ACCTING 2503 Accounting Information Systems For Scale Manufacture

Answer:

Introduction

In the present globalized and dynamic business world, ERP software plays an important role in supporting and managing the business activities. ERP helps in increasing the productivity and efficiency of every business operating in any industry. In this view, this report aims at discussing the importance of ERP software systems through a case study in which in B Bakery organization has to implement ERP system for taking the business to the next level. The report will illustrate the business organization, and determine the system requirements accordingly. This report also compares and contrasts the features and functionalities of two accounting software adopted by another vendor. Specifically, the report will also explain how the business results will be affected by the implementation of the ERP in the long run. 

Define Business processes

Inspecting the ingredients that are available for the recipes that they have to produce constitutes the functioning for whole day of baker. Ensuring the freshness of ingredients like cupcakes, breads and pies is also constitutes the main operation of a baker. Kneading, rolling and moulding the shape of dough and cutting them in the desired shape are also a function of baker.

Business process of a bakery

B Bakery is a bakery company that is engaged in the business of selling products to supermarkets. These businesses have customers in the form of customer base mixed with the prominent businesses. They engaged in the production of bakery products and then supply them to another groceries shops and businesses.

Various production units like supply chain management, sales and marketing department, accounts, HR management process and finance constitute the business of bakery. Taking care of purchasing of raw materials from different business units like suppliers of fruit, poultry farms and fruit shops is managed by the department of supply chain management. Then, bakery products are produced in the production department. Then, warehousing the products and then supplying them to different targeted locations is carried by the department of inventory and logistics management. Managing the activities relating to accounting, making payments to suppliers and from customers and managing the payrolls of the staff is done by the accounts department (Mendez, et al., 2014). Taking care of hiring and payrolls is attended by the HR management. Sales department is engaged in the business of taking orders and selling the products to the targeted market. Business is promoted by the department of marketing. Every department of the business has dependency on other department. Whole functioning of the business gets hampered by affecting any of the department. For example, if the firm is suffering from sales decline, then business will generate less revenue and HR management has to suffer. Therefore, for running a business unit of bakery effectively, it is very much essential to taking care of every unit of business with outmost care. The organisation is also requires to develop an effective level of cooperation between departments of the organisation. Little bit of similarity can be seen in the functioning of a bakery and operations of a baker. 

Develop Business Requirements

Indispensable processes to be performed

There are several sets of activities that are performed in the bakery business; mentioned activities in the above section are indispensable. The several activities performed such as supply chain management, productions, procurement and managing the human resources with maintaining accounts of the business. Doing business is not the important part but maintaining the records of the activities performed in monetary terms is also the vital need of the organisation to perform as a competitive player in the market. B Bakers has grown smoothly in past few years but has faced problems of competitive prices with some of the products so it is required to plan for the betterment of the products to compete in the market (Gartenstein, 2017). The important processes that are to be included in the business of the bakery and confectionary are to have production at most competitive prices so that it can compete with the competitors.

Company need to procure the raw material such as the floor, sweets, baking raw material, ovens and other basic product from cheaper and quality provider supplier so that they can have price advantage against the competitors, the next requirement is to pack the various products and then supply them to the various sellers and warehouse. There is also a need to know about the competitors manufacturing process so that some of the lacking areas can also be sorted with taking that information into consideration (Kotler, et al., 2016). Accounting process is also having unbeaten role in the performance of a firm it records the financial details from material, packaging, warehouse, transport to income from sales it also helps to show the results of the business in different periods as required by the management. The lacking of the accounting/accountant is that it lacks decision making and forecasting of the market demand and the quick decisions about various problems in front of the organisation.

Accounting also helps to know about the money to be paid to the staff, labour and the amount of taxation which helps to plan for the future needs of the manpower and to decide the investment plan for the surplus funds with the organisations.

Required outcomes from these processes to achieve business objectives

There is a need to have incorporating business processed with the use of new technology driven solution which help not only in accounting but have solutions of the problems of all the departments related to bakery business. This will also result to speed up the whole process so that the human resource team has to focus on their key areas of performance which will also improve their efficiency this will also result to improvement of competitiveness in the market. Accounting is the only process which is connected with all the departments of the business (Hecker, et al., 2013). The information collected from each department is than entered to calculate the cost incurred in various these process and then decision about the need to cut off in the needed expenses.

The basic objectives of the business is to achieve maximum profits by inputting minimum resources with efficiency and effectiveness but at the present time there is high level of competition in every sector. So there is a need for the solution which will help the business in planning with the available resources to find out the needed output. Revenue is the first priority of a business it can be achieved with the help of increases advertisements to grow as a brand in the field of bakery products. Margins are the keys to increase profits of the business so producing the exact amount with maximum margins is the priority (Simkin, et al., 2014). Products produced are having short life so these products are needed to be delivered with freshness. This will also result to build reputation over short period of time.

Integrating accounting software programs will solve the several needs to achieve the desired objectives (Rainer, et al., 2013). Enterprise resource planning, SAP, MYOB are several Information systems which are solution to the manual calculations and problems related to payroll and human resource management. Some of them are also having planning and decision making tools which helps to achieve the desired objectives and plans.

Determination of System Requirements for B Bakery 

It has been observed that any of the ERP applications support the needs of accounting, but when it comes to the areas of purchase, stock, production, and sales, they fail to fulfil the requirements of a bakery organization. This is because a lot many standard ERP applications are general, broad-based applications which maintain detached production rather than food manufacturing, such as bakeries. The basic architecture and practical capabilities of a process-oriented ERP application are greatly diverse than a basic, broad-based or discrete-oriented ERP application. At present, many sellers dealing with distinct ERP applications claim to be able to shore up food manufacturing needs (Phan, 2016). However, in many cases they proved to be wrong. In order to become successful, B Bakery requires using ERP tools which can efficiently evaluate whether any application can tackle the important areas which support the exclusive requirements for B bakery in the most efficient, as well as effective way. The baker owner should make the distinction to implement best practices for the organization and convert them into valuable solutions, without individual coding, and without making additional steps in the process that could slow the organization down on an everyday basis. The owner should look for a fast implementation without exceptional add-ons. Since all process-oriented ERP applications cannot be not equal for the organization, due diligence should be made when going under the covers of each ERP application (Stoean, 2015). Simply because a package supports food manufacturing doesn’t mean it will support the requirements for the organization.

The owner of B Bakery should examine these areas in terms of vital ERP functional capabilities, data model characteristics, and needed technologies, including the following:

• The stock, accountability, and management of frequently used raw materials such as flour, yeast, eggs, as well as spices, seeds and sugar along with a variety of finished products
• The ability to track and trace ingredients and possible allergens to support requirements of the USDA, FDA, GFSI, and customers in mock recalls and product recalls
• The ability to forecast yields, accurately cost products and scale manufacture
• The consequences of variable product features and inventory attributes, such as package weights, expiry dates, and numerous units of measure, on a range of ERP functions, particularly inventory management, production scheduling, order management, manufacturing, product management, and Quality Control management
• The impact of the ERP design and plan on the application’s operations and its requisite IT maintenance
• The need to integrate different technologies for improving visibility, teamwork and process interoperability

If B Bakery chooses to make use of a generic or discreet-oriented ERP application for producing one or more finished products, based on BOMs, the organization will face problem in following areas:

• Monitoring manifold products from one bread starter
• Monitoring toppings such as frosting or seeds that may consume more quantity
• Supervising recipes that include regrind from finished goods
• Cheeking inventory for net weight with double units of measure and inventory quantities, such as, cases, packages, or units
• Estimating ‘available to promise’ and ‘capable to promise’ data for products with respect to co-products and by-products
• Scaling manufacturing yields up or down based on components levels or product yield levels
• Monitor and highlight from supplier receipts to customer shipments
• Proper tracking and assessment of co-products and by-products
• Using proper product costing method and comparing of standard or estimated cost with the actual cost
• Tracking of actual output and comparing with the standard one
• Surplus stock transactions from not having streamlined the use of process descriptions to relate recipes
• Determination of actual quality test outcomes and comparison to description
• Speedy entry of data into the computer with the formatted screen and built in database so as to carry out inventory records and supplier details more efficiently than manually.
• Automatic documentation of credit notes, invoices, printing statements, and purchase orders.
• Accurate entry of data for every transaction
• Automatically updating of accounting records such as customer records, supplier records
• Instant availability of data when required at different locations at the same time 

Software Selections

The software of the company is effective in handling the problems of any kind relating to the accounting section of the firm. The firm is also capable of managing the system of pay roll in an efficient manner. It is very essential for any of the firm to have those programs that helps in accounting procedures and bookkeeping in order to calculate the salary and wages of the employees. If this has done by using the manual procedure, then it requires minimum period of two to three days. On the other hand, using the software of MYOB, it can be done in a very simple manner at very least cost and in minimum time (Mayasari, 2015). This aids the positive reputation and appeal to the business. Calculating of taxes and government dues are also performed by this firm. This will help in paying the appropriate amount of tax to the government. MYOB follows the system of double entry in balance sheet which helps in maintaining the accuracy and reliability on the financial statements.

Vendor Selection

(a) For B Bakery, SAGE 100 ERP, Microsoft Dynamics are the well-known vendors among the SMB accounting system solution providers (Mathuva, and Mathuva, 2014). Following is the discussion of these systems in addition with existing differentiations:.

SAGE 100 ERP

SAGE 100 ERP possesses several features of AIS software for SMBs. These include SAGE 100 Standard ERP, SAGE 100 Advanced ERP, and other software. It has the ability to support nearly fifty active users at the same time for assorted range of accounting and financial operations, business intelligence (BI), Human Resource, web services, and production and distribution, customer relationship management services. The solutions are extremely customizable according to different business processes. Moreover, the software is greatly stable, modularized, and flexible. It can assist in recording indefinite historical budgets, along with designing of a variety of financial reports from accessible templates such as creation of Bill of Materials (BOM).

It requires Microsoft SQL and Microsoft Windows environment based back-end database. It can be executed according to the client’s server or online platform. There exist wizard based support for setting up and using the software. There is a flawless incorporation among the different modules of the software (Turner, and Weickgenannt, 2016). It is simple to operate and understandable. There are strong features which help in enhancing the return on investment of the business. The software also offers easy to build reports and presentation also. The Business intelligence module will help in better decision making. Users can add user defined fields, business rules etc. for performing oriented tasks. However, customization process may become expensive and sometimes requires up gradation. The software also allows personalization of workflows based on different operators/users.

Microsoft Dynamics

Microsoft Dynamics also has variations of AIS software available for SMBs such as B Bakery. These variations include NAV, Microsoft Dynamics, SL, and GP. Among all these variations, Microsoft Dynamics GP is general accounting software that offers functionalities for controlling resources, HR, finance, and ultimate business decision making. This ERP based AIS software is simple to organize and adopt. The interface is similar to Microsoft Office. There are special support for tax and regulatory, online training. On the other hand, Microsoft Dynamics SL is another variation of Microsoft Dynamics which is again AIS software apt for medium sized businesses. Thus, it is perfectly suitable for B Bakery (Strotmann et al., 2017). The uniqueness of this software is that it suits all project focused accounting systems such as Government contracting, and Construction businesses. Microsoft Dynamics NAV is general AIS software designed for general purpose for any kind of medium-scaled business. It allows the user to have full control over the major business methods like HRM, supply chain management, business intelligence, financial management, and reporting.

Justification for the most suitable vendor and accounting software system for B Bakery

On the basis of above analysis of case study, B Bakery organization needs AIS ERP software to invest in so as to perform on a unified platform linking the entire business processes. The firm should consider the features of system’s ability to analyse greater information related to transactional and operational data for making effective decision (Nandi et al., 2016). In this context, B Bakery is recommended to adopt SAGE 100ERP accounting software for its business. This software can provide all the benefits which the company is looking for. These are stated as follows:

• An integrated platform will be available for several departments of the business through SAGE 100ERP. It will enable the customers as well as vendors to get connected with one system via web interfaces and phones. The management of CRM and sales activities will also become easy.
• This software will allow B Bakery to convert the business raw data into useful information, which will make the business process more efficient. Special Designed dashboards in the software will enable easy access to the BI functions which will help the owner of B Bakery to identify potential customers, demands in the market, and products in the market and gain competitive edge over rivalries.
• With SAGE 100 ERP, there is an additional benefit of integrated CRM module which operates as a sales tracker. It will assist in maintaining product quality, usability, integration and reporting system of B Bakery.
• This accounting software will let the owner to collaborate with social media platform and deliver more effective CRM experience to the customers. The CRM module in this software facilitates sharing of information among different users and creating productive workforce. The system will also allow having more collaboration with other users and personnel in the organization. As a result, the organizational culture will be improved and the performance as well as profitability level will go high.
• This software provides another advantage of billing and payment module which will help B Bakery in proper and correct invoicing along with quick payment (Gelinas et al., 2011) . As a result, the cost of invoicing as well as Days Sales Outstanding (DSO) and repetitive data entry will also get minimized. Due to saving of time and money, the focus could be made on other core operations of the business, which will boost the overall growth of B Bakery.
• Since mobile commerce has become a trend in today’s business environment, B Bakery also needs to move forward in this field for accelerating its productivity. In SAGE ERP 100 software, there are sound mobile sales modules which can help the owner in effective and quick order processing and payment collection. The information is allowed to be added anytime to the actual ERP.
• Moreover, SAGE 100 ERP software can provide generation of more income and advantages if B Bakery is able to properly exploit the powers of its functions and modules.
• The return on Investment will also get maximized and faster than before.
• Finding potential customers and getting advanced orders will facilitate the diversification and expansion of the current customer base (Dezdar, 2017).
• There will be more opportunities for B Bakery to compete in the market with sound foundation and management system as the business processes will become more organized, simplified, scalable, and efficient.

Conclusion

On the basis of above discussions, it can be concluded that every organization whether big or small cannot survive for long in the absence of a well-defined accounting information system. Since B Bakery wants to take its business to the advanced level, it needs to adopt SAGE 100 ERP system for simplifying the business process and integrate different functions. The different useful components of the AIS will work together to help the employees in collecting, storing, managing, processing, retrieving, and interpreting their financial data. Implementing a strong and effective accounting information system is a crucial component of a successful business. 

References

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