Advantages of Implementing an Automated Accounting System
Companies are moving from individual system modules to the integrated systems. This has provided opportunities and cost saving to the companies. Also, it has created a few challenges for the companies for effective cost saving. The information account system has led the companies with effective cost saving with the help of ERP (enterprise resource planning). It is estimated that the approximately 2% – 5% of the annual revenues are spent on ERP.
AIS (Account information system) is used to provide the data related to cash flow. It helps in analyzing the company’s ability to take decision related to investment and the cash flows. The main objective of accounting information is to provide the actual information regarding the cash flows in various departments of the organization. The division of the cash that is made for the cash flows from operating activities, investment, financing, creditors and other activities related to the cash flow. Earlier the work has been done manually. But, nowadays automated system is used to do the accounting work. This has made the accounting work faster as well as secured.
The ERP system can provide support for all functions of an organization and can help conduct business operations more efficiently, through their large online databases. ERP systems in leading organizations’ links at all the systems in organizations to a single hybrid function which provide the information. Basically the ERP system has a central database system that can serve many systems at a time. Therefore, it is an effective system which serves many systems at different firms to evaluate the success rate.
The business report below is an attempt to suggest the Accounting software to the company named Western Digital, which is a manufacturing company producing pen drives. The company is using the manual accounting information system. The software that is selected for the company is efficient to replace the manual system with the automatic one. It is an American based company which sells memory cards, pen drives and other types of memory storage products. This company is now looking for switching its account information system to automatic one so that the précised analysis of account information can be done for sales and revenues.
A plan must be developed before implement the new technology into an organization. Firstly, the current scenario of the work should be studied for implementing the new plan. The Business plan has to be developed by considering the main aim and objective and reaching towards the goals of the company (Pegasystems, 2017).
Necessary System Requirements
The main aim here is to replace the manual accounting system with the automatic system. The replacement is done with the help of an automatic system software implementation in the selected firm. The development of the software is done according to the needs of the firm and also by analyzing, what is the main requirement of the firm. So by considering the actual needs the software can be developed. Also, the features that should be incorporated in the software must be critically analyzed. Only those features must be added that are accepted by the clients. The software should be that much effective so that no extra efforts will be taken by the clients to incorporate the software into its organization. Promotion is quite crucial in the marketing strategies as it helps the firm to know what people thinks about their brand and what perceptions do they have about the particular product or service. These promotional activities allow the clients to give their feedback over the services and, therefore changes could be made accordingly in the near future (Skielse, 2006).
After the promotions are done, the focus is towards the development of the software. Software development is done with the help of IT experts. They help in developing a user friendly software which can be used by the firm without any problem. Also the account information software should be efficient to process high volume of data at a time, so that work can be done effectively without any hassle. This will help the firm to save time as well as resources. After the development the management of the software is the main work. The possibilities of further improvement and advancement in the software should be there. Also, technical problems like bugs and errors should be seen by the company and improvement in removing them should be done by the firm (Ogunyemi, 2014). This must be the prime duty of the vendors to assist the clients in such kind of situation and provide them the service and remove the fault or fix the issue in particular time.
The elements that are required to follow and to achieve the main objective of the firm are basically business requirements. The requirements vary from a company to company and keep on changing depending upon the clients. Therefore, the vendor should keep check on the requirements and should do the work accordingly. Also, the requirements keep changing according to the advancement in the technology and customer’s perception. Therefore, requirements should be restructured according to the changes. The business requirements of the firms are complex, therefore these can be understood only by the head and main executives of the company. A requirement list should be prepared in an enhanced form so that each need of the client should be satisfied. Also, the concept of implementing software is new for the firm therefore requirements should be written clearly so failure to the implementation of software should be avoided.
Choosing Appropriate Software
The Western Digital is basically a pen drive and memory card manufacturing company. So, the sale of the products is also online. The main market of the company is through online sales. Therefore, requirements should be framed accordingly. The business requirement comprises of the following listed below.
- As the basic requirement for the company is to installation and maintenance of the new account information software. As the company is not use to with the software use the main work is to make them aware of handling the software.
- The company’s work depends on the internet. Therefore, a requirement of the strong and high speed internet is needed (Arora & Erturk, 2009).
- The financial transaction also occurs on the internet. So, the strong and secured software is needed. Also, the advanced version of the software must be installed so that there must be no problem during the transaction.
- The developed software must be advanced, efficient and time saving as the transformation should be seen by the employees as they are shifting from manual to automated one.
- The Information Technology is used by the company if it’s adding an extra value to it. If the software that is installed is not cost efficient, the clients have to bear extra costs that sometimes exceed the budget and will result in extra losses of the firm. If the accounting software deployed used in the correct manner, then the running cost of the company is reduced which makes it cost efficient (Singla, 2008).
- Software must be developed in such a way so that it must keep records on daily purchase. The purchase could be online as well as offline. Also, the record of the employees’ daily works, their performance, their leave and also the extra working hours should be kept.
- The companies could use the Accounting Software to calculate payroll and associated entries, Automatic adjustments of Stock Records, Integration of a company’s database with Accounting Records and even making payments to suppliers and for other related expenses.
Switching the manual system with the automatic account system requires many changes in the firm. The old manner of maintaining the records will be eliminated by the software system which is a faster as well as efficient one. The switching requires the number of steps to be followed so as to achieve the goal of the completion of the installation. One of the main challenges for the installation is for the evaluation of the requirements so that the objective could be achieved.
The system requirements of the newly introduce Accounting Systems highly depends on the type and level of the software. The big company requires the highest levels of hardwares whereas the small company requires less hardwares. Also, a team of experts is required to handle the softwares and the systems during the technical problem and any kind of technical issue.
Basically hardwares with the strong connecting network is required within a company (Anthony, 2016). Also the computer systems with an operating system that is updated to a newer version, a microprocessor with high capacity random access memory and an internal storage memory is required. An updated operating system is required so that the software could be installed properly and can function without any obstruction. Fast processing can be made with the help of fast microprocessors. Also, systems should have 10 gigabytes free space an initial level. The networks should be secured within the firm so that crucial messages could be sent and received securely (Wanare & Mudiraj, 2014).
The Accounting Software being used should be installed on a Business Class computer and the home-based computer models should be strictly avoided. This is crucial because while running any business application, there is a need of a system that delivers high speed performance. In the absence of this there are more chances of processing duplicate and erroneous data. As the concept is quite new then there is a requirement of replacing both the computer hardwares and Operating system once in a three year, so that the advancements in the software are easily compatible with the new systems (Addo-Tenkorang & Helo, 2011).
The system requirements for Western Digital is listed below. The prime system requirements are:
- Hardwares
- Associated Softwares
- Printer with a high printing speed
- A huge Network with smooth networking speed
- An advance Operating System
Conclusion
User friendly softwares must be chosen so as to be implemented in the firm. But, also care must be taken to reduce the risk of safety and security. As the user friendly softwares create a significant security risks of data hack. For the new company to adopt the automatic account software, various things should be considered. Also, for new users the security should be preserved. The budget conditions and expenditure should also be taken into account during the selection of the software.
Choosing an appropriate software has become the most critical decision for the firms. Therefore, the software selected should best serves the need of the client and also satisfy the future needs. Some firms select the accountants at the end, leaving the software as it does not fulfill their needs. So choosing the appropriate software is a big task for the firms.
The old softwares in accounting field were Redwing, less accounting, and MYOB while the newer ones include Xero, Freshbooks, QuickBooks, Sage and Netsuite. Redwing is popular in the Accounting Services from many years and it has also released its online services, so that it can attract the customers base online. The company is at present following a competitive pricing strategy and is even offering a free conversion from the competitive Accounting Software Providers. The Reckon One initiative allows the clients to directly connect their bank accounts with the firm and receive live feeds.
Sage is a business accounting software that helps in the invoice. Paybills and manage the transactions. The best accounting standards are built by Sage as it provides most secured transactions, secure the desktop installations. It also provides subscription plans that offer better services to the customers. It keeps information secure on the desktop as well as cloud information can be accessed securely.
Quickbook are easy to set and use and it does the accounting automatically (Darroch, 2014). It helps in tracking the money that is coming in or going out from the business at one place. So, it helps in getting the clear idea regarding the financial status of the business and keeps ready for the tax time. It also backs up data with a high level of security and also can be available from any device.
Vendor selection is very important as it gives the perfect services to the clients. They also help in maintaining the software. For the selection of appropriate vendor, the things that should be considered are
- The vendor should provide quality services and should be an experienced one.
- The vendor should do its work in time and should be consistent.
- The vendor should analyze the actual needs of the clients and should provide a proper software according to their needs.
- Support should be given by them whenever required.
- Automation increases the speed of work
By switching from manual to automatic services the speed of the work is increased as the calculation are done faster with the help of softwares. Also the record is maintained properly and can be retrieved at any time with the help of a single search option. But, more efforts took place in the case of manual records.
- Error free work with technology
The possibility of the errors is reduced with the help of automatic work. As, the calculations are made automatically. Data accuracy is increased as the technology is implemented in the work. This increases the efficiency of work as work time is saved and more work effectively can be done in less time.
- Secure user access and control
By using automatic systems, the security in terms of access increases. Passwords can be applied so that only the selected user can have access to the important data. Therefore, it also helps in increasing the efficiency as leaking of the important data can be prevented. As, a result of which the efficiency of the business can be increased (France, 2013).
- Awareness
Awareness among the clients is necessary for the implementation of the software. Switching from manual to automatic needs a lot of awareness regarding the accounting information software (Moersch, 1995).
- Exploration
After that, various softwares should be explored so that the appropriate software should be selected by the clients which fulfill all the needs of the client. The increase in efficiency should be observed by the clients
- Integration
The use of the software can be done by the clients. Also user friendly software is implemented so that the user can get comfortable with the softwares. The integration process takes time, but once it is completely incorporated benefits can be seen (Christopher, 1995).
- Refinement
Also, the changes and updating of the software could be done according to the needs so that the efficiency of the company cannot get affected by the implementation. Also, any software problem arise in between can be solved by the vendors to provide hassle free service.
There are some threats to system security, integrity, accuracy as well as availability of the system and its data by implementing account information software. But it entirely depends on the type of software implemented by the client. Most of the softwares are nowadays providing security for the database. So that data leakage or data hacks can be avoided. Also laws have been developed by the government of various countries over the data breaching. The softwares are made nowadays, so much secure that no data hacking is possible. But, there is a little risk of the security of the data if somebody access in the false way. Also, the softwares are made in such a way that if any invalid person accesses the data the alarming sound has been made by the systems to avoid data breaching.
Data breach risks can be avoided by preparing a data loss protection plan that will enable decisive action during the case of hacking and will enable the working of the company. Whenever it seems that data is at risk the users’ first reaction is that to delete the data. Therefore, having a backup plan helps in protecting the data loss (Kroll, 2017). Also, alarming security must be provided by the vendors so that in case of data breach the alarm can inform about the access to the data. Various passwords should be developed so that anyone cannot have access to the secured data.
- Back up data plan
- Alarming sound in case of invalid access
- Secured passwords
Conclusion
It is an important decision made by the firm by switching to the automated accounting system.
With the help of accounting system financial data can be processed quickly so that time can be saved and work efficiency can be increased. The development of enhanced accounting software requires a close evaluation of the existing players in the market and selects the one who will be able to satisfy the needs of the firm. Implementing the software is new for the Western Digital, therefore they require a software that is well précised to their needs as well as services from the experienced vendors. From the above analysis Quickbook has the capability to fit against the company demands. Becoming more precise Sage could be considered as priority. Therefore, these can be considered as they have the capability to provide services as well as they are convincing in terms of the automation as a reform for them.
References
- Addo-Tenkorang, R. & Helo, P., 2011. Enterprise Resource Planning (ERP): A Review Literature Report. Proceedings of the World Congress on Engineering and Computer Science, 19-21 October, Volume 2, pp. 1-9.
- Anthony, C., 2016. Enterprise Resource Planning (ERP) adoption in a hybrid service and manufacturing Small and Medium- sized Enterprise (SME): an action case study, Available at: https://usir.salford.ac.uk/38665/4/PhD%2520Thesis%2520-%2520%28Chinedu%2520Anthony%2520Ofoegbu%29%5B1%5D.pdf
- Arora, J. & Erturk, E., 2009. An Exploratory Study on the Implementation and Adoption of ERP Solutions for Businesses, Available at: https://arxiv.org/ftp/arxiv/papers/1701/1701.08329.pdf
- Christopher, M., 1995. Levels of Technology Implementation (LoTi): A Framework for Measuring Classroom Technology Use.. November, 23(3), pp. 40-42, Available at: https://eric.ed.gov/?id=EJ515029
- Darroch, D., 2014. The top 20 accounting software products, Available at: https://www.symmetry50.com/blog/2014/11/8/the-top-20-accounting-software-products
- France, M., 2013. 5 ways cloud accounting increases financial efficiency and accuracy for the enterprise, Available at: https://www.techrepublic.com/blog/the-enterprise-cloud/5-ways-cloud-accounting-increases-financial-efficiency-and-accuracy-for-the-enterprise/
- Kroll, 2017. Data Breach Prevention Tips, Available at: https://www.kroll.com/en-us/cyber-security/data-breach-prevention/cyber-risk-assessments/data-breach-prevention-tips
- Moersch, C., 1995. Levels of Technology Implementation (LoTi): A Framework for Measuring Classroom Technology Use: International Society for Technology in Education, Available at: https://loticonnection.cachefly.net/global_documents/1995_11NOV_LoTiFramework.pdf
- Ogunyemi, O., 2014. A Case Study Analysis of Factors (Success and Failure) Affecting Enterprise Resource Planning System Implementation in Nigeria. International Journal of Managerial Studies and Research (IJMSR), June, 2(5), pp. 1-8.
- Pegasystems, 2017. Building a Better Banking Business Process, Available at: https://www.pega.com/banking-business-process
- Singla, A., 2008. Impact of ERP systems on small and mid-sized public sector enterprises. Journal of Theoretical and Applied Information Technology, 4(2), pp. 119-132.
- Skielse, G., 2006. ERP Adoption in Small and Medium Sized Enterprises, Available at: https://www.diva-portal.org/smash/get/diva2:10252/FULLTEXT01.pdf
- Wanare, R. & Mudiraj, A., 2014. Study on Business Process Reengineering(BPR) and its importance in ERP Implementation. International Journal of Research in Computer and Communication Technology, July, 3(7), pp. 1-5.
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