Accounting_Information_Systems

This briefing on accounting information systems (AIS) will discuss the process of improving the AIS for Kudler Fine Foods. The use of industry-specific software will help improve the payroll, accounts payable, accounts receivable, and inventory processes. It will touch on the opportunities for expanding system environments to show how reporting capabilities enable, manage, and help the system better perform to demonstrate clearly its value to the business. Flowcharts for each of the four systems will show how a process could ideally function with the new AIS. The proposed AIS will support better operations and will provide better financial data for improving management’s decision making at Kudler Food Automated Process of Accounting Information Systems This brief on accounting information systems (AIS) discusses why Kudler Fine Foods should purchase an industry-specific software instead of developing a customized software. The recommended automation, enhancement and maintenance schedules of the AIS supported by flowcharts will show the flow of data into and from each of the four accounting systems – accounts receivable, accounts payable, payroll, and inventory. Finally, the incorporation of the new software to the existing accounting information systems will add value to the accounting operations of Kudler Fine Foods. Rationale Behind the Recommended Course of Action As the company continues to expand, a need to invest in technology arises. Technology can increase the productivity of management tasks to provide more time to focus on strengthening customer relations. We recommend the purchase of industry-specific software to save time and money, and reduce mistakes. Doing so also increases the efficiency of operations by simplifying and reducing the time required to evaluate, buy, and implement manufacturing solutions. Finally, technology will help the company concentrate on its goals to grow and remain competitive in today's global marketplace. Characteristics of the AIS Kudler should prioritize automation, enhancement, and maintenance of the four systems. The software should allow Kudler to enhance features and capabilities by adding modules, such as one for customer relationship management. Maintenance of software should be performed regularly, including backing up, installing software patches, and upgrading to improve performance and to adapt to a changing environment. Payroll The AIS should automatically calculate earnings, payroll taxes, and deductions after importing employees’ hours from the timekeeping module as shown in Appendix A. Employees can opt to receive paychecks or use direct deposit. The software also helps track federal and state taxes owed, which can be paid with checks or electronically. Accounts Payable The AIS automatically generates a purchase order when inventories fall below specified levels (Bagranoff, Simkin, & Strand, 2008). When a fax, e-mail, paper or electronic invoice arrives, the AIS captures data such as vendor number, purchase order number, and due date, as shown in Appendix B. The AIS should have a control feature to avoid payments to unauthorized or nonexistent vendors. Accounts Receivable The AIS creates enhancement for accounts receivable system of Kudler by using a sales order module that will integrate with inventory. Currently, the company uses the cash basis accounting method for all sales. Although the business only offers cash and carry, an opportunity exists to use ecommerce for growth of the business. The POS module replaced by a sales order module offers more flexibility and control of inventory, as shown in Appendix C. Inventory Kudler uses Excel to maintain the inventory. An AIS system will automate the inventory process to streamline purchasing and reduce inventory for the company. Through enhanced accounts payable and accounts receivable systems, inventory updates on a more timely and accurate basis, as shown in Appendix D. Adding Value to Accounting Operations The recommended changes will provide accurate and timely information to enable sales and purchase activities to be performed more effectively and efficiently. In other words, the software will improve the quality of Kudler’s accounting system and reduce the cost of products and services, improve its decision-making capabilities, and increase sharing of knowledge within the company. The software will add value to Kudler and enable it to identify and interact with its suppliers, distributors, customers, and employees. For example, during the order process, when a customer inquires about products available for sale and when the company receives a payment for a completed sale, each employee will have responsibility for a particular function: a receptionist or secretary may handle general inquiries, a salesperson may follow up on product inquiries, warehouse personnel will assume responsibility for filling the order, and an accounts receivable clerk will send a bill to the customer, and so on (Bagranoff et al., 2008). Therefore, the software helps accelerate the process by filling a customer’s order quickly and as a result, customers are more satisfied. Conclusion The recommended industry-specific accounting software provides opportunities for Kudler Fine Foods to reengineer its business processes in ways that will help them achieve their objectives. Aside from improving controls involved in each of the four main accounting systems, these improvements in AIS will provide better financial information to help managers understand how the business operates and identify business processes that need attention. Hence, Kudler will experience less risk when analyzing errors, frauds, and omission as the accounting information system becomes more efficient. References Bagranoff, N.A., Simkin, M.G., & Strand Norman, C. (2008). Core concepts of accounting information systems (10th ed). New York: Wiley & Sons. Appendix A: Proposed Automated Payroll System at Kudler Appendix B: Proposed Accounts Payable System at Kudler Appendix C: Proposed Accounts Receivable System at Kudler Yes No Appendix D: Proposed Inventory System at Kudler Yes No