Components of AIS
Discuss about the Integrating Life Cycle Costing and Assessment.
This proposal shows the importance of developing the Accounting Information System in a Fitzroy medical center in order to gain effective revenues and achieve competitive advantages. Fitzroy is a small medical center which falls under the service industry as the business type. It has been providing healthcare services to the people. The role of IT consulting team is to define the cost of the software systems, technical requirements, implementation and training strategy, cost of annual maintenance and support for developing the Accounting Information System for this medical center management.
“An accounting information system (AIS) is a structure that a business uses to collect, store, manage, process, retrieve and report its financial data so that it can be used by accountants, consultants, business analysts, managers, chief financial officers (CFOs), auditors, regulators and tax agencies” (Fontinelle, 2018). Accountants at Fitzroy can work with AIS to provide the highest level of accuracy in recordkeeping and company’s financial transactions. AIS are the legal requirements in order to fulfill the tax regulations. Accounting Information System for the company consists of primary components of people, procedures and instructions, software, data, internal controls and information technology infrastructure (Fontinelle, 2018).
The software keeps track of the cash flowing through the business. Fitzroy can use MYOB Essentials starts as the software for the business because it is one of the most trusted accounting software packages which are designed to assist small business. MYOB Essentials Package is the easiest and fastest way to manage and integrate cash flow and ATO compliance requirements. Moreover, GST, invoices, bills, BAS, reports, and PAYG are also included.
The cost of MYOB Essentials starts is $45/month and features included are unlimited transactions, unlimited customer invoicing, bank feeds, supplier bills and unlimited users (Spence, 2017). This works on both MACs and PCs. MYOB accounting software is always up-to-date and is securely backed up online.
In order to develop AIS for this medical center, it is necessary for the IT consultants to consider the technical requirements. The technical requirements for MYOB software include Server, Workstation, Operating system, database, and Microsoft Office, Standalone, Printers and MYOB Practice Cloud Partners (Spence, 2017).
An effective implementation strategy is critical success factor of the system which includes a planned process which is as follows:
This is the important element for the lifecycle of the business which ensures that implementation is carried out at a time, as per the requirement at the highest quality. An experienced MYOB Consultant will help to perform strategic phases of the business, as well as looks after other tasks and manage them to obtain successful outcomes.
Importance of MYOB software
This phase enables configuration of the system to meet the requirements and the deliverables of this phase which include documents and checklists which identify how we want to practice to work and also an agreed business plan and timeline.
In this step, the software provider will help to convert the information into the practice to work.
The software provider will help us to implement MYOB system to maximize the benefits for users. This includes configuring appropriate assignments, templates, security, and workflows as per the requirement.
Proper training and development programs are needed to be organized in order to ensure that the users are able to handle the newly developed software. Hence, the MYOB Software provider provides comprehensive training to help teams to get the best out of the new software and the systems.
MYOB accounting essentials have provided the facility for trial for 30 days. Moreover, it has the money back guarantee within 90 days. It has the auto backup to the cloud with the highest levels of data security like internet banking (Spence, 2017).
The issues of financial risks are currently being minimized due to the adoption of Accounting Information System by the small to medium -sized companies to manage the sets of data. It provides the accurate security approaches such as firewall, encryption, and password to ensure that the confidentiality of the company is kept accurately.
Accounting cycles are an important part of each and every business organization, even if it is a service providing organization, finance and accounting cycles play an important role for each of them. Each of the business cycle play a crucial role and represents a different kind of business activity. Revenue and expenditure cycles form the most important aspects of the accounting cycle. A comprehensive and detailed description of both these cycles have been provided below:
Revenue Cycle: Revenue is the heartbeat of each and every business organization, be it involved in providing product or services. There are two main aspects of this cycle; sales and cash receipts. Sales include all revenue which are primarily earned from the services provided by the medical center. The services are purchased by the customers, who receive various medical services from the medical center of Fitzroy (Yigitbasioglu, Mackenzie, & Low, 2013). Sales discounts, returns and allowances are some of the other parts of revenue cycle. Cash receipts refer to the actual amount of cash received by the medical center.
Technical requirements for MYOB software
The process begins with the first step of providing of services to the customers or patients, secondly, submission of patient documents to the medical center authorities, then the coding of the reports are done. Thereafter the claims are submitted, posted and are intimated to the patients. Thereafter, the reports are generated and consequently, revenue is received from the customer’s end, which marks the end of the revenue cycle.
In MYOB, this entire process is initiated by raising a sales order in case of a patient, then stocks are released for picking (which is the provision of doctors), thereafter the supply of sales order is done (which refers to the providing of services of doctors) and consequently, debtor invoice is processed from the medical center’s end (Fontinelle, 2018). . This marks the end of the revenue cycle.
Expenditure Cycle: Expenditure is one of the most important aspects of medical centers. It is a proof the provision of services to the patients. Transactions, include inventory purchases, which can be done in both cash and credit. Payroll and other cash disbursements are another source of expenses of the medical centers. At any time, when the medical center spends cash, it falls in the purview of the accounting cycle of expenditure.
There are four basic steps involved in this procedure of expenditure cycle, which forms the crux of the expenditure cycle in MYOB. They have been mentioned below:
- Ordering of the various goods and other assets
- Receiving the goods or the assets, ordered in the previous step.
- Approval of invoices of Suppliers from whom the goods and assets to be used in the medical centers were purchased.
- Disbursements of cash is the final step in this cycle of accounting, which marks the end of the expenditure cycle.
- Cash Conversion Cycle: The cash conversion cycle is a metric of measurement of the time taken for the conversion of the products or services into cash or any other kinds of liquid assets. This cash conversion cycle aims to identify and measure the amount of time is taken to convert each input dollar, which is tied with the production and sales of the goods and services, into cash or allied liquid assets (Dimitri & Matei, 2014). This measurement system aims to calculate the amount of time which is needed to sell off the inventory, the amount of precious time required to collect the receivables and the required amount of time needed by the companies to pay off its liabilities and other expenses.
Initially, the inventory are used to produce the goods and service. After this, the account receivables or sales are initiated. Thereafter, the cash is revived from the creditors or suppliers. After receiving the cash, the medical facility in this case, embarks on the payments to be made to pay off the creditors of the company. This process continues and it forms a cycle which is known as the cash conversion cycle management.
References:
Alvarenga, R. A., Dewulf, J., Van Langenhove, H., & Huijbregts, M. A. (2013). Exergy-based accounting for land as a natural resource in life cycle assessment. The International Journal of Life Cycle Assessment, 18(5), 939-947.
Bierer, A., Götze, U., Meynerts, L., & Sygulla, R. (2015). Integrating life cycle costing and life cycle assessment using extended material flow cost accounting. Journal of Cleaner Production, 108, 1289-1301.
Dimitriu, O., & Matei, M. (2014). A new paradigm for accounting through cloud computing. Procedia economics and finance, 15, 840-846.
Fontinelle, A. (2018). Introduction To Accounting Information Systems. [online] Investopedia. Available at: https://www.investopedia.com/articles/professionaleducation/11/accounting-information-systems.asp [Accessed 4 May 2018].
MYOB | Investor Centre. (2018). Retrieved from https:// au/accounting-software/essentials MYOB | Investor Centre. (2018). Retrieved from https://investors.myob.com.au/Investors/?page=financial-reports
Spence, D. (2017). How Much Should Small Business Accounting Software Cost?. [online] Available at: https://www.zrilo.com/blog/how-much-should-small-business-accounting-software-cost [Accessed 4 May 2018].
Sriyono, H. (2017). Effect of Tutorial Instructional Strategy and Drill in Using MYOB Accounting in Vocational High School Bekasi West Java Province. repository, 7(4).
Yigitbasioglu, O., Mackenzie, K., & Low, R. (2013). Cloud Computing: How does it differ from IT outsourcing and what are the implications for practice and research?. The International Journal of Digital Accounting Research, 13, 99-121.
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