This article needs a bakery firm to help it selection process of accounting software to meet its requirement of accounting management for its increasing volume of business. The article will also emphasize on the business process of the firm, with identification and development of business requirements of the firm, identification and determination of the system requirement of the business, selection of accounting software with probable vendor and then sort listing the single vendor from whom the software may be bought to justify the investment in accounting software(Elmblad, 2016). In this article, as per requirement, these points will be delivered point by point and thus the justification of the management decision of capturing accounting software will be justified to meet and match the requirement of the bakery firm. It is also to be considered that the need of the accounting software is not for the present period only; instead it should provide service in sustainable manner so that the business can take the usage of this accounting software for a longer time(Kennedy & Trailers, 2016). To finalize the accounting software, the cost factor is also to be taken into consideration and the assessment of the software for upgrading the same in future period is to be considered with sincere importance. Purchasing accounting software needs to be done with long term planning as per the projected increase of volume sales of the company, because the volume of sales is directly related with the production plan which attract amount of higher quantity of overhead with amount and heads of accounting. The accounting software thus selected will be responsible to take care of the entire range of financial information to be stored and presented as per the requirement of the accounting standard as fixed by the Corporation Act 2001 of Australia(Austlii, 2001).
The business process of B Bakery is to produce the bakery items for the people of the community and sell them to the target audience through retailers of the local market. This business process includes certain steps of activities. The business process starts with the activity of production planning which is started with procurement of raw materials, arrangement of labor and energy. After all these items are arranged as per production plan, the production starts, which needs to be monitored through the supervisor. Next part of business process is packaging of finished products which are to be taken care with utmost sincerity. The finished products are of limited shelf life and proper packaging would ensure longer period of shelf life for the bakery products. The ultimate part is to supply the products to the customers through the distribution channel and collection of dues(Hui et al., 2006).
For the business process of bakery firm, raw materials are needed in the form of wheat, yeast and water for their bread products. For confectionery items the raw materials are needs in the form of sugar as the base material, with emulsified, different type of fruit components in raw forms and other essences as required for those products. These raw materials are procured from the market through the supply chain associates. They are to be informed about the requirement of the quantities of those materials in advance to ensure uninterrupted production process. For this production planning for upcoming period is to be fixed as per the sales forecast of the firm. Next important process of the business is to ensure proper maintenance of finished goods as these are all food items and had a very limited shelf life. Warehouse management is part of logistic management which is very vital for products with shorter shelf life. The business process of bakery firm also attracts high level of logistic management in the form of supplying the products to the retailers to reach end users. A brisk, composite and comprehensive logistic management is to be ensured for the perfect execution of this activity. Sales and distribution is the main part of this business process. Sales can be done through distributor channel and the distributors ensure supply the products to the retailers or the target customers of institution sales. As the institutional customers are purchasing the products in bulk, proper arrangements are to be made through effective logistic management in order to ensure that finished products should reach them in time. The market of bakery is highly competitive and there will be no scope of keeping vacuum there as other competitors are keen to fill up the market vacuum instantly when they are aware of this vacuum(Muvsi, 2017).
This entire business process needs to be monitored with facts and figures of historical period to understand where the firm stands at present. The sales revenue is reported to be increased in recent past which means that the firm is producing more to cater their customers. With the increased business volume and a hired accountant for the firm, the owner has thought of procuring accounting software which can take the responsibility of providing MIS of past period through which the firm can be well equipped with future planning and execution. The role if IT in this aspect plays a very vital role and this facility has the ability to provide real data which can enable the management of the firm to ensure that there will be no gap in the market for their products(Coleman, 2014).
The business needs to follow the basic requirements of bakery. There are some needs of this business which are indispensable. They are – quality management of the products, ensuring of steady supply of finished goods in the market as per the needs of the market, steady supply chain associates to ensure proper supply of raw materials, attractive packaging of the products, and ensure lesser or nil damage of the finished goods. If these business processes can be ensured through proper planning, the firm can find its sales revenue higher and find profit which they expect from the business(Gammack et al., 2016).
When the owner of the firm can find that the procurement is made without blocking unnecessary working capital, sales revenue is growing at a steady pace, recovery of debtors are going to be highly satisfactory and other associates in the form of supply chain or logistic associates are happy with the business transaction of the bakery firm, the firm will find the business runs in a smooth way. Hence these business processes are proved to be indispensable for the business of bakery firm.
The expected outcome of the above business processes are to be categorized as follows:
Supply chain management- Supply chain management is a very important process in this business. As a quality supplier of the finished bakery products in the market, the firm has to ensure quality of the raw materials on top priority. Compromise in quality can be fatal for the existence of the bakery firm because the finished products are of eatable in nature. As the company has a steady business of over fifty years, the target audience has the taste of their product, and slight deflection from the set standard can be instrumental for reduction of customers. The firm has obviously loyal customer base who usually asks for the product of the firm while they shop. In case of quality compromise, they will not find the product of their taste, and obviously get diverted to other brands at fast pace. It is a buyer’s market and the seller has to maintain its goodwill though quality assurance in order to hold the customers to their end(Robinson et al., 2007).
Logistic management- As the firm has good numbers of institutional customers in the form of shopping malls, super markets and pub chains; assurance of proper delivery of products in time is to be ensured. If the customers ask for the product of B Bakery and could not get it instantly, they will divert to other brands. It is to be kept in mind this buying is impulsive in nature, and the buyer can choose anything and everything to meet their demand as there are different products of same quality are available in the market(Vermaelen, 2014).
Packaging of products- present market situation of impulsive buying always is dictated by the products of attractive look. Packaging needs to be upgraded with the latest technological assistance to attract the customers. The target audiences of the confectioneries are mainly kids and in their case the more they are attracted, the faster they will grab the product. Hence packaging is to be ensured as per the trend of the market and with some innovative ideas to catch the eyes of target audience(Shelke, 2015).
Ensuring lesser damage of the finished products- As a manufacturer of bakery items, the firm owner should understand the implication of finished products. Finished products are blocking the working capital. If the finished goods are damaged due to non-marketing of those, the working capital is drained out. This is not a healthy situation for bakery items. As the confectioneries and the breads of very restricted shelf life, they are to be placed in the retail counters as soon as possible, preferably on the next day of production. The more the products are viewed in the shelf, the more the chance of the products to be sold. And as the finished products are not of recyclable in nature, the products cannot be sued again.
As a new procurer of IT solution for the bakery firm, the owner should identify the areas of preference which can be highlighted to the vendor to serve the purpose of the owner. There are two major domains on which the IT system can help the owner. They are –a) Management Information System, and b) statutory accounting. Please find Appendix 1 for the diagram with detailed heading.
Following features are to be entertained by the software for ready reckoned and well fed back up to the owner in different aspects in order to help him planning in different level of business process:
Basic objective of IT investment is to ensure proper and accurate level of maintenance of data and financial information which can enable the management to conclude in different level of operations with the aim to provide sustainable information system to make the employees satisfied with their deliverance with proper guidance and to keep the owner in comfort zone related to the business concerned.
For selecting accounting software, it is the prime area of concentration for the owner of B Bakery to foresee what level of business the company will be going to achieve in the next five years. At the same time it is also to be decided if the accounting software should be with online or offline application. The latest trend is of adopting cloud computing and if the company goes for this, the accessibility of the software will be available for one and all of the form. The company has staff strength of 70 and it is not necessary that all the staffs have to access software with same volume and regularity. There is different accounting software available in the market with online working facilities which can be adopted by the company to meet their purpose of software acquisition. There are different companies who are offering their cloud based software for accounting and MIS on monthly rental. The monthly rent is depending upon the volume of work and the facilities asked for from the software. For the business volume of the company, it is not suggested that the company should go for customized software which is made for them only. They have to find out the readily available accounting software on rent. For this purpose the firm has to enquire about features of different software and the cost involvement in the matter. The Australian accounting software market is very competitive and the companies are also coming up with more facilities within the specified price in order to make big loyal customer base(Sgabend, 2017). The company should look for such online accounting package with hierarchical locking facility which will provide the facilities of:
All these above services are provided in medium level accounting software of the companies. Hence to ensure best results, proper comparison of accounting software packages is to be done in order to ensure worth of the additional expenses to be incurred. The companies offer such facilities are MYOB, Intuit and XERO with their different level of regular and premium range of service with different level of monthly subscription. Out of them the sort listing of two companies are made from MYOB and XERO through research made from their websites and this will lead to effective vendor selection of accounting packages for B Bakery Firm.
To select vendor for online accounting software, the firm has to ensure which one will be best between MYOB and XERO to meet the requirements of the business process. For this purpose comparative analysis is to be done between these two software packages to conclude which will be the best for the firm.
As per the requirement of the business process, MYOB has solution of accounting software named as MYOB Accountright Plus. This accounting software package will provide solution in the following fields of business operation of the firm:
The price for this software package is $ 92 per month as the software is provided on rental basis(Myob, 2016).
The contemporary solution from XERO provides solution for the business process of B Bakery Firm with name Premium 20 with the features given below:
Price of rental per month for this solution is offered at $ 90 per month(Xero, 2016).
With the above description of features prevailing in MYOB AccountingRight Plus and XERO Premium 20, it is evident that both the accounting software packages have their inherent features of managing different aspects of accounting of a manufacturing firm. It is also evident from the features that MYOB AccountingRight Plus has slight edge of the two by the salient features of managing purchase orders, offline working with local backup in PC, acceptance of payment through Paydirect option. The rental of both the packages is neck to neck and it is also found that XERO is not providing any feature which not found in case of MYOB package.
In my opinion, B Bakery Firm should go for MYOB AccountingRight Plus. The basic requirements of the firm so far accounting and MIS is concerned are duly met with the present status. As there is provision of upgrading the system with the higher level of accounting package, the same can be done in future as per requirement with proper restoration of financial information of the past, as well. As this business never attracts any Point of sales operation, hence the direct payment through PayPal or other payment gateway is not needed by the firm. MYOB provides free trial for their package and this will be the added advantage to assess the applicability of that accounting package in the case of the firm. The areas of purchase, sales, recovery and statutory compliance in the form of GST and employee Income tax deduction are the main issues which are to be made sincerely. These fields are well attended by the said accounting package of MYOB AccountingRight Plus. Moreover there will be added information available through the historical data restored in the system which can be helpful to find out different Management Information System reports for the management of the company to ensure fixation of their strategies as per the objective of the firm for both short and long term period. As these online accounting packages are user friendly, it will be easier for the users to handle it with comfort and the multi level locking facility as per hierarchical needs will ensure secrecy of the information for better control management to avoid inherent audit risks related material misstatement.
Conclusion:
It is often problematic to switch over from manual accounting to computerized accounting. But for the interest of the business, this option is to be adopted to ensure accuracy and prudence for the stakeholders of the firm. It is often found that the accountants exercise their own power to hide the information and present as per their own oconvenience for pampering individual interest. The occurrence of inherent audit risks arises from this practice. This can be avoided with better control management in accounting management to handle the financial information in proper way so that the financial statements, thus generated from the system can ensure its authenticity in all manners. The only drawback of adopting online accounting packages are the threat of cyber hacking which is to be deliberately avoided through practice of control with different level of locking system as per the hierarchical status of the company people. Thus the responsibility can be bestowed upon them and the same can ensure accountability of the people concerned in the business process. As B Bakery Firm is trending towards more business with the forecast and the market trend, they have to fasten their belt tightly so that no loose ends are left to consider for undoing at any level. The level of accuracy and presentation made by MYOB is complying with the requirement of the Australian Accounting Standard Board and as per the Corporation Act 2001 of Australia. Although the firm is of ownership status, sooner or later they can be converted to Pty Ltd of Public Limited legal status. In that case the requirement of statutory compliance is required as per company to ensure prudence to the stakeholders of external nature in the form of shareholders, lenders or creditors. This can be ensured though proper following of accounting packages with maintenance of the same for public and owners’ interest.
References:
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Coleman, A., 2014. Bake off: How to run a successful bakery business. [Online] Available at: https://www.theguardian.com/small-business-network/2014/sep/10/bake-off-how-to-run-bakery-business [Accessed 22 May 2017].
Elmblad, S., 2016. Tips for Choosing Small Business Accounting Software. [Online] Available at: https://www.thebalance.com/small-business-accounting-software-1294208 [Accessed 22 May 2017].
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https://searchcio.techtarget.com/definition/business-process [accessed 10 May 2017].
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https://www.business.vic.gov.au/money-profit-and-accounting/financial-management-set-up/How-to-choose-small-business-accounting-software [Accessed 10 may 2017].
Muvsi, 2017. Bakery Business | Profitable Small Scale Manufacturing. [Online] Available at: https://muvsi.in/bakery-business-small-scale-manufacturing/ [Accessed 10 May 2017].
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