Accounting information system (AIS) is the structure that is used by the business for collecting managing, storing, reporting or retrieving the financial data, so that it can be utilised by the business analysts, consultants, accountants, auditors, chief financial officers, tax agencies, regulatory authorities. Various components of accounting information system are procedure and instructions, people, data, information technology infrastructure, internal controls and software (Belfo and Trigo 2013). People in the AIS are generally the users of the system. The professionals who are required to use the AIS are the consultants, accountants, business analysts, managers, auditors and chief financial officers. Instruction and procedures includes the methods that are used for storing, collecting, processing and retrieving the data. These methods can be automated as well as manual and the data come from both external as well as internal sources. Various data that are included in AIS is the financial information regarding the business. For instance, the billing statements of the customers, sales order, general ledger, vendor invoice and inventory data. Software of the AIS is the programs of computer that is used to retrieving, analysing, processing and storing the financial data of the company. Information technology infrastructure is the hardware used for operating AIS. This hardware includes surge protectors, storage media, routers, back-up for power supply, computers, printers and servers.
The internal controls with regard to AIS are the security strategies that it contains for protecting the sensitive data. These securities can be complex as the biometric identification or password protected. The AIS shall have control for protecting against the unauthorised access to computers and limiting the access to the unauthorised users and the users who are allowed to access a limited part only. Further, the AIS include confidential information that includes not only the information of the company but also the information of the customers and employees. The data further includes the salary information, numbers of credit cards and social security numbers. All the data under AIS shall be encrypted and access to system shall be logged in such way that the activities shall be traceable.
Baker – a baker is a person whose job is making cakes or bread for selling propose or who sells cakes and bread. On the other hand bakery is the place where floor based products is baked in the oven and the products include the pastries, cakes, pies and bread (Galliers and Leidner 2014).
The organization’s business procedures
From the given case study, it is found that B. Bakery performs various activities under their business. The activities are as follows –
It is identified from the case study that the company is making high profit from its sells. However, as the company is following the manual system for its accounting transactions, there is a high chance that the company will have to face the consequences of fraud, error or misstatement owing to manual accounting system. Therefore, the company is recommended to follow the following business procedures for carrying out the business more transparently and as per the conceptual framework –
If the above mentioned strategies are successfully adopted by B. Baker under their business processes, they will be able to achieve the following positive outcomes –
Therefore, through implementation of automated business process, the B. Bakery can achieve the above mentioned positive outcomes.
Possible features of software that can be considered by the company for achieving IT investment
Efficient software system is required to perform various financial tasks of the business. Further the system shall be efficient enough to analyse the performance of the company and proper documentation of various accounting data like invoice to the debtors, receipts from creditors and various other data related to the vendor. It must able to perform the following tasks –
Therefore, it is recognized that B. Baker needs the software for various purposes. The firm shall take into consideration all the required facts while implementing the software.
Determination of appropriate software
Various software are available that can be used for performing the accounts related task. B. Bakery can install any of them taking into consideration its business process and requirement. Various software that can be used by the company are –
The above mentioned software offer to perform various activities related to accounts. Before implementing any of them, they must consider their requirements and the business approaches.
Therefore, as per the business requirement B. Bakery can install the accounting software with medium end features to satisfy their business requirements.
B Bakery, as a commercial enterprise, can avail different types of accounting packages, which can be Xero, MYOB, DacEasy and others. As e result, it is of immense implication for the enterprise to choose an appropriate software package according to its requirements (Smith 2017). To compare between these software packages, several factors can be considered which are namely, the ability of the software to record big number of documents, expenses of operation, sustainability, risk, time scheduling, structures related to the payment of the employees, complexities, sundry debtors and creditors and others (Jadhav and Sonar 2009). The comparison among different types of the accounting software can be shown as follows:
(Figure 1: Comparing factors between types of the accounting software packages)
Ability to record big numbers of documentation:
The software package MYOB can record big numbers of data in the system. The software can generate output in a quick manner when the user puts in input command. The software can do this due to the presence of the button on every page, when the input is raised after being put by the user. The other software, DacEasy, takes use of an index in order to look for the relevant information displayed on the screen. However, the process being different, both of these software packages are able to record information in adequate numbers.
The software, Xero, MYOB and that of DacEasy differ in terms of their structures related to the payments of the employees. When it is about automatic reconciliation of the banks, the software Xero (All Features | Xero 2016) seems more useful. DacEasy is efficient in terms of salary depositions of the employees of the enterprise directly and it can also classify the tax liability amount that has to be paid. On the other hand, the other software package, MYOB seems to be highly useful when it comes to creation of the different alternatives in order to manage the tax as well as the salary status of the employees of the concerned enterprise.
The implementation cost and the operating cost of the different software packages can be categorized under high or medium costs. The software have single as well as multiple versions, with the former being obviously cheaper than that of the latter one. The decision of the enterprise, regarding the choice of the software package, therefore, depends on the cost structures of these packages too.
Time scheduling and complexities:
The DacEasy software package, though being quite simple in terms of operations, thereby being easy for the users, suffers a major limitation regarding its toolbar presentations. The software produces time-based reports when it comes to the billing procedures. On the other hand, the software XERO can successfully provide easy accounting transactions, online,, though the software may appear to be complex to some extent initially. The operating framework of the software MYOB, however, is quite simple and those who have a little knowledge about book keeping and accounting easily understand it. The software can be used for the purpose of billing on terms of credit. The firms, dealing with that of the transactions of credit terms can hav advantage in using this software package.
Depending on the user and his or her understanding of the software, these software are free of any kind of errors and can prove to be sustainable too. However, the concerned commercial organization, B Bakery in this case, should themselves be specialized and trained to use these software before starting to use them on daily basis (Merrett 2015).
When it comes to advanced and third part type of payrolls, the software XERO can be taken into account. The software, along with this, has the provision of free trial and training for the enterprises, especially the small commercial ones. DacEasy, on the other hand, can generate fifty reports and it is not that flexible as the others. MYOB, on the other hand, is extremely flexible software and it is capable to generate more than 175 number of reports, which are in general, relevant to track the data of different customers, suppliers and that of the vendors and also the transactions of the other parties (Mas et al 2014).
When it comes to the billing of the suppliers as well as the creditors, the software MYOB can facilitate e-receipts and also e-payments for the enterprise. The DacEasy, on the other hand, deals with cheque printing and can calculate the quotes related to purchase order. Xero, on the other hand, can also do the same thing along with the claims of the expenses in terms of the creditors (Mageto 2017).
It is of great importance for the concerned commercial enterprise, the B Bakery, to choose the most appropriate software accounting packages, which can facilitate the smooth running of their businesses. The enterprise, being an organization, which is family, owned, it is not beneficial or cost effective on their part, to implement and buy a software package which is immensely expensive. The package to be selected, should also be simple to use and implement and should run the documentation in a successful manner. The two software packages, XERO as well as MYOB can prove to be beneficial to serve the requirements of the concerned organization in this case. The package MYOB can prove to be effective for the organization for the capability of the software to generate reports on big numbers and in wide range, which will be useful for the organization for successful running of their operations. The software deals successfully with the credit transaction too (Red 2016). The enterprise, being involved in distribution activities as well, the software can be of huge use for the company. Other software like those of XERO or DacEasy do not have the above mentioned facilities. The software MYOB can calculate the cost of inventories by taking help of the FIFO and the LIFO methods. These functions, however, are not available with the software XERO. MYOB specializes in the payable accounts as well as the receivable transactions (Ma 2015).
The software can also help the company, with its big data documentation capacity, to stay ahead of its competitors. The flexibility of the software can be beneficial for the users and the software also has provision for the printing facilities. Therefore, among all the software packages, MYOB seems to be the most efficient one for the enterprise, B Bakery.
Conclusion
It is concluded from the above discussion that to sustain the business over long-run and maintain the business with all the documentation of records it must use appropriate software that will be able to manage the accounting records of the company as per requirement. It is recognized that the MYOB software is able to maintain the business record of B. Bakery efficiently. The software will enable the entity to use proper authorization for accounting records and preparing the data required for measuring the performance. Apart from this, it will also enable the company to grow their businesses successfully.
Reference
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