Chapter 6 Accounting and Enterprise Software Introduction Integrated Accounting Software Programs Accounting Software for different sized businesses Specialized Accounting Information Systems Enterprise-Wide Accounting Software Solutions Functionality and Architecture Business Processes and the Risks and Benefits of Enterprise Resource Systems Selecting Accounting And Enterprise Software The when and how of selection

Introduction Accounting software Specialized accounting software earlier primarily processed bookkeeping transactions earlier today processes transactions for multiple corporate divisions customizes financial reports provides sophisticated ratio analyses and performs forecasting functions. has evolved into a part of integrated enterprise software Specialized accounting software accommodates specific industry information needs

Integrated Accounting Software Programs process all types of accounting transactions include transactions affecting accounts in the general and special journals organize transaction processing in modules and provide links among the modules general ledger module includes the chart of accounts other modules usually include accounts receivable, accounts payable, inventory and payroll journal entries recorded in modules update the ledger module

Integrated Accounting Software Programs - Features Can handle multiple companies and users Has audit trails Has budgeting capability Provides cash-based and accrual-based accounting options Can print checks and invoices Can customize financial reporting

Integrated Accounting Software Programs - Features Has E-commerce features Has tools for financial analysis Can generate graphic reports Can manage the inventory Can handle recurring journal entries Accommodates business growth Can provide variance analysis.

Small Business Accounting Software Small business owners are usually most concerned with cash flows and figuring out if they have been profitable. Small Business Accounting Software available in the market include Microsoft Small Business Accounting Quickbooks by Intuit Peachtree products

Small Business Accounting Software Microsoft Small Business Accounting gives, at a quick glance cash flow trends, vendor bills due, overdue customers, and bank account activity.

Small Business Accounting Software Quickbooks by Intuit includes a low-end package and an enterprise-wide software package a chart of accounts and process general ledger, accounts receivable, and accounts payable transactions. Peachtree products include a variety of features offered in packages Internet connectivity, to create web sites and engage in electronic commerce. a special link to take orders and receive payments over the Internet.

Small Business Accounting Software Question Low-end accounting software is increasingly complex and sophisticated. However, software costing only a few hundred dollars is not likely to a. provide information to multiple stores where a company operates more than one. b. include a chart of accounts that users may customize to suit their industry. c. provide all the information needed to optimize customer and supplier relationships. d. provide information for budgeting decisions.

Mid-Range Accounting Software A mid-range software package is useful when transaction processing needs grow in volume and increase in complexity. Some examples of accounting software packages of this type are Microsoft’s Dynamics GP

Mid-Range Accounting Software Sage software’s include: MAS 90 MAS200 Everest Accpac

Mid-Range Accounting Software These software packages offer many features. They can convert transactions from one currency to another write checks in foreign currencies split commissions among multiple salespersons handle more than just accounting functions be deployed from an array of options including desktop computers, a web browser, or a hosted solution

Mid-Range Accounting Software Question Mid-level accounting software a. can only be deployed through a server networked with desktop computers. b. may be purchased in modules that match various business processes. c. will not be appropriate for a multinational company because these programs cannot handle foreign currencies. d. is generally inappropriate for a company operating in a specialized industry, such as retail or not-for-profit.

Specialized Accounting Information Systems Accounting software began with programs written to automate common, repetitive transactions has become increasingly sophisticated and customized for specific industries offer add-on modules that can process special information. are useful to manufacturers and construction companies, and point-of-sale features for retailers sell source code with their programs to customize the software to fit specialized information needs

Enterprise-Wide Accounting Software Solutions Enterprise resource planning (ERP) systems are integrated programs with a central data base do much more than process financial data expand with the price and complexity of software have the ability to interface with customers and suppliers (supply chain management). ERP systems include SAP PeopleSoft Oracle Microsoft Dynamics GP Enterprise

Enterprise Resource System Functionality Enterprise System Functionality: ERP systems originated from manufacturing systems MRP I Systems: Marketing sales projections, Production schedules MRP II Systems: MRP I plus forecasting planning for all manufacturing resources including labor and overheads ERP Systems combined MRP II systems with accounting and finance functions

ERP Functions Traditional functions are concerned with back-office functions which primarily deal with internal systems, such as Order processing and fulfillment Manufacturing Purchasing Human resources

ERP Functions Intregrated functions Traditional capabilities plus E-business Customer management Supplier management Business partner management Strategic business relationship management

ERP Functions Question Which of the following is not a distinguishing characteristic of an enterprise-wide (ERP) system? a. a central database b. integration c. best practices for business processes included in the software d. hosted solution

Integration within ERP systems

Extended Enterprise Information System

The Architecture of Enterprise Systems ERP Configurations are client-server based can typically run on many operating system platforms Centralized database stores information about each data item just once makes it immediately available to all the various functions

The Architecture of Enterprise Systems Application interfaces a best-of-breed approach extended application interfaces Internet portals Are gateways to other web sites enhance communication and productivity among employees, customers, partners, and suppliers

The Architecture of Enterprise Systems Question Which of the following is correct regarding ERP systems? a. Early ERP systems focused on back-office functions. b. ERP systems evolved largely from a manufacturing environment. c. ERP systems do not include CRM or SCM functionality. d. Both a and b are true.

ERP Systems and Business Process Reengineering An ERP typically integrates financial functions, human resource functions, manufacturing functions, and sales and distribution functions.

ERP Systems and Business Process Reengineering Buying an ERP system is akin to a new way of doing business entails reengineering an organization, encourages the separate units to conform to standard practices

Implementing an Enterprise System Implementing an ERP involves: systems planning, forming the project team, selection of the software and the consultant, pre-implementation work, follow-up after going live, training of personnel, and change in management methods, if warranted

Costs and Benefits of Enterprise Systems Hardware Software Training Technical Business processes Data conversion Interfaces and customization Professional services Reassigned employees Software maintenance Software upgrades Reduction in inventory investment Improvement in asset management Improved decision-making Resolution of data redundancy and integrity problems Increase in flexibility and responsiveness Improved customer service and satisfaction Global and supply chain integration

Selecting Accounting And Enterprise Software Organizations have many choices when selecting AIS software: Entry-Level Simply Accounting Peachtree QuickBooks Microsoft Small Business Accounting High-End Enterprise Resource Planning (ERP) SAP PeopleSoft J.D. Edwards Oracle Small–Medium Business (SMB) Sage ACCPAC Advantage Series Sage MAS 90 MAS 200 Macola ES Cougar Mountain NetSuite Microsoft Dynamics GP

Selecting Accounting And Enterprise Software Organizations have many choices when selecting AIS software: Special Industry Peachtree Nonprofit Cougar Mountain Fund (NFP) AccuBuild (construction) Everest POS (retail) Phoenix (insurance) Small–Medium Enterprise (SME) Sage MAS 500 e by Epicor Lawson Microsoft Dynamics AX mySAP All-in-One Custom-Built

New Accounting Information System The time to purchase new software is when there is a delay in payment of vendor invoices, a delay in deliveries to customers, growth in inventories, accompanied by an increase in stockouts, a slowdown in inventory turnover, increased time in collecting on receivables,

New Accounting Information System a delay in periodic reports, an increase in the length of time to close books, concern about cash flows and the financial picture, a lack of information needed for decision making, and worry over taxes and profitability.

Buying Accounting Software The approach to buying accounting software varies with the complexity of the business and features of the software. At the low end, for small businesses, the approach is much quicker and less expensive.

Buying Accounting Software mid-range or high-end accounting software packages are usually purchased from a value-added reseller (VAR) VARs provide buyers with services such as installation, customization, and training a VAR offers a broader array of services than a qualified installer

Buying Accounting Software Large organizations with specialized needs may require a custom AIS which is easier to develop with advances in technology, is, however, likely to be costly, but will prove to be a good choice in the long run. may manage with a packaged software for 80% of their needs.

Buying Accounting Software Question Accounting and enterprise software can be expensive. Which is likely to be the highest cost associated with a new AIS? a. The cost of new hardware. b. The cost of the software. c. The cost of implementing and maintaining the new system. d. The cost of converting old data for the new system.

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Chapter 6