Describe about the Accounting Information System for Information Security.
Accounting information system is the need of the hour and plays a vital role in shaping the destiny of any business. The burden on the manual system is reduced and a major chunk of the work is done through softwares. Having an Accounting information system, as well as ERP aids the business in collecting, storing and retrieving data. Through the help of B. Bakery a medium scale business, the report will shed light on the accounting information, softwares and the manner in which the internal control mechanism is done. The report will be discussed on the matter like the business requirement of the softwares, what are the result needed to attain the business objectives, the system needs and the features of the software that meet the specific criteria of the business. There are various vendors for software and the same will be referred for selecting the softwares.
Main activity of the Baker
B Bakery is a family owned firm which supplies bread and other confectionery products to various businesses like supermarkets and pub chains. They have been in business for 50 years now, and seem to have developed a huge market for their products. In order to conduct their business efficiently they need to have a proper production unit along with a proper supply and distribution chain management. They also require someone to look after the accounts and finance of the business. The bakery would require raw material like flour, sugar, milk, etc which would be supplied by the supply department, the production unit shall take care of the production of products, and the distribution unit shall now come into action and make sure the goods are distributed to all the customers. Also, the accounts department shall take care of payables and receivables; it shall also manage the payroll and help the bakery to manage its cost of production. The financial part is taken care by them. Therefore, departments are allocated different responsibilities and this leads to division of work.
The performance of task is divided that leads to better accountability and for a bakery firm where the preparation of stuffs needs to be done in haste, is a great prospect. Failure of a single function department shall have a domino effect on all others. As the departments are inter-linked there is a strong chance of getting a failure because a setback in one of the department might create a rippling impact and mar the performance of the company (Evan, 2014). Hence, they are all inter-dependent on each other. Therefore, for running a bakery with this scale of operation, B Bakery will have to make sure that it’s each department functions properly. The business can attain a strong result when the departments work together. However, the presence of such a structure can lead to better transparency and joint effort. This can take the business to a great height.
Processes that is indispensable to be performed
All processes of a business unit are equally important. Production is the major function of the bakery, besides that accounts and finance department is indispensible. The accounts department is like a blood flow of a business. It helps to drive the business in the correct path and strengthens the business. All other departments are directly or indirectly related to accounts. In the given case we see that B Bakery has appointed an accountant who takes care of book keeping activities of the bakery along with production of financial statements of the company. But in order to run the business of the firm more efficiently, the bakery requires much more information just than the final accounts. The bakery needs more comprehensive information like production cost per unit, etc, in order to make decisions if to accept certain order or not. For which they require to have accounting software that provides not only basic accounting information but also detailed information on cost. This enables to have a strong outlook on the entire business and decision can be taken with ease and flexibility.
The accounting process is the source of information for the other processes. In order to get more information from accounting process, there needs to be a system which collects data from other processes and then arranges it in such form as required by the user of information. This integration of data is possible is the company has a suitable ERP and AIS for the firm.
(O’Brien & Marakas, 2009)
As mentioned above it is clear that account is an indispensible process of an organisation. It is through the accounting part that the business is able to perform with ease and flexibility. Moreover, to keep up with the current market condition, an organisation needs more integrated and comprehensive data. It means the data must be filtered and valid that establishes a strong notion. The accounting process shall collect data from all other processes and convert it into more useful information, it shall collect, process, store, manage and retrieve data as per requirement. The accounting process of an organisation needs to have a suitable ERP and AIS, in order to run data and get information and also help the organisation to create forecast with the help of historical information (Evan, 2014). Therefore, few outcomes that are required from the accounting process are enhancement of accounts, integration of all business processes and accounting system for improved decision making, Investment in some available accounting software and customizing it according to the particular business environment, implementing ERP and AIS for their business, etc. The ERP shall provide the organisation with integrated data and will also provide a platform for Accounting Information System. Hence, it brings immense benefit to the entire business though classification and presentation of data. The accounting process is required to provide the business with such data which will help them to make strategic decisions and take their business on the next level of success (O’Brien & Marakas, 2009). Moreover, it aids in the decision making process.
(O’Brien & Marakas, 2009)
Software features
The firm will need to implement Enterprise Resource Programming (ERP) and Accounting Information System (AIS) for their business. Implementations of both the packages are necessary for an entity to achieve its objectives. ERP is the type of business management software which is mostly suited for integrated applications for an organisation which wants to collect, store, manage and interpret data from various business activities. AIS are a computer based method which helps in tracking accounting activity with the help of information technology resources. These resources are mainly obtained from ERP. Therefore, AIS will have access to all business information which will help in better and accurate processing of data (Siraj et. al, 2011). This is a major landmark and has immense benefits to the organization, therefore it is highly needed. There are mainly three fundamental functions provided by AIS to business processes. These are, firstly, it helps in effective and efficient data processing, secondly, it provides the data to the management and helps in decision making and lastly, it would provide us with a reliable internal control system ensuring the quality of data. Maintaining the quality of data is another important perspective that helps in maintains the authenticity (Evan, 2014). Also, there are sub systems in the AIS which provide the organisation with more specific data. It helps to determine the production cycle, expense cycle, etc, based on which helps the organisation in various decision making functions and formulation of policies. Hence, it is of immense help to the business and helps in taking vital decisions.
(Evan, 2014).
Selection
The Vendors are Microsoft Dynamics (GP, NAV, and SP), SAP by Design, SAGE 100 ERP, etc.
As per the given information we see that B Bakery is a family owned business firm with around 70 employees and sales revenue of more than $13.5 million as per last year. Hence, B Bakery can be classified as a medium company. And would require a accounting software which suits such class of companies. On the basis of industry research it has been found that, there are three classes of Accounting Information System software, which are based on the scale & size of the companies. There is entry level ERP’s which are suitable for small businesses with one to five users. Basically, the utility is restricted to few people and cannot be used on a bigger domain. Next comes the medium scale business solutions which are suitable for medium scale companies. These are best suitable for five to hundred users. This is usually helpful to an average number of people in the organization. Finally there are high end enterprises accounting software which are for companies having more than hundred users or large scale industries (Siraj et. al, 2011). We see that B Bakery belongs to a medium scale industry, hence the medium scale business solutions is best suited for B Bakery. Under this business solution the firm would be able to extract high degree of transactional information for reporting purpose. Reporting is the main activity and hence will be taken care of this Few examples of medium scale business solutions are Microsoft Dynamics, Quickbook enterprise, etc (Evan, 2014).
(Evan, 2014)
a. Contrast of accounting softwares
Amongst the medium scale business solutions few of the prominent vendors are Microsoft Dynamics (GP, NAV, and SP), SAP by Design, SAGE 100 ERP, etc. Following is the comparison between SAGE 100 ERP and Microsoft Dynamics.
There are different variations of AIS software for small and medium enterprises in SAGE 100 ERP. Few of these variations include SAGE 10, Advances ERP, SAGE 100 Standard ERP, etc. SAGE 100 can support almost up to 50 active users for various accounting and financial activities (Evan, 2014). It also provides assistance in business intelligence, human resources, manufacturing and distribution services, web services, etc. It can also be customised according to needs of the users and their requirement. Therefore, the software helps in providing a strong backup to the business and plays an important role in the decision making process. The software is highly flexible and can be used according to ones need. In short, it is user oriented and helps in playing a major role in the decision making process. It also has a capacity to record unlimited historical data, helps in automatic creation of various reports from underlying data in the system, creation of forecast, etc. SAGE 100 requires Microsoft Windows environment along with Microsoft SQL based database. This is one of the noteworthy features that has provided popularity to the software. The implementation of the solution can be based on client server or online platform (Garfield & Edelglass, 2010). Also the set up, demo and use of the software can be made with the help of wizard based support. The various modules of the software can easily be integrated. Its simple features are easy to understand and can be used easily thereby making it user-friendly and hence ensuring that the software provides the best result. There are various features which help to understand the data of the company and make decisions. It also has facilities for easy creation of presentations and reports based on which company can formulate its policies (Weistroffer, 2010). Creation of report helps in making a better visual presentation and is an important tool when it comes to the business. Therefore, it provides a wide range of options to the users and aids in smooth decision making. One of the modules of this system is the business intelligence module, which helps in better decision making. But sometimes this system can be expensive and would require to be up graded. However, the benefits are manifold and the expensive nature cannot offset it (Figueira et. al, 2005).
Similarly, like SAGE 100 Microsoft dynamic also has variation like Microsoft Dynamics NAV, GP, SL, etc. Amongst the above variations Microsoft Dynamics GP is the general accounting software which offers functions such as finance, resource controlling, decision making, etc. it is applicable in various fields and hence, better in terms of control mechanism. The interface of Microsoft Dynamic is similar to that of Microsoft Office (Olsen, 2012). It also has a special feature that supports tax and regulatory data, online trading, etc. One of the variations of Microsoft Dynamic is Microsoft Dynamic SL which is mostly suitable for small and medium scale industries. Therefore, small and medium business that does not operate on a huge scale can use this software to create a better response and result. One of the specialities of this software is that it provides with project oriented accounting, so it is suitable for construction industries, etc (Fowler, 2010). The other variation of Microsoft Dynamic provides control over other business processes. Control over business process ensures that the work is in order and leads to better output.
B Bakery is in search of software on which it can rely on. They require such software which works on an integrated platform and connects all the other business processes is efficient in analysis of business operational and transactional data which helps in decision making process. Therefore, we recommend the firm to use SAGE 100 ERP accounting software. There are various advantages of using the software. The reasons for recommending this software are mentioned below.
This accounting system shall help B Bakery to keep all the processes of the firm integrated and connected through a single platform. All the vendors, customers and in house users can easily connect through the same system using BYOD devices with the help of web interface. Management of raw material data, output, supply, etc, all can be done through this single integrated data platform. It will help the business to convert raw data in to useful information. Presence of special dashboards will help the business to provide easy access to the business intelligence functions (Figueira et. al, 2005). This information will help the firm to analyse the potential customers, material, product, etc. This data will help B Bakery to formulate strategies for business. Seamless storage of historic data, inventory management, safety stock control, etc are other benefits of this accounting system.
The data will help to analyse the details of demands in market, understanding potential customers, etc which will help the firm to develop strong relationships with its customers. This means improved customer base, which will result in increased revenues for the firm. One of the modules of SAGE 100 will help the firm to improve its product quality, raw material maintenance, have a check on wastages, provide integrated data, etc. This software shall help the firm to improve the quality of business culture along with improved business processes. The other module of this system shall regulate the billing and payment system of the firm. It will result in improved invoicing, quick payments, ageing analysis, etc. This will reduce the load of manual invoicing saving resources and time for the firm, which can be used for other processes (Fowler, 2010). It will help to increase the growth and performance of the business. The customisation feature of the software will help the firm to add services according to its needs.
(Fowler, 2010)
Conclusion
From the above discussion and the report it can be concluded that the role of accounting information system is vital for the smooth functioning of the business. The presence of accounting information system ensures that internal control is strong and any deviances or problem can be easily traced and rectified (Porter, 2008). When the accounting system is strong, it will lead to transparency and better result. There are various softwares in the market that has provided great deal of help to the business and enable in taking vital decisions. It is important that the business have strong internal control and this can be done through softwares that even reduce crime. However, the selection of the software must be don ein accordance to the features of the business otherwise there might be a gap. In short, it can be said that ERP and AIS has changed the complete scenario of the business and aided in strong development. SAGE 100 ERP accounting software is recommended for the bakery business. The system of accounting will help in integrating and linking through a unique platform. This will be beneficial to all the stakeholders who are linked. Therefore, it can be concluded that such an accounting system will leads to a strong progress. .Overall, we see that an integrated platform for data, will not only improve the accounting of the firm, but it shall also improve other aspects of the firm, providing overall benefit.
References
Evan, F 2014, The 5 W’s of Information Security, viewed 27 May 2016, <https://www.frsecure.com/the-5-ws-of-information-security/>.
Figueira, J, Greco, S and Ehrgott, M 2005, Multiple Criteria Decision Analysis: State of the Art.
Fowler, M 2010, Patterns of Enterprise Application Architecture, Addison Wesley.
Garfield, L. & Edelglass, W 2011, The Oxford Handbook of World Philosophy, Oxford University Press.
O’Brien, J and Marakas, G 2009, Management Information Systems, McGraw-Hill.
Olsen, E 2012, Strategic Planning Kit for Dummies, John Wiley & Sons.
Porter, M 2008, Competitive Strategy: Techniques for analyzing industries and competitors, Free Press
Siraj, S., Mikhailov, L. and Keane, J. A 2011, Priests: an interactive decision support tool to estimate priorities from pairwise comparison judgments, International Transactions in Operational Research, vol. 12, no.4, pp. 45-61
Weistroffer, H.R, Smith, C.H and Narula, SC 2010, Multiple criteria decision support software, Springer: Oxford University Press.
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