The processes of Kudler Fine Foods include inventory, payroll, accounts payable and accounts receivable. Using accounting information systems, Kudler Fine Foods has the potential to improve these processes. Kudler Fine Foods has hired an accounting firm to recommend systems to assist with automating their current processes. The accounting firm has recommended that Kudler Fine Foods purchase industry-specific software. The firm will provide flow charts to capture the flow of data from each of their accounting processes and offer recommendations.
Automated Process of Accounting Information Systems
In selecting an Accounting Information System (AIS) it should meet the current and future reporting needs of the company. The company is looking to expand into different geographical locations; the AIS should be able to support more than the current three stores. The AIS will need to be accessible to multiple users at one time, secure, dependable, flexible, and dynamic. The AIS needs to change as the company expands. The system should also integrate with the customer relationship management (CRM) system, ecommerce, B2B; electronic data interchange (EDI), employee management, and marketing.
Kudler Fine Foods utilizes check printing, tax and freight allocations, and multiple bank accounts, purchase order module posts vendor orders directly to the accounts payable module, and handles international addresses necessary. Cash transactions create some difficulty for the company. At times, Kudler purchases locally grown produce and growers insist on being paid in cash (Apollo Group, Inc., 2008). The current system at Kudler could be improved through the automation of some key processes. In particular, the issuance of checks, faxing receipts and the manual entry required. The objective of accounts payable processing is to pay vendors at the optimal time, taking advantage of cash discounts offered and avoiding late fees. (Bagranoff, Simkin, Strand Norman, 2008). Figure 1 shows the flow of data in the accounts payable system.
Accounts receivable is a scaled down version as the primary revenue stream, basically a cash and carry basis. On rare occasions large catered orders will be invoiced (Apollo Group, Inc., 2008). ???With accounts receivable, companies keep track of amounts owed to them from their customers??? (Bagranoff, Simkin, Strand Norman, 2008, p. 121). An updated system can save time and money by creating a secure network that issues automatic transfers to vendors requiring cash payments. Improved AIS processes have the ability to link information and automatically post entries when a charge to an account is made. Similar linking with secure bank accounts to record payments from catering accounts can be recorded into the general ledger. Figure 2 shows the flow of data in the accounts receivable system.
Kudler??™s payroll processing is outsourced. The AIS is used to maintain the employee information such as personal data, compensation, benefits, tax data, attendance, performance reviews or evaluations, and termination data. It provides wage and records to the outsourced payroll provider for processing, compiles and maintains records for use in employee benefits administration. The AIS is used to update employee files to document personnel actions and provide information for payroll and other uses. The files can be examined to answer inquiries and provide information to authorized persons. Figure 3 shows the flow of the payroll process.
The inventory system needs to use the current technology to its advantage. Inventory can be tracked using the system when it is delivered. When inventory is received, it should be scanned allowing the system users to view descriptions and confirm that it has been received. Inventory reports can be utilized to determine the most popular inventory sold at specific times of the year. Figure 4 shows the flow of the inventory process.
Kudler is the perfect size company to use an Enterprise Resource Planning (ERP) system with Software as a Service (SaaS). Using and ERP system will integrate the purchasing functions through B2B or EDI. This will improve efficiency and eliminate human involvement. The ERP system has an ecommerce module and marketing feature, Kudler is looking to develop. ???SaaS is a software deployment model where applications are remotely hosted by the application or service provider and available to customers on demand over the internet??? (Rane, 2010, para. 3). Having the ERP system available over the internet will eliminate the need for server and generator hardware.
The recommendation is to implement NetSuite an ERP system that uses SaaS. The system meets current and future reporting needs of the company. The system has a multiple user interface, secure, dependable, flexible, and dynamic. As the company expands, the system will be maintained and upgraded. The system integrates with the customer relationship management (CRM) system, ecommerce, B2B; electronic data interchange (EDI), employee management, and marketing.
Bagranoff, N.A., Simkin, M.G., & Strand Norman, C. (2008). Core concepts of accounting information systems (10th ed). New York: Wiley & Sons.
OBrien, J.A., & Marakas, G.M. (2008). Management Information Systems (8th ed.). New York, New York: McGraw-Hill. Retrieved April 6, 2010, from University of Phoenix, rEsource, ACC542 website
Rane, P. (2010). Securing SaaS applications: A cloud security perspective for application providers: Information Systems Security. Retrieved April 11, 2010, from http://www.infosectoday.com/Articles/Securing_SaaS_Applications.htm
Apollo Group, Inc. (2008). Kudler Fine Foods. Retrieved April 15, 2010. ACC/542 – Accounting Information Systems.