create the data easy to recover by the users of the system. The database type determines that respond speed of the information system (Kanellou and Spathis 2013). If the system should use of relational database, then it stores the data into separate table. The stored data is accessible to the users quickly as well as professionally.

Comparability: Quality of the information enables the users to recognize the changes within financial phenomenon over a period. The reports on accounting are comparable across the firm in order to identify the similarities (Soudani 2012). The reports are belonged to a period, use of common unit of measurement as well as reporting format. If quality of the information is comparable, then it should be understandable by the users of the system. It helps to understand the content of the financial statements as well as reports. The accounting system is easy to access the reports in order to identify the business trends.

The available three software packages vendors for B Bakery are SAP, MYOB and Xero. For B Bakery, medium range ERP category of accounting software is suitable for the firm. This category of software gives benefit to the business as it is highly integrated with other modules of the firm (Ajit, Donker and Patnaik 2014). It reduces the price for the sales order processing, lessens the time used to determine the selling price as well as rise in cash flow. It gives accurate as well as timely information to the users of the system with improved management of the billing process (Hejazi, Halpin and Biggs 2014). It leads to faster expense and decreases accounts receivable. There is increase in revenue due to less outages of stock, therefore when the products are out of stock, and then it reduces loss of revenue. The satisfaction level of the customers is increased due to advanced accessibility of firm’s products.

Business requirements of B Bakery

SAP, it is best for medium size software packages. It aims to automate the business functions of Bakery in financials and operations functions. Due to SAP, Bakery enjoys better productivity among the workers of the firm (Olson, Chae and Sheu 2013). It relies on data logging stages in order to enter information as well as generation of reports. This software package also handles many accounting functionalities. SAP has a significant cost savings features; therefore, it is suitable for B Bakery. It tracks the data of the firm and then generates reports about purchasing of bread as well as confectionary products (Ahmad and Cuenca 2013). The users are asking for customized features for this software package.

Accounting software packages	Functionalities of each software package
	Compare	Contrast
	Software Vendor: SAP
SAP Business One and SAP Business ByDesign	1. Both are designed for medium sized enterprises. 2. Both have the features of purchasing, sales, inventory, business partners, production, material requirements planning and human resources (Islam et al. 2012). 3. It allows the employees to access this accounting software package with use of the mobile application. 4. It improves interaction with the business partners in order to build informed decisions (Chen et al. 2012).	SAP Business One software: 1. It captures the information regarding the business into a single system. 2. This solution helps the firm to face the business challenges and offers with decision-making solutions (Galy and Sauceda 2014). SAP Business By design software package: 1. It is delivered on requiring by the SAP within monthly payment of smallest of10 users (Hejazi, Halpin and Biggs 2014). 2. It relies on the security of data centers, which are maintained as well as monitored by the experts of SAP (Bradford 2014). 3. This software analyzes the end-to-end business processes of the firm.
Software vendor: MYOB
AccountRight Live and MYOB Essentials	1. This software package can track the inventory with a capability to handle complex payroll as well as billing of the products (Curtis 2015). 2. Both are used to produce sales invoices for the firm. 3. It will track as well as control the stock of the firm such as the customer’s buying and selling information (Rajasa and Faturachman 2015). 4. It manages to create business reports, and the account is assessed anywhere where there is an internet connection.	AccountRight Live: 1. It allows the developers to access the functionality as well as data of this MYOB software package (Ng, Harrison and Akroyd, 2013). 2. It retrieves the information on the accounts as well as manages over the transactions for the firm. MYOB Essentials: 1. There is no employee portal, and it has no capability to hold back with additional taxes. 2. It cannot lodge the report of payment summary directly from the accounting software (Bradford 2014). 3. This software package runs at an extremely low speed. 4. It is opened up to 9 windows in order to view various data of transactions (Curtis 2015).
Software vendor: Xero
Xero	1. It offers cloud based accounting system to the business firms (Smith 2015). 2. This software package creates as well as sends quotes to the customers who are processing online. Therefore, this online cloud based system helps to create invoice, purchase, and bill based orders easily (Woodward and Tan 2015). 3. The suppliers send invoices to the customer’s account of Xero that offers an interactive timeline for an alternative of batch payment.  4. It gives expenses report, which is done by the employees (Chen et al. 2012). 5. It can be login from anywhere. 6. It has features of payroll, inventory and invoicing (Ajit, Donker and Patnaik 2014). 7. It is accessed with the use of a mobile application.	1. The security features of this software package are based on a use of passwords by the accountant of the firm (Ma 2015). 2. The software is accessed by the users as long as there is activation of subscription. The services of this software are subscribed on a monthly basis (Gebhart, Glines and Foss 2013).

SAP software vendor is the best accounting software vendor as this accounting software combines the functions of financial accounting in order to manage the complexities within the firm. It gives a greater level of transparency among the business firm, B Bakery. It depends on information logging stages with a specific end goal to enter data and era of reports (Kanellou and Spathis 2013). This software product handles numerous bookkeeping functionalities. SAP has a huge cost funds highlight; in this way, it is reasonable for B Bakery. It tracks the information of the firm and after that creates reports about obtaining of bread and additionally confectionary items (Svobodova and Cerna 2016). The clients are requesting modified components for this accounting software package. The features of SAP are as follows which makes sure that this software package is suitable for Bakery business:

It records the financial processes into the general ledger.

It supports reporting as well as other financial accounting standards (Ismail and King 2014).

It is highly integrated with additional modules such as sales and distribution, business intelligence, CRM and others.

It decreases the cost for the business request preparing, reduces the time used to decide the offering cost as well as a reduction in income (Ajit, Donker and Patnaik 2014).

It gives precise and additionally convenient data to the clients of the framework with an enhanced administration of the billing procedure. It prompts quicker cost and reductions money due.

There is an increment in income because of fewer outages of stock, in this manner when the items are out of stock, and after that, it diminishes the loss of income (Bradford 2014). The fulfillment level of the clients is expanded because of innovative availability of association’s items.

Outcomes require from the processes in order to gain business objectives

Among various modules of SAP, sales, as well as distribution module, is a most important module for the Bakery business. This software package helps to manage the order as well as cash process, which is related to transactions. With a use of this module, the firm is managing sales orders, products delivery, pricing as well as billing (Olson, Chae and Sheu 2013). This module provides easy managing of activities with the use of broader sales and distribution development.

This new SAP accounting software improves the accuracy as well as the security of the data and information related to purchasing information of Bakery business. Any others or any third party persons do not access those data and information.

Through the use of SAP system, it provides a better quality of services to the customers. People of sales, as well as customer services, are interacted with their clients better to improve their relationships (Abbott and Webb 2013). Therefore, a better relationship with the customers helps to provide faster as well as accurate information to the clients with better quality.

Finally, with the use of SAP software, the data and information are not distributed among various separate databases. It is distributed as well as stored within a single location into the system (Hejazi, Halpin and Biggs 2014). The stored data are kept secured with providing up-to-date information to the customers.

Conclusion

From the entire report on the implementing of accounting information system into business operations of B Bakery, it is concluded that with a use of AIS, the firm increases their business efficiency and operations. The selected software package for Bakery business is SAP. It solves the transactional issues of the firm by managing the order as well as cash process, which is related to transactions. This package is for medium range business enterprises. It helps the firm to mitigate financial issues so that in the future the firm should expand their products and business processes. It provides with faster as well as accurate information to the clients with the better quality of products. It improves interaction with the business partners in order to build informed decisions.

References

Abbott, J.D. and Webb, M.R., SmartVault Corporation, 2013. Browser toolbar extension for document management with web-based application programs. U.S. Patent Application 14/093,433.

Ahmad, M.M. and Cuenca, R.P., 2013. Critical success factors for ERP implementation in SMEs. Robotics and Computer-Integrated Manufacturing,29(3), pp.104-111.

Ajit, D., Donker, H. and Patnaik, S., 2014. ERP system implementation announcements: does the market cheer or jeer the adopters and vendors?.International Journal of Accounting & Information Management, 22(4), pp.339-356.

Amran, A.M., Rahman, R.A., Yusof, S.N.S. and Mohamed, I.S., 2014. The current practice of Islamic microfinance institutions’ accounting information system via the implementation of mobile banking. Procedia-Social and Behavioral Sciences, 145, pp.81-87.

Bradford, M., 2014. Modern ERP: Select, Implement, and Use Today’s Advanced Business Systems. Lulu. com.

Chen, H.J., Yan Huang, S., Chiu, A.A. and Pai, F.C., 2012. The ERP system impact on the role of accountants. Industrial Management & Data Systems,112(1), pp.83-101.

Christauskas, C. and Miseviciene, R., 2012. Cloud–computing based accounting for small to medium sized business. Engineering Economics,23(1), pp.14-21.

Curtis, V., 2015. MYOB Software for Dummies-Australia. John Wiley & Sons.

Galy, E. and Sauceda, M.J., 2014. Post-implementation practices of ERP systems and their relationship to financial performance. Information & Management, 51(3), pp.310-319.

Gebhart, B., Glines, S.M. and Foss Jr, S.H., Norse Corporation, 2013.Systems and methods for integrating accounting software and payment processing systems. U.S. Patent Application 13/803,868.

Hall, J.A., 2012. Accounting information systems. Cengage Learning.

Hejazi, S.S., Halpin, A.L. and Biggs, W.D., 2014. Using SAP ERP technology to integrate the undergraduate business curriculum.Developments in Business Simulation and Experiential Learning, 30.

Islam, Z., Diebold, A., Faude, B., Lam, K. and Gsell, M., 2012. Perspectives of SAP implementation: Theory and practice.

Ismail, N.A. and King, M., 2014. Factors influencing the alignment of accounting information systems in small and medium sized Malaysian manufacturing firms. Journal of Information Systems and Small Business,1(1-2), pp.1-20.

Kanellou, A. and Spathis, C., 2013. Accounting benefits and satisfaction in an ERP environment. International Journal of Accounting Information Systems, 14(3), pp.209-234.

Liu, Y., 2015. The Design and Implementation of the Project Accounting System.

Ma, X., 2015. The adoption of cloud computing for small and medium accounting firms.

Moghadam, H.M., Akhavansaffar, M., Bakhshaei, Z. and MirHosseini, S.Y., 2013. Effect of investment in information technology system on providing desired services of accounting information system. Elixir International Journal A, 55, pp.13268-13273.

Ng, F., A. Harrison, J. and Akroyd, C., 2013. A revenue management perspective of management accounting practice in small businesses.Meditari Accountancy Research, 21(2), pp.92-116.

Olson, D.L., Chae, B.K. and Sheu, C., 2013. Relative impact of different ERP forms on manufacturing organisations: an exploratory analysis of a global manufacturing survey. International Journal of Production Research,51(5), pp.1520-1534.

Prasad, A. and Green, P., 2015. Organizational competencies and dynamic accounting information system capability: impact on AIS processes and firm performance. Journal of Information Systems, 29(3), pp.123-149.

Rajasa, A. and Faturachman, F., 2015. Predicting the Intention to Re-Use on Accounting Application Software (The Case of Accurate™ Application Software Users in Indonesia). The International Journal Of Business & Management, 3(8).

Saleh Shatat, A. and Mohamed Udin, Z., 2012. The relationship between ERP system and supply chain management performance in Malaysian manufacturing companies. Journal of Enterprise Information Management,25(6), pp.576-604.

Seethamraju, R., 2015. Adoption of software as a service (SaaS) enterprise resource planning (ERP) systems in small and medium sized enterprises (SMEs). Information Systems Frontiers, 17(3), pp.475-492.

Smith, H., 2015. Xero for dummies. John Wiley & Sons.

Soudani, S.N., 2012. The usefulness of an accounting information system for effective organizational performance. International Journal of Economics and Finance, 4(5), p.136.

Svobodova, L. and Cerna, M., 2016. Accounting, Economic and ERP Systems on the Czech Scene. Advanced Science Letters, 22(5-6), pp.1170-1174.

Woodward, L. and Tan, L.M., 2015, June. Small Business Owners’ Attitudes Toward GST Compliance: A Preliminary Study. In Australian Tax Forum (Vol. 3).