HA2042 | Evaluation of Different Accounting Information System

You are recently employed as a graduate consultant in a management consultancy firm and are assigned to a team. One of your firm’s clients under your team is currently evaluating its accounting system and the CFO of your client thinks that they needed to make an investment in an accounting software to take their business to the next level.

Required:

You are required to prepare a report to evaluate and recommend an accounting software for an Australian company of your group’s choice (your firm’s client). The report should include the following components:

a)Assignment cover page clearly stating your name and student number
b)A table of contents, executive summary
c)A brief introduction or overview of what the report is about.
d)Body of the report with sections to answer the above questions and with appropriate section headings
e)Conclusion
f)Recomendation
g)List of references

The accounting system software is designed and implemented to support the business activities and the business functions of the organization. Computer-based accounting system enhance the efficiency and effectiveness of the organization through the automation in the various parts of the business process (Jones, and Jones, 2016). The accounting software is capable of generating the financial reports along with many other reports of the company, further it is also the analytical tool, by which the company can forecast about its opportunities (Metzger & et al., 2015). By considering the increasing importance of accounting information system, the present study is based on the evaluation of investment in the accounting software for assisting Bunnings Warehouse for better management of operational activities of the company.  

Main body 

Overview of the company and its business activities 

Bunning warehouse is an Australian based company, whose headquarter is situated in Hawthorn East, Victoria, Australia. This company was started in 1887, and it became public in 1952. Further, Bunning Warehouse Company is the subsidiary company of the Wesfarmers.  This company is an international household hardware chain and has expanded its operation worldwide s in Australia, New Zealand, the United Kingdom, and Ireland (Bunning Warehouse, 2018). At present, the company has 294 stores, and more than 30,000 people are working for the company. The market share of the company is also very significant; around 20% share of the retail hardware sector in Australia has been captured by the company.

The company is mainly engaged in the selling of the household hardware appliances at its retail stores. There are wide ranges of product available in the Bunning warehouse such as tools, general hardware, screw, bolt and fixing, storage and cleaning appliances, lighting and electrical and so on. Further, the company also provides the D.I.Y advice (do it yourself) with respect to home improvements, kitchen, indoor, flooring, sustainability of the environment to save energy and water through the recycling practices. Moreover, the company also provides in-house services related to insulation assessment and installation, and outdoor furniture assembly.  In the stores, the company also provides the services of special order, kids’ activities, maintain D.I.Y workshops, pool water testing and so on. The company also gives a number of options to its client for providing the product at home safely and securely, as a part of their business process.  

Business requirement of Bunning warehouse

Key business process

Business requirement plays an important role at the time of developing; purchasing the software or the other system; it is because the proposed system from the perspective of the individual, who will use the system, defines accurately, then it will assist to meeting the objectives of the company. Further, the product, system business process, and the outcome of the information management system are a manner to satisfy the customers’ expectations and achieve the business requirement (Kuznetsova, 2017).

A business process is a set of interrelated activities of the company, after the completion of all the activities, the objective of the business achieved (Rosemann, and vom Brocke, 2015). Business process of the Bunning Company includes designing and building home off-site the location and then transportation to a location as per the choice of the customer. Further, they provide the extensive range of farm building and design as per the choice of the customer, offering the high-quality material for the prefabrication of the wall frames, floors, and roof, supply the innovative building product and quality product, provide the power pass to the customers, taking care of the health, safety of the employees, and so on.

The expected outcome of Key business processes

The result of the business process is that the company can deliver the fast and cost-effective designed of the home at the difficult site location along with company also ensure about they meet local building code. This also increased the enhancement of the customer experience. The company also started various schools, sporting clubs, and hospitals for the benefit of the community. Through the new business stores and digital engagement, company is expanding its business (Brandas, Megan and Didraga, 2015). Along with this business process of the company also assist in maintaining the strong relationship with the customers. The company also offers the benefits and opportunities to its employees.  Since the company recruits those employees, who are experienced with the functions of the company so that employee provides the expert advice and great services to the client.  Through its innovative business process, the company provides the product at the lowest price as compared to its competitors (Wickramasinghe, Cooray, and Dissanayake, 2017). Further, the main aim of the company is to conduct the operations of the company after considering the social and environmental aspect of the country, the result of this the product of the company helps in saving the water and energy.  

System requirements

For achieving the objective of the company and the proper operations of the company, Bunning Warehouse has to manage its operational activities in a systematic manner. Further, the basic function of the company to receive the goods, identify and sort it to dispatch to the storage, by receiving the order from the customer, maintain the inventory level, record keeping and maintaining the accounts of the company (Kreutz et al. 2015). Therefore it is very necessary to develop a management system that is engaged in the information technology to minimize delay, product damage and loss. Further, information system should support the identification of the opportunities for increasing the financial profit of the company.

Figure 1: Management of Accounting Information system

(Source: Li, 2015)

For running the warehouse business, it is not only important to maintain the business in the boundary of the organization, but the company is also required to consider the inventory management, inventory planning, cost management, and the implementation of the information technology of the organization (Li, 2015). Company by making the investment in the information technology can track the proper record of the inventory; maintain the level of inventory as per the need of the organization, decrease the cost of the labour, and also it leads to the proper management of the accounts along with ensuring accuracy and reliability of data generated (Miller, Bunn, and Noe, 2016).

Therefore while implementing the software in the organization Bunning Company should consider that the function of the software can be changed according to the situation, and also services are provided by the professional vendor company.  The software is capable of maintaining the all aspect of the operation of the business along with it; software can perform the various analytical techniques so that company can get to know about the operations of the company (Kreutz et al. 2015). The software can be able to identify each and every item of warehouse and also increase the ordering and fulfilment process. Software is capable for the inventory management system of the organization, by which manager can identify the inventory level order, sales and delivery of the product, as the inventory is very important part of any organization, company should maintain the proper inventory in their stock so that it can sell the product on time (Brandas, Megan and Didraga, 2015). Along with this, it is very important that the backup of software can be accessed at the time of loss of data by any uncertain event. Since the Bunning Company also provides the delivery of the goods at the door of the customers, therefore software should provide the status of goods that are in the delivery process and which goods are pending of delivery. This will provide the transparency in the movement of the goods (Jeston and Nelis, 2014). Apart from this identity of the labour and working time of the labor can also be maintained by the software and the performance of the employees can be evaluated. Along with this software also assure about the proper billing system and the identification of the price of the product through the barcode system in the company.

Moreover, company should also install technology in the premises by which the stealing of the product can be track since there is a large number of customers every day on the premises of the company; there is a greater chance of stealing of product from the store (Kreutz et al. 2015). Further Bunning Company expanded its business worldwide. Therefore the company should be able to implement the centralize software at the head office so that it can maintain all the records in respect of inventory, product, order, and so on at the one place and can evaluate the performance of each store. Moreover, at the time of purchasing the software, the company should also consider the services provided by the vendor at the time of sale as well as after sale services (Teittinen, and Granlund, 2017).

The company should also have the proper arrangement of a system for implementing the software smoothly and efficiently as if the system requirement is not proper then it leads to a problem in the installation (Wickramasinghe, Cooray, and Dissanayake, 2017). There are four elements of the business requirement such as functional requirement, data requirement, quality requirement and the constrained. By getting the information about software system requirement from the vendor, the company can also improvise the performance of the software by customizing it.

Selection of the accounting software for the Bunning warehouse 

Accounting software of the company automates the many operations of the business and assist in maintaining the books of accounts in a very easy, accurate and reliable manner. Accounting software of the company enhances the efficiency and effectiveness of the company, and it is also considered as a cost reduction technique for the company (Shagari, 2017).

By considering the operations and functions of the Bunning warehouse company, the following software will be beneficial for the company.

1. SAP accounting software- By using the SAP accounting software, the customer can connect with the company and can give the order by using the system. It is very easy to understand and to work with the SAP software (Wickramasinghe, Cooray, and Dissanayake, 2017). The features of the SAP accounting software is inventory accounting and forming the profit and loss account by which the manager can know the defaults for the company, wrong value to the item or the group of the item and so on. Along with inventory management, it also enables for an accounting of the sale and purchase of the goods so that the company can produce their financial reports (Koleva, Gradl and Krcmar, 2015). This system creates the automatic journal entry; so there is no need of separate entry for each item. Along with this many standard reports such as trial balance, the budget report can be created by the SAP accounting software.
2. Microsoft Dynamics NAV accounting software- This software provides the up to date financial information, which enables the company to evaluate performance and make decisions accordingly (Trigo, Belfo, and Estébanez, 2016). It assists in maximizing the cash resources with flexible, integrated accounts payable capabilities. Further by this software, the company can do the cash flow forecasting, bank reconciliation, intercompany posting, electronics payment, and other related activities.
3. XERO accounting software- This accounting software offers various tools and technique for managing the bank transaction, inventory management, comprehensive financial report, payroll management, and detailed financial reports. It is user-friendly software, which increases the efficiency of the company (Ismail and King, 2014).

Category of accounting software 

Generally, accounting software is the application software of the organization, which record and processes the accounting transaction taking place in the operations of the company. The organization can develop the software on its own or can directly purchase the software from the vendor or can be developed by the third party as per their own requirement. The accounting software of the company is a mechanism for accounting information system (Bhimani, Willcocks, 2014).

There are three categories of the accounting software, it depends on the size and nature of the business, whether to implement low-end accounting software, medium end accounting software or the high-end accounting software (Abdinnour and Saeed, 2015).

Low-end accounting software performs only the basic function of the accounting; it is the general software, not specific to the industry, which can be used by all the business types. Medium end accounting software enables the accounting in the multiple currencies, by which the requirement of the international firms can be fulfilled (Wickramasinghe, Cooray, and Dissanayake, 2017). High-end accounting software will be implemented for the long period of time, and they contain the more specific features and can be customized according to the requirement of the business.

Comparison and selection of the best accounting software for the Bunning Warehouse

The best way to select the suitable accounting software for the company is to analysing the result by comparing with each other. Here, for the selection of the appropriate accounting software for the Bunning Warehouse, the comparison between the SAP and XERO and their features are given as below-

Table 1 comparison between the SAP and XERO accounting software

Comparison	SAP	XERO
Introduction	It is used by around 50,000 customers, at 47 location 37 language and assists the business process in 25 industries.	It is an online accounting app which is designed by considering the requirement of several industries.
Rating	8.5	9.5
Customer satisfaction	100%	97%
Characteristics	It is the Fundamental human resource software which assists in obtaining the raw material required for the services. Along with the essential part of the software is in finance, and also help in creating the product idea until it reaches to the market (Abdinnour and Saeed, 2015).	It assists in keeping and maintains the record of the supplier and customers. Moreover bank reconciliation, inventory management, financial reporting, log in facility from anywhere, make and send the invoice automatically, online accounting access at any time and from anywhere, payroll management, purchase order, free and unlimited e-mail support, mobile apps for the i-phone, Android and i-pad users, managing multi-currency and so on (Bodnar, and Hopwood, 2013).
Price	High	Moderate

By analyzing the above comparison, it has been concluded that for the Bunning Warehouse, SAP will be the most suitable accounting software. Since the accounting software is consist of many features, which are already discussed above, leads to the company to gain the competitive advantages. Through the inventory management by the software, it makes the balance between the level of inventory and the demand of the product, as in warehouse business, inventory plays a very important role in the performance of the organization, Such as excess or less inventory affects the cost of the organization (Wickramasinghe, Cooray, and Dissanayake, 2017). Along with this by maintaining up to date inventory level, the company can place the proper order, by which the efficiency of the organization also will increase. Therefore by implementing this accounting software in the Company can maintain the proper level of inventory. Moreover, this software also won the best award as per the choice of the expert in the year 2017.

Therefore by implementing the SAP accounting software, the company can place the timely and accurate deliveries to customers and also interlink the other business process.

Conclusion 

On the basis of above the above study, it has been concluded that selection and implementation of accounting software depend on the requirement, operations and the functions of the business. Therefore, if the requirements of the business operations are clearly defined, then only the proper accounting software can be implemented for the organization. The company can develop the software in-house, can buy from the vendor or customize the software according to the specification of the process of the company. However the selection of the software is not an easy task for the company, but it can be done by comparing features of the software and can choose the best software, which is suitable for the organization. Selected accounting software for Bunning Warehouse will assist in inventory management, maintaining the customer and supplier record, and stock level. It will also provide proper and reliable data and also enhance the efficiency of the operations of the company.

Recommendations

In accordance with the present study, Bunning Warehouse is recommended to make the investment in information technology as it provides the improvement in managing the organization. By using the software, the company can get the cost advantages from it, since by implementing the software design cost of the product is reduced and low cost assists in the better performance of the operation. Further, the company will also be able to provide the different services to the buyer, by which buyer can get attracted, which leads to the overall growth of the company (Daru, 2016).

For the Bunning warehouse company, high-end accounting software will be the most suitable for the firm. As the company is one of the largest company of Australia and expanded its business in other countries also, therefore it is better to use the high-end accounting software in the company, by customizing the software as per their specific requirement (Cauvain, 2015). Bunning Company can integrate all the operations such as planning, material purchasing, inventory management, finance, marketing in one software by which company can determine its own performance and on the basis of this make the future strategies (Harmon, 2014). The further company can also apply the analytics by using the high-end accounting software. This software is customized by the company; therefore it is also easy to use. Due to the reliability, accuracy, customization, connectivity it is beneficial for the Bunning company to implement the high-end accounting software in the company, for the effective operation as well as for achieving the competitive advantages by the company (Trigo, Belfo, and Estébanez, 2016).

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