Case Study For Accounting Information System For Functions Bakery Systems

Business procedure

Discuss about the Case Study for Accounting Information System for Functions bakery Systems.

This report will discuss the diverse functions of the bakery system. After highlighting the role of the bakers in general, the report will discuss the business process of the organization for better understanding the nuisance of the bakery manufacturing process. In the first section, the roles and responsibilities of a baker will be defined. Later the report will explore the role of possible software functionalities for making the bakery manufacturing process more seamless and less time consuming. Lastly, this report will contrast different features and advantages among two different accounting software packages.

Job description of a Baker

Generally, a baker is the professional who are well aware about the process by which different types of breads, tasty pastries and other baked items are prepared. According to Baker and Friel (2014), it is an art where it is important to mix up the entire ingredients at the appropriate proportions for making the different bakery items. Therefore, a baker is responsible for the entire manufacturing process as well as the quality of the baked goods. At the end of the manufacturing process, the items are packed out and the final packaged baked items are sold out in different stores including wholesalers, grocers, restaurants, and other food centers. Furthermore, a baker is also responsible for quality check in terms of ingredients used for the process of baking, usage of food color considering the health factor along with the maintaining the hygiene during the preparation. Mixing well and shaping the dough into sheets or molds and pans are another important role played by that individual.

In the competitive world, the changing food preferences of consumers are making the role of bakers more challenging (Baker 2013). To give variations, a baker is also engaged for adding several types of interesting toppings, icings and glazes into the baked items. This purpose of this step is to make end product more visually attractive and provide the highest customer satisfaction.

During this manufacturing process, there are two types of bakers associated in the process, such as commercial bakers and retail bakers. The retail bakers are those who work in grocery stores or associated with the charitable bakery stores. Most of these bakers produce smaller quantities of the baked items as compare to the commercial bakers who are associated in this business as well. All these baked goods are sold out in the spatiality shops. In most of the cases, the retail bakeries are started their baking operation after receiving the orders from their consumers. The primary focus is to maintain the just-in-time approach because they are into the limited resources in terms of the financial and operational.

Business process of the organization

On the other hand, the role of the commercial bakeries is different in the contrast of the retail bakers in this business. To employ in the manufacturing facilities for the production of bread and pastries are the main job criteria of the commercial bakers (Hills, Goldberger and Jones 2013). In this context, a baker is responsible for using high-volume mixing equipments to make the standardized baked goods. The most challenging part of their profession is to operate covering a wide production area in a single handled manner by utilizing automated machines, mixers, conveyors and ovens as well.

The business process of B Bakery to reach to their ultimate consumers performs a series of responsibilities. During the initial phase of the bakery, the organization is involved in the sourcing of the raw material from their suppliers (Leinert, Brand and Duma 2016). The received raw materials are then placed in the mixer for making the smooth dough. For the special product specifications, the manufacturer, then, placed it for the division to give a proper shape as per the requirement. In this step, the baked product has given the intended shapes with the help of “prover” and placed it into the oven in the due course.  In the successive step, the baker materials are de-panned and placed it into the cooler (Simms et al. 2016). In the last step, the final baked items are sending it for packaging. During the packaging, the company checks the weight of the finished products before releasing those into the market. 

Processes which are indispensable to perform

It has been found that as per the case study, the firm B Bakery is a family owned organization that has employed around 70 staffs and has generated the sales revenue of about $ 13.5 million in the last year. As per the case study, the business was running for more than 50 years and its role is to supply the confectionary and bread products to several businesses like pub-chains and supermarkets. The firm is a medium scale business, thus it should maintain a healthy accounting system in order to ensure the performance stability of the business actions. Opined to the case, it has been found that the firm has appointed an accountant to maintain the books and he has identified the requirement for implementing accounting software. The procedures that are obligatory in nature are maintenance of the top-quality components, ensuring consumer satisfaction, pre-fermented dough and an accurate accounting system (Dobija 2015). Thus, the firm required to take decision regarding the selection of the accounting system between the manual and e-accounting.     

Developing business requirement

During the conceptualization of the bakery manufacturing process, it is important to maintain the accuracy while making the entries in a particular accounting system. During the posting journal entries, the company should follow the ledger balance for making the statement of income and the statement of the financial performance. In this context, the significant accounts needs to be prepared such as inventory, machinery, account receivables and  many others for the successful accounting records. By maintaining all these balances, the company can control income and expenses as well as the credit activities of the business. In other words, all the above mentioned activities are supported by the control accounts which are considered as subsidiary legers of the accounting system.

The understanding of the different types of the outcomes is needed to meet the present the requirement with a clear understanding of the current accounting procedure. In the present situation, it can be seen that the accounting system of the company is being maintained in form of manual system. Then growth of the company at present is needed to create a robust system for accounting. The manual accounting system needs to be transformed into a computerized accounting procedure for achieving the present objective of the account system. This process will ensure the overall monitoring in the basis of real time reporting of data of day-to-day transactions. The automated accounting entries will not only make the ledger posting of the data more reliable but also increase the overall operational, efficiency of the company. The accounting software will further ensure that the features such as the graphical, representation of then data in form of graphical representation. This may face then an intitial set up cost at first but due to the achievement of the operational efficiency in the accounting system the company will be able to utilize the data for future evaluation. This will reduce the time significantly, which was requiring in case of the manual entry of the data.

The bakery needs to consider the accounting software, which will assist the order management. The accounting software need to offer feature such as invoicing, scheduling and pricing of bakery products. Then different varieties of the items, which need to be included for the costing method, are inclusion of the items such as cupcakes, pastries, bagels and other form of bakery items. For the purpose of being more efficient in  terms of the reporting standards, B Bakery need to ensure the use of accounting  software which included the cloud storage support for real time updating of the data (Li-guang 2013).

Outcomes required to achieve the business objectives

The bakery process needs to go through several processes for the use of the accounting software implementation especially in the traceability of the items.  The accounting software should, be able, to track the raw materials and necessary ingredients from the suppliers. The software should be able to include the process in case the manufacturer charges back (Rehkamp and Canning 2015). The availability of this feature will ensure opportunity for discounts, administrative fees, promotions and advertising. The different types of accounting software need to ensure that the recipes of the food items should contain the appropriate formula and ensure the availability of food items accordingly. 

Accoridng to Reis (2016), the ERP system should ensure the inclusion of “Multitenant Database Container Systems”. As per this system, the inclusion of multiple isolated databases needs to ensure the splitting of the tasks in an more efficient manner. The accounting software need to further ensure the availability of the different type of the product for the enhancement in the backup of the data for the purpose for the better adaptability to the changes, which is required to be made in the existing system of input of data.

The improvement should, be holistic in nature, which will ensure that the latency time is considerably low, and the changes in accounting system included the process of the “dynamic segregation” of the entered for ensuring better flexibility offered by the Bakery (Stoean 2015).

Then implementation process will be further able to address the key problems related to the maintenance of the software system. This is related to the regular renewal and extension of the subscription of the software licenses.  The overall accounting system should be able to integrate in such a manner that it is able, to ensure the real time updating of the data across the pub chains and the supermarket (Phan 2016).

For achieving the IT objectives, the bakery should consider the using of the automated sourcing of the vendor and the integration of the ERP system. This will ensure the Bakery to offer the best value for the money in the bakery industry.  The Bakery should, be able to involve itself in linking of data with the different types of the departments such as marketing, material and the procurement  of the raw material for the manufacturing process. The process of the integration is observed to have an overall impact on the finance module of the ERP system. The primary objective of the is to ensure that the relevant entries are able, to auto update and the impact is made in the plant level. The accounting integration process should be done across all the different types of the other department in the core financial areas. Some of the inclusion this department includes, procurement department and the material management department. The overall object to ensue the data is transmitted across all the division and linked together for the tracking of n changes in the data can be done easily.  The other form of the advantage is directly related to the sourcing of the vendor, which is available, in the ERP system. This function will ensure best vendors are chosen a supplying at a lower price for the raw materials (Ratanya 2013).

Determination of the systems requirements

The accounting system need to ensure that the implementation process is applicable across all the manufacturing hubs of the B bakery. This integration will ensure the efficient use of available workforce in especially in the accounting division. The lower amount of the cost of the accounting will ensure the bakery is able to focus on the other type of the competitive areas in the bakery business and further ensure that the bakery is able to set a competitive pricing g for the different types of the bakery items (Makori, E.K., 2014).

The selection of the accounting software would be mostly be based on its price and utility. Three different websites relating to accounting software’s for decision-making. For the purpose of the study, the following three different accounting softwares have been analyzed which are – Xero, MYOB as well as SAP. According to Moghadam et al. (2013), SAP has a diverse range of functions and is the most costly accounting software that is presently available in the market. Besides this, Xero has restricted use and is only suitable for smaller organizations.

As the company operates with only 70 employees, the company should select accounting software that would possess the necessary capabilities to assist the business entity in preparing the year ended financial statement that would contain relevant financial data. Romney and Steinbart (2015) mentioned that the accounting software that is selected should contain the necessary facilities like the port for mobile applications, developing customer purchase orders as well as preparing invoices. Thus, the chosen accounting software shall have to facilitate customer relationship management. As such, the accounting software that is selected should have the facility to integrate customer relationship management with the ERP system. According to Soudani (2012), the CRM feature would ensure that the financial data presented is relevant and helps the management of the entity to make informed financial as well as marketing decisions. Besides this, it would assist a business enterprise to record significant consumer data that would be useful for the business entity to make important marketing strategies. Hall (2012) stated that the preservation of consumer data is one of the essential features of CRM. Therefore, pertinent consumer information shall be safely stored in the company database, without being disclosed to any third party for any unethical use. Therefore, the accounting software chosen would assist the entity in gaining the trust of the consumers apart from recording the details of each financial transaction.

The following diagram reflects the implementation of ERP processes in the business organizations.

Figure 2: ERP System Dynamics

(Source: Hall 2012)

Comparison of the features of Xero and SAP

The two accounting software SAP and Xero have been compared and contrasted in order to gather information regarding their various functionalities and also to select the best one for the particular firm B Bakery. This comparison has been done based on the criteria that are relevant to the specified case study. The rationale regarding the selection of the accounting software Xero and SAP have been discussed here with the aim to compare the middle-range or low range software of accounting i.e. Xero with the high-end software of accounting (Smith 2015). The various functionalities involve the support from the newest android device, iPads, iPhones and the price that is paid for the least package. The criteria also involve the support for the HR management. It has been found that the customer relationship management is also considered as one of the important criteria for the selection of the accounting software. Therefore, this particular parameter has not been considered for this. It has been found that as the particular organization is a bakery firm, it does not require the manufacturing unit storehouse management. However, this particular measure has been chosen for additional capacity of storage within the firm.

On the basis of the accessibility of the e-commerce incorporation and cloud employment of different accounting information and entries, the selection has been done with the aim to share the objective of real-time data sourcing. The selection process also includes the industry-specific structure regarding the resource of the business that generally ensures the flexibility of the change in the main stress of the firm as per the requirement. The ultimate criteria for selecting the software depends on the data processing that involves invoice generation, processing of order, purchase order creation and tracking of the delivery of the finished goods. Nevertheless, the comparison has been done based on the least monthly charges of the accounting packages.

The accounting software SAP and Xero have been compared as follows:   

Parameters for comparison	Xero accounting software	SAP
Price of minimum package per month	$9	$448.28
Human assets	No	Yes
Mobile support	Yes	Yes
Customer relationship management (CRM)	Yes	Yes
Processing	Yes	Yes
Business intelligence	No	Yes
E-commerce	No	Yes
Management of Warehouse	No	Yes
Cloud employment	Yes	Yes
Procurement	Yes	Yes
Industry-specific	Yes	Yes
Finance	Yes	Yes

From the above comparison table, it can be said that Xero has a minimum amount of monthly package that charges only $ 9 each user (King 2015). On the contrary, SAP charges an amount of $ 448.28 for preliminary integration of the particular software (Ossimitz, Wieder and Chapman 2016). Thus, the firm B Bakery should make decision regarding investment in the software wisely. Moreover, it has been found that the software Xero accounting offers all the features that are required by the firm B Bakery. It has immense support for customer relationship management and the newest android devices that ensures the management of the firm regarding the cost of advertisement and spontaneous improvement in the profitability ratio by an amplified focus on the consumer service. Xero is much efficient in incorporating the various kinds of purchase order entries and real-time application of share value and it supports the cloud deployment that provides entire security to the facility of cloud storage (Khaneja 2015). On the other hand, it has been found that Xero software is not appropriate for the facilities of warehouse management that is generally needed for additional storage of the partially consumable items of bakery. It has been found that a little quantity of the warehouse management might ensure a more economical path for data accounting. Additionally, SAP also characterizes the human resource management and also maintains the e-commerce that might provide a rim for the opponents (Burdett and Tripathi 2013).

The company B bakery chooses Xero accounting software to select the best vendor management for the business. The company selected this software because the business unit is very small having only 70 employees in the bakery unit. Xero accounting software is beneficial for the small-scale business because it possess all the basic requirements, which is helpful in selection of vendor management. Moreover, the system is cost effective having many features of accounting, which is helpful for B bakery (Xero Accounting Software. 2016). The following are the key features of Xero software:

It is helpful in the process of invoicing.

It supports all the cellular gadgets such as windows phone, android phones, and so on.

It is helpful in managing the inventory system.

It controls and detects the problem of improved stock control.

It tracks down the stock and timely updates the list so that the management can reorder in times of crisis.

It supports all the mode of payment such as Mobikwik, Paypal, and so on.

It supports all the applications such as accelo and capsule CRM, insightly for Xero, and so on.

It can easily read the fluctuating rate of currency and can update itself according to that rate.

It is helpful in creating the list of option for purchase and for payment (Xero 2016).

The company selects this system because the system assures that it will handle all the problems related to accounting, moreover, it reduces the cost of human resources. The bakery firm can now improve its profitability because of the cheaper implementation of this software. In this competitive world, the company can maintain its position in the market by tracking the records of the stock. Moreover, the system ensures that the company will be able to handle all the latest version of accounting system because it can support various features like cloud support, online inventory record, and so on, so that the company can prepare its ledger account very efficiently. The handling of this system also supports the company for selecting an easy mode of payment for the suppliers of the company. After analyzing all the basic features of the software it can be said that, the system is very much suitable for the bakery business because it possess all the necessary requirements, which is beneficial for the company. It helps the company in selecting the functional areas of the business due to which the company can operate in more relevant manner. Now the company can make necessary changes to the various departments related to production and manufacturing of stock. For instance, if a company wrongly recorded any entry, such as, if a company made any mistake in recording its purchase order then in this case it will create an impact on the journal entry of the company. In this case, the company might purchase an extra unit of stock for the company.

Conclusion

Therefore, it can be concluded from the entire analysis that a baker has various responsibilities and duties towards his business process and actions. The systematic procedure of the particular sector is most pertinent to the current standards of the business. from the detailed analysis, the present challenges that are faced by the bakery firm have been identified and this mainly the system of manual accounting. As per the analysis, it can be suggested that Xero software should be implemented within the firm as its features get matched with the needs of the bakery firm. Thus, its rationale has been provided that clearly compares the characteristics of the accounting software MYOB and SAP. From the detailed study, it can be said that the particular B Bakery is a small or medium-sized firm that should invest in mid-range software of accounting in order to overcome all the current issues and to become more competitive in the present market. 

Reference List

Ansorena, D., Echarte, A., Ollé, R. and Astiasarán, I., 2013. 2012: No trans fatty acids in Spanish bakery products. Food chemistry, 138(1), pp.422-429.

Baker, C. ed., 2013. Handbook of food factory design. Springer.

Baker, P. and Friel, S., 2014. Processed foods and the nutrition transition: evidence from Asia. Obesity Reviews, 15(7), pp.564-577.

Burdett, D. and Tripathi, R., 2013. CIO Guide. How to Use Hadoop with Your SAP® Software Landscape.

Cauvain, S., 2015. Proving, baking and cooling. In Technology of Breadmaking (pp. 147-181). Springer International Publishing.

Dobija, M., 2015. Accounting and the GDP measurement system.

Doménech-Asensi, G., Merola, N., López-Fernández, A., Ros-Berruezo, G. and Frontela-Saseta, C., 2016. Influence of the reformulation of ingredients in bakery products on healthy characteristics and acceptability of consumers. International journal of food sciences and nutrition, 67(1), pp.74-82.

Efe, B., 2016. An integrated fuzzy multi criteria group decision making approach for ERP system selection. Applied Soft Computing, 38, pp.106-117.

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

Hills, K.M., Goldberger, J.R. and Jones, S.S., 2013. Commercial bakers and the relocalization of wheat in western Washington State. Agriculture and human values, 30(3), pp.365-378.

Huang, T. and Yasuda, K., 2014. ERP Life Cycle Models: An Annotated Bibliographic Review. In Proceedings of the 15th Asia Pacific Industrial Engineering and Management Systems Conference (APIEMS2014), Jeju, Korea (pp. 12-15).

Iacob, C. and Å¢aicu, M., 2012. Managerial Accounting And Environmental Performance Of Bakery Companies. Scientific Bulletin–Economic Sciences, 11(1), pp.16-24.

Khaneja, S., 2015. E-Accounting in the Current Scenario: Impact of Information Technology. The International Journal of Business & Management, 3(9), p.290.

Kilic, H.S., Zaim, S. and Delen, D., 2014. Development of a hybrid methodology for ERP system selection: The case of Turkish Airlines. Decision Support Systems, 66, pp.82-92.

King, A., 2015. Xero soothes auditors on automation.

Leinert, L., Brand, F.S. and Duma, F., 2016. Food Sector Study: Figures, Structure, Forces of Change, and Development Potential of the Swiss Food Industry.

Li-guang, X.U., 2013. Design and Implementation of ERP Software for Bakery Industry. Modern Computer, 19, p.020.

Maggi, V., 2014. Selected internal controls in a Maltese bakery production company: a case study.

Makori, E.K., 2014. Enterprise resource planning applications and supply chain performance of large scale manufacturing firms in Nairobi, Kenya (Doctoral dissertation, University of Nairobi).

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.13268-13273.4

Mogol, B.A. and Gökmen, V., 2014. Mitigation of acrylamide and hydroxymethylfurfural in biscuits using a combined partial conventional baking and vacuum post-baking process: preliminary study at the lab scale. Innovative Food Science & Emerging Technologies, 26, pp.265-270.

Myob.com. (2016). Accounting Software & Business Solutions | MYOB. [online] Available at: https://www.myob.com/au [Accessed 6 Sep. 2016].

Ossimitz, M., Wieder, B. and Chapman, P., 2016, May. Management Accounting Functionality in SAP Solutions–Implications for Research and Practise. In International Conference on Enterprise Systems, Accounting and Logistics (ICESAL) 2016.

Phan, P., 2016. Strategic purchasing practices: the case study of PAUL Bakery UK.

Räling, R., Holzgrefe-Lang, J., Schröder, A. and Wartenburger, I., 2015. On the influence of typicality and age of acquisition on semantic processing: Diverging evidence from behavioural and ERP responses. Neuropsychologia, 75, pp.186-200.

Ratanya, E.K., 2013. E-procurement implementation and supply chain integration among large scale manufacturing firms in Nairobi, Kenya. University of Nairobi unpublished MBA project.

Rehkamp, S. and Canning, P., 2015. Accounting for Direct and Embedded Imports in the US Food and Beverage Dollar. Amber Waves, (06).

Reis, J.L., 2016. Technologies and information systems: a contribution to the sustainability of the agri-food sector. In New Advances in Information Systems and Technologies (pp. 275-286). Springer International Publishing.

Retail Bakers of America. (2016). Retail Bakers of America – Education, Networking, Continuing Education. [online] Available at: https://www.retailbakersofamerica.org/ [Accessed 6 Sep. 2016].

Romney, M.B. and Steinbart, P.J., 2015. Accounting Information System Thirteen Edition.

SAP. (2016). A-Z Featured Customer Stories | SAP. [online] Available at: https://go.sap.com/about/customer-testimonials/featured-customer-stories.html [Accessed 6 Sep. 2016].

Sevenstarsbakery.com. (2016). Baking Process | Seven Stars Bakery. [online] Available at: https://sevenstarsbakery.com/baking-process/ [Accessed 6 Sep. 2016].

Simms, C., Trott, P., Ford, N. and Hullova, D., 2016, June. How line stretch contributes to product development within process industries. In ISPIM Innovation Symposium (p. 1). The International Society for Professional Innovation Management (ISPIM).

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.

Spatayeva, S., Ismailova, D. and Nurgalieva, A., 2015, September. THEORETICAL AND METHODICAL BASES OF CONSTRUCTING THE ACCOUNTING SYSTEM AND COST ANALYSIS FOR THE PRODUCTION COST OF THE FOOD INDUSTRY OF KAZAKHSTAN. In CBU International Conference Proceedings (Vol. 3, pp. 165-180).

Stoean, L., 2015. SUCCESS AND FAILURE FACTORS IN ENTERPRISE RESOURCE PLANNING SYSTEMS IMPLEMENTATION. Calitatea, 16(S1), p.641.

Å¢aicu, M., 2012. CONSIDERATIONS ON THE ORGANIZATION OF THE MANAGEMENT ACCOUNTING SYSTEM IN BAKERY COMPANIES. Annals of the University of Craiova, Economic Sciences Series, 2.

Work.chron.com. (2016). [online] Available at: https://work.chron.com/responsibilities-main-duties-baker-19089.html [Accessed 6 Sep. 2016].

Wu, Y., Lu, H., Tan, Y., Yang, Q. and Cheng, X., 2016. Research on Experiential Marketing Strategy Based on the Sale of Baking Products.

Xero Accounting Software. (2016). Online Accounting Software – Free Trial, Free Support | Xero. [online] Available at: https://www.xero.com/ [Accessed 6 Sep. 2016].

Xero. (2016). Accounting Software App Marketplace | Xero. [online] Available at: https://www.xero.com/marketplace/s/app-functions [Accessed 6 Sep. 2016].

Zubchyk, S., 2014. Estimating Efficiency of Baking Business In-House Control System. Accounting and Finance, (2), pp.131-137.