Accounting Software - Supplies and Pay Outs - Assignment Example

Accounting Software - Supplies and Pay Outs Task 1. Feasibility Report: Economic aspect - The proposed change over and expansion processes are laudable. On the one hand, the prospect of increase in boarder strength will translate to greater revenue, albeit with capital expenditure. But as far as economics of scale are concerned using the same existing infrastructure as the bulwark of the expansion plan shows great optimization of resources. Therefore the plan to go for an overhaul is readily acceptable. Furthermore, to cater to increased workload apart from infrastructural staff to be employed or reshufled no great human resource addition is necessary. Only accounting staff need to be put on board. Organization – A slight reshufled on the cards is enough to effectively manage such on increase in the company. Firstly reception area should be revamped to be user friendly and be of the open type plan. The area may include one or two computer terminals and have competent personnel to handle admission and maintenance of residents. Infrastructural staff (cooks, valet, cleaning staff, supervisor) have to be added as per requirement, a fact which only Mrs. Marchant or her daughter shall be able to make a realistic estimate of. Management and accounting staff should be only two who are able and proactive. That is enough to cater to the daily accounting demands. Technology – The implementation of Sageline 50 is by far the best decision the management can take. This is far superior than ones in the market and is amply capable of handling demands of the proposed expansion plan. The switch from manual to computerization is no serious matter as it always happening and the software is user friendly to allow easy handling. No severe handling problem can be envisioned at this point. However in case of any untoward happening, the customer care departments are quick to respond and helpful. Operational aspect – Once the capital expenditure driven expansion is through, the unit is now ready and operational. Depending largely on the existing operational structure, both in vertical and horizontal span and lends, the new look company should only concentrate on slight minimal addition. The normal equilibrium need not be disturbed as this might cause a breakdown of the existing system. All that has happened is an increased in the size of the operation not the type or mode. The scale needs to be amplified but the methodology we remain constant. Perhaps a floor or wing supervisor may be engaged. However, all supplies and pay outs shall have to be streamlined and centralized, stocks maintained accurately and creditor/debtor handling regularized. A bit more professionalism infused into the scheme of things will help remove inherent lacunae. Working Personnel need to be appointed as per requirement of proposed changes. Technically speaking apart from construction involved and implementation of new accounting system, not much of technicality has to be imbibed in the project. The feasibility report requires the appointment of skilled personnel to fill up the strategic position that have been so created in the expansion project. The basic objective is to implement the new system commensurate with the changes made, using the current parameter as well as improving on them to incorporate the new changes suggested. Primarily it involved skilled accountants, well versed in operating the Sageline 50 accounting software, which by itself is a wonderful tool to provide customized solutions to small business problems. It also takes into account that the new system has to gradually blend into the old system and then eventually taper out the latter in due course. The need of the hour is to carefully hand pick selected accountants with strategic planning backgrounds capable of effecting the turn around from blow end automation to high end optimum usage of the new proposed system. The incumbent should possess the following criteria: - a) be prepared to blend into existing set up b) be competent to create the new set up as soon as possible in a phased out manner without ruffling feathers c) most important thing look at the project as one his own and be proactive he taking decisions It is foregone conclusion that they will be resistance to change. Most existing going concerns resists change of any kind and are particularly loathe to accept overhauling of a set system. The reasons are pretty obvious mainly revolving around the fear of redundancy and accountability. This project too is no exception. However the incumbent should be competent enough to dispel these inherent fears and turn disadvantages to his advantage. Perhaps a few SOPs will go a long way to allay fears of redundancy once the set up is in place. The beauty of using or imbibing Sageline 50 accounting software is that it can be customized to suit needs individually. Each and every accounting requirement or topic can be suitably and sufficiently moulded and made applicable to the user. The package so user friendly that once it is operational it can virtually work like a genie in creating coherent efficient system. One can call for customized reports, budgets, real life solution to small business problems and a host of other solution as and when required. The system is so designed that it can provide sub-sub entries on a main topic and even provide an automatic reporting on the extent of a particular transaction. For example, the system can give a comparative analysis of heat and light expenses in terms of days. Flexibility is the keyword here. Then the company will be in a position to compare the cost of increased heat and light expenses in terms of days. It can even segregate the entire building into separate wings and give a comparative report on the heat and light expenses in North and South wings. That will surely define heating systems in the different wings. Task 2. Greenlea’s existing systems has the following lacunae: 1. It does not provide for budgetary proposals as an when required on a projected basis periodically 2. It cannot produce reports on processes and inputs that are routine. 3. It is a rigid system rather than being flexible. 4. It doesn’t offers solution to small business problems. 5. VAT Returns and Refunds absent 6. Foreign currency handling absent 7. Cash flow estimation absent 8. Management information system online not there 9. Linkage of various inputs at a glance absent 10. Record of E-mail transaction not incorporated The suggested system Sageline 50 accounting and management software offers all these and much more. Flexibility to monitor strategic business areas through departmental analysis Departmental Budgets & Reports as well as for ledgers and projects, current and projected, created. Capable of designing and integrating any field or calculation for which a report is desired. VAT Returns with user friendly transaction details saving search time One single transaction showing payments made and Refunds received from Customer. Facilitating easy entry and reconciliation. A new Dashboard feature which reveals complete information of the company at a glance Projects costing giving better profitability Quotation and proformas displayed for easy conversion after approval. Stock control, processing of Sale orders and provision of Bill of materials, which credit control. Possibility of inter-transfer of data from this software to MS Office or MS Excel for easy working. Both bank and cash books are automatically recorded along with easy display. The cash flow planner makes it extremely easy to have an understanding of how much cash at bank in due course. A special feature – Automatic audit assistant verifies accounts through a 21 point checklist enabling presentation of accounts to external Auditors. Analysis of historical data or prior period accounts facilitating easy navigation through accounting tasks for particular time periods. E-mail transaction that makes sending and receiving orders via the E-mail. Extremely efficient stock management which reduces costs and exerts greater control on purchase. Cash management that enables location of debtors and follows up debt chasing through letters and capacity to put accounts on hold. Summary information of all accounting details that can be viewed in a user friendly environment. Security of entire system by means of passwords assigned and operated by designated personnel only. Therefore, it is amply evident that incorporating this accounting system will greatly assist complete automation at the same time exercising checks wherever required or necessary. It is undoubtedly user friendly making it easy to handle, operate and view by even the most computer illiterate person. Outputs At every stage wherever there are inputs there should be concurrent and corresponding outputs which automatically tallies with inputs. As a result instant verification, which is not possible in the manual system can be solved by the new system. The manual book keeping primarily concentrates on single task outputs. But the new system can have multitask outputs program to be generated instantly. For example, a vendor’s supply can be monitor to show impact on stocks and stock levels apart from the mere fact of supply as well as his debtor / creditor status. This is in no way possible from a manual system but is highly possible from the new automatic system. Again outputs as reminders are an indispensable requirement of accounting. Though manually difficult, cumbersome and time consuming it is automatically instantaneous. Added to that is the possibility of generating reports, managing cash/bank flows and projecting them a week ahead, far outweighs the manual system. Thus on a given date the management knows exactly where instants, an essential information in any company whatever its size may be. Task 3. The Sage Accounting System is equipped to generate budgetary proposals for the small business organisation, along with reports and sub-sub reports on particular processes. Let us look at a new streamlined accounting procedure which Sageline 50 will form the basis of. The Company with its proposed expansion take in more boarders – increase in income (may be doubled). Similarly expenses also go up by substantial amounts. The new system will factor in the percentage increase in expenses as per stipulation below and immediately produce a budgetary projection for e.g. if May 2007 income is put in, the months projection base on existing expenses and increased percentage quantum will be projected immediately at the touch of a button. Increase may be in the following percentage. Residents fee = doubled (100% increase) Heat and light is 25%+ Rent and rates = Same Telephone = +25% Motor Exp. = +25% Repairs & renewals = +10% (as new construction) Sundry expenses = +10% Postage, printing & stationery = +5% Purchases (food & drinks) = +25% All the above go to show that in view of 100% income increase, the expenses to not mount up to an astronomical range. The new system will offer and instant projection factoring in these percentages changes – thus offering a watertight control parameter. The budgetary reports generated daily will be quick to spot any significant deviation from preset parameters like 10% or 25% +- to emit warning signals where required. This will certainly put a check on movements either positive or negative, which are far from expected for projected in accounts. To effective use Sageline 50, the following systems requirements are necessary. Minimum hardware: Preferably IBM Computers with 400 MHz (or equivalent either Intel or Celeron) Processor. 256 MB S D RAM 500 MB of free disk space after Windows Operating Systems has been properly installed. A CD of Microsoft Internet Explorer, Version 6 or above. SVGA Video card and colour Monitor supporting Windows at 800×600 pixels, with a minimum of 16 bit high colour. 144 FD drive 48x CD ROM ATX cabinet for CPU Minimum of 2 USB ports capable of handling external hardware Modem capable of handling Broadband internet connection A colour Desk Jet Printer to print reports and accounting papers Recommended hardware: At least 4 terminals IBM compatible computer with minimum of 2 GHz (or equivalent either Intel or Celeron) At least 512 MB S D RAM for each terminal 500 MB of free disk space after Windows Operating Systems has been properly installed. SVGA Video card and colour Monitor supporting Windows at 1024×768 pixels, with a minimum of 24 bit true colour. 144 FD drive 48x CD ROM ATX cabinet for CPU Minimum of 2 USB ports in each terminal capable of handling external hardware Modem capable of handling Broadband internet connection A colour Desk Jet Printer to print reports and accounting papers A Flat bed Scanner with at least 1200 dpi master input Broadband connection Pen drives of at least 1 GB space to transfer data externally UPS 1 KVA for every terminal For Networking – Networking is necessary for each terminal to be accessible to the main frame server were all the data is to be stored. This system anyone at any terminal to have access to all data at any point of time. The whole system will be online and at par at all times. However, for security purposes only one particular user, in this case may be Mrs. Marchant, will have access to certain sensitive information has may be desired to be kept from all and sundry. Server capable of serving four terminals with the provision of adding more in due course. Hubs and nodes for every terminal Requisite amount of cabling Operating systems and Software: Microsoft Windows 2000 or Windows XP Microsoft Internet Explorer, Version 6 or higher Microsoft Office 2000 with MS Word, MS Excel sheet to facilitate accounting work Norton anti-virus software with firewall Input Points 1. Every vendor to be assigned a render code so that once the supply is made, they will be attributed to the particular vendor code. Every item to be supplied shall have a sub-vender code to enable identification of item given. Prior to supply all items proposed to be supplied shall be quoted for and the proposed price entered in the system. Once supply is made and the price compared and found to be accurate, the system will accept the entry. If not or otherwise, the system will be programmed to reject the same. Simultaneously the system will generate reports on variations if any, on total consumption on daily, weekly or monthly. This will be in force to keep an effective check on supplies made and consumed. Supply inputs to be linked with stocks so that any preset quantum if depleted will automatically spark off a replenishment request. So this new systems will maintain cost checks, supply inputs, stock mechanisms as well as comparative reports at one shot. 2. Similarly the points of entry for electric bills, payroll structure, wages, rent rates & taxes, rent & rates, telephone charges, motor expenses and other variable are periodically verified at the point of entry. 3. Subsequently the departmental report well generate how much of imputs are upto the mark, Where they have deviated What are the input points that have strayed Who the errant vendors are What is the deviation quantum Remedial measures if any to be adopted What time frame / time period you are planning to preset. A large part of the accounting deals with VAT Returns and the necessary quantum of refunds. This is an important aspect of the accountant’s job and a very cumbersome one. A list of extra calculations has to be done to arrive at Refund quantums. The new software does away with this complicated procedure and does the whole process online in a single transaction. So in one shot one gets to know the quantum of VAT and the amount of Refund to be realized. Security – A system of passwords, strong and difficult to duplicate or arrive at may be used to lock the system. The identity of the only user who has the knowledge of these passwords should be a secret. Ideally a split need to know basis access should be the right approach to unveil complete information. Ms. Marchant is the right candidate to have complete access and complete knowledge of entire system of passwords used. In case of system failure it is advisable to have daily CD backups of entire accounting procedure so that information is not lost but preserved. The accounting software has a built in system of recovering lost information which again acts as a double backup. Therefore, in no way will accounting information be destroyed on more than one day basis. This is quite and accepted practice and can easily implemented in this scenario. Task 4. Problems that may be encountered while processing in the initial testing stages are outlined below. They may be of subjective or objective in nature. Firstly, once the system is in place, there are two aspects - system error, manual entry error. The system error may be a manufacturing defect, an operational error or simply failure to attribute to the right accounts. On the other hand manual entry error will be an error in the typing or juxtaposition of figures. These are minor and will automatically be verified when subject to the 21 point cross verification internal audit system that is built in Sageline 50. For example, a supply made by X for Y amount may be wrongly entered in the books of Y for Z amount. Naturally the effects of this wrong entry will be a cascading effect and upset all related entries of purchase, cash or bank, stock as well as debtor/creditor status. Consequently, the system itself will generate the report to the effect that it is erroneous entry. Comparison with manual entry also in the initial stages will provide the right answer to a wrongful entry. Thus the accounting software is amply geared to rectify manual mistakes by itself and produce an accurate picture of daily accounting. To this the accountant may add a reminder prompt, which will flash on the screen as display or what is known as ‘dashboard’ to instantly point out any mistake of either omission or commission or juxtaposition if unwittingly made by the person entering the account. Task 5. The scheduled conversion should be spaced out and executed in two phases involving all the accounting staffs as well as the front office personnel. Ideally there should be two front office personnel who are at the first line of reception dealing only with residents and their personal queries. This limits the accounting procedure at the front office and allows the back office to function in peace and in totality. The front office is supported by two back office personnel who are entrusted with the job of handling vendor supplies, vendor payouts, statutory compliance, debtor-creditor interlinks, utility payouts and other routine daily accounting. The statutory monthly or annual compliance, depreciation, monitoring of capital expenditure and such like items can be handled automatically by the system and therefore does not require manual supervision. Cash and Bank transactions too are also automatically attributable to their respective accounting processes after any entry is recorded. For example: A supplier is placed an order only after his quotation is duly approved and he supplies at the rate specified and recorded in the system. Moreover before and after supply the stock is automatically checked and reported on thereby minimizing manual intervention, subject to preset limits for maintenance. Once supply is made and accepted, the system overrides any intervention contrary to what it has been programmed to do. Thus it is self explanatory that the system being in place, manual intervention becomes reduce to minimum. Phase I This phase simply puts the hardware, software and networking paraphernalia in place, setting up the whole system integrated and running. The staff involved in this operation are given adequate training hands on. Subsequently, existing vendors are attributed codes and sub-codes, quotation taken and recorded, general expenses and routine expenses, rent and other rates are fed into the system. Once all these existing rates are accepted and recorded, the system should be tried out to ensure proper running involving all staffs. Phase II This involves switch over from manual entry to automatic computer entries thereby effecting complete reliance on Sageline 50 Accounting Software. The time period should be ideally two months from start of the system duly backed up by manual entry as before. Care should be taken to minimize involvement of other personnel and assigning passwords to only those who need to be part of this system on a ‘Need to know’ basis. Mrs. Marchant should ideally be the only person to have access to all accounting figures and information and have an unique password to operate when she wants to. The others should be denied access and only allowed partial access as the case may be. Task 6. The beauty of this accounting software is that a produces auditory checks periodically. There is an inbuilt system of 21 internal auditory checks which allow accounts to be prepared prior to visit of external auditors. Meeting 1 with Auditor – First Month: Therefore, in the first meeting scheduled and held with the auditor after a first month displays both a trial accounting report from the mechanized system which has been duly compared with the manual existing system. After thorough examination it is found to be reasonably accurate and running and the system is okayed by the auditor. Meeting 2 with Auditor – Second Month: In this meeting the system is fully running and operational and a successful switch over from manual to complete automation has taken place. Apart from the existing and routine inputs and statutory compliance including utility bills for Electric, Alarm systems, Water works, Rent & rates, Vendors supplies and other variable inputs have all been identified and coded. However, the departmental analysis and management reports have identified a slight variation in couple of vendor transactions that have been duly rectified. The internal audit system of around 21 checks has been fully approved and lauded by the auditor. Therefore, the system is in place, running in full operational rhythm. The auditor is very happy with the choice of system and recommends complete trust in this system subject to the security checks exercised by Mrs. Marchant. Task 7. The accounting system involving management reports and security inbuilt has been a sure winner. Its inbuilt system of generating reports, producing budgets and conducting online comparison of routine transaction with budgets has been a great help to do away with manual fallacies that had crept in the existing manual system. Starting from acceptance of this particular system, its commission in tandem with manual accounting has gone a long way to weed out certain vagaries inherent in the existing system. For each entry, right from the time it is recorded, the transaction is split up into its requisite accounts and automatically compared and a report generated on it instantly. This is absolutely fool proof and reduces subsequent entries to be done thereby removing chances of errors of omission or commission or juxtaposition of figures. Moreover, the capacities to view daily accounts as well as identifying and correcting deviation from proposed and preset reference frames make it absolutely in valuable to ensure accuracy. On the other hand statutory compliance, routine accounting, depreciation are done automatically confor-ming to set and accepted rates so that final accounts are easily produced. VAT Returns and Refunds are once again automatic therefore the ease of calculation need not be underlined. In addition to the above, the possibility of generating accurate reliable on the spot solution to expected and anticipated problems make this system indispensable. Therefore, incorporation of Sageline 50 Accounting and Management Software implemented and made operational in Greenlea Residential Home should make Mrs. Marchant a very happy and contended person. Read More