Digital Accounting Risk and Control Strategy

Question Discuss about the Digital Accounting Risk and Control Strategy. Answer: Introduction An accounting information system (AIS) plays a significant role in getting competitive advantages against the strong competitors (Holtje Shelly, 2009). Therefore, the aim of this report is to provide the involved processes that are used by an organization in the selection of effective AIS. This report will describe the definition of an existing business process, requirements of the business, and requirement of a system. This report is based on a case organization, which is B Bakery. Involved Business Processes The business processes of B Bakery can be better understood through the help of its business. The business of B Bakers is handled by the owners family, who has a long-history in the operational areas. This organization is currently producing confectionary products and wants to make changes in the quality of the products to ensure the long-term survival in the market. Processes for business activities: The core business processes of the organization can be defined through the help of those processes, which are utilized by the organization to produce the end products to customers. In this context, the core processes are the manufacturing of confectionary products, procurement of involved resources, products marketing and distribution of products in each target market. The operation management team of B Bakers collects the raw materials from suppliers and procures it till the final production of confectionary products. On the other hand, the distribution department of the organization ensures the delivery of end products to customers through the help of suppliers in market for addressing the needs of customers timely. Therefore, it can be stated that the processes related to production, resource procurement and distribution are some more important core processes of B Bakers, which are interrelated. The relationships between departments allow the org anization to generate the sales and earn profits. Hence, it helps the organization to get competitive growth in the market. Processes related to management of business: Analysis of B Bakers describes that the organization uses the processes related to the management to achieve the business objectives. These processes include the management of the required resources; plans related to resource allocations and control of entire operations related to the production in an effective manner. Through the help of these processes, B Bakers governs the whole process of operations towards the competitive goal achievement. B Bakers also uses the process of strategic management to analyze the competitive strength and growth of the organization in a competitive environment. Strategic analysis related process facilitates the make short-term and long-term business strategies to counter each policy of the competitors in the market in a more effective manner (Collier Agyei-Ampomah, 2008). This process helps the management of the organization to make effective strategic planning and execution of the resources. With the help of this, the strategic management team of the organization makes policies to ensure the successful execution of its core business processes. As a result, the management can take the actions for ensuring that the entire departments are getting maximum utilization of existing resources that will be reflected in the term of sales. Processes that support the business functions: On the basis of the business functions of the organization, it can be stated the organization has developed some effective processes that help each department to perform each operation of the organization in a more effective manner. B Bakers has used these supporting business processes through the help of core processes and management processes. The supporting processes are related to the internal functions of the organization that facilitates the organization to address each concern of the customers in a satisfactory manner. Accounting related processes; selection of the best team for conducting operational processes; and technical support to each department are some supportive processes that help the organization to perform each activity that can help to administrate the value chain functions (Collier Agyei-Ampomah, 2008). Through the help of these processes, the management does not only maintain the account books, but also manage the record of each business related transactions. As a consequence, the organization complies with the norms and rules of the business industry and government. Develop Business Requirements Indispensable Processes The competition in the segment of the confectionary products is increasing that is affecting the business of B Bakers. Therefore, management of B Bakers wants to offer healthier product range to its customers at reasonable cost, which requires the perfect alignment between each department of the organization and involved functions. Therefore, the role of supporting business processes is most advantageous for the organization in achieving the expected growth objective otherwise (Phelps, 2015). The existing business processes may not help the organization to achieve the expectations. For B Bakers, the selection and recruitment of effective and skilled human resource are a main support process because it may help the organization to address each concern of the market and customers. If not, then the organization may face great trouble in the market that may affect the core business of B Barkers because less effect employees will not help the organization to produce quality products that will not only increase the cost of operation but also increase the labour cost. The poor selection system for employees will also affect the value creation process and customer satisfaction that will decline in the overall performance of the organization and annual revenue. On the other hand, the production of new quality products range under the economical cost is also an important support process to the organization. With the help of skilled workers, B Bakers can reduce the cost of operations and increase the quality of the outputs. The supporting processes will help the management of B Bakers to correct reliable information, which will help to make accurate decisions related to the functions of the organization at any time. The processes related to the management of accounts are also important because it will help the accounting department to manage the accounts related to suppliers and customers in a more effective manner (Albrecht, et.al, 2010). Through this, the cooperation between departments may be increased and they will assure their maximum involvement in the organizational business activities. Further, processes related to accounting activities play most important role in the sharing of important information related current financial ability of the organization. As a result, the management of B Bakers may make effective decisions related to the allocation of resources and required processes to guarantee the right implementation of resources. Required Outcomes from Above Processes to achieve Business Objectives For ensuring the growth of business, the real-time data based decision making is a most important function that has to perform by the management of B Bakers. Therefore, each supporting process should have to ensure the regular availability of real time data to management related to the operations or functions. As a result, the management of the organization may be able to make a comparison between existing operations and involved resources in the term of revenue and profits (Phelps, 2015). Therefore, growth achievement is a main objective of the organization. Therefore, the organization will require the outcome related to value creation from the help of entire business processes. So, the processes related to employee recruitment, operations, accounting, and services should have to design in the organization to add more value to employees, customers, government and other non active stakeholders (Dagwell, Wines Lambert, 2011). In this context, it can be said that the entire business p rocesses of B Bakers have to make increment in the operational efficiency to ensure the production and delivery of quality products at reasonable cost that will give the competitive benefits also. On the other hand, the improvement in the operational activities is also an expected outcome of the business processes because it will help B Bakers to target potential clients effectively. It will also help in the sales increment. The management of the entire accounting related systems in an effective manner is also an expected outcome of the system that will help the management to get accurate information related to the business along with the performance of the organization on the basis of involved resources (Albrecht, et.al, 2010). This term will not only allow the organization to make improvement in the performance of the B Bakers but also help to get the maximum utilization of the resources to produce quality goods. In the similar sense, it is also an objective of B Bakers to ensure the operational work flow through the help of significant alignment between entire functions. This objective will also help the organization to replace the workplace conflicts and improve the level of mutual cooperation (Dagwell, Wines Lambert, 2011). Therefore, the improvement in the management and allocation of the work is some outcomes for the above defined processes that will make a positive impact on the business functionalities of the B Bakers. Determination of System Requirements Software features Management of B Baker wants to implement an effective software package that can help in the management of accounts. Therefore, it is most important for the organization to make a proper analysis of the requirements that have to fulfill from the accounting software before making any kind of decision related to the investment (Ttulos, 2008, p. 68). Followings are some required features for the accounting software in the term of B Bakers objectives: Data recording at each level with a regular update of the system: It is a well known term that IT system related to accounting activities stores each data related to the organization. There, the requirement of the accounting system is tantamount to collect the data from each department at the same time and update the system quickly (Wilson, 2016). With the help of this, the management of B Bakers can be able to know the entire collection everyday and make analysis of the performance of the operation team and marketing team. Therefore, the data gathering and system update are two main functions, which have to fulfill by the system. Requirement related to reliable Data Reporting: The norms and laws of every country impose pressure on every organization to give the report related to financial situations. Therefore, the required IT systems should have to fulfill the need of the organization related to financial reporting and keep away the organization from any legal burden. The IT system should facilitate the organization such as B Bakers to get a report related to financial situations, sales, revenue or profits as per specific period that can help in decision making. As well as the systems should also allow the organization to show the financial data to important shareholders at any time. Ability to respond towards changes: For the B Bakery, the accounting system should have the upgrading feature that can help the organization to respond as per the need of the organization and changes in the external business environment. This feature will also help the organization to manage the changes in the accounting process that can take place after the implementation of the strategy related to the production of a new product range. As a result, the upgrading feature of the software will allow the organization to add new features at any time. Security with online connectivity: For an organization, the protection of data is most important because it allows the organization to keep business activities from any kind of leakage. To achieve the objectives of the organization, the security related feature will play the most significant role. Similarly, security feature also helps to manage the online data and online business activities from any kind of data hack or fraud. Otherwise, hacking or any kind of the data leakage may affect the profitability and brand value of the organization. To ensure the security of the data, the feature related to the backup should be also there, which will help to develop data during any system default. On the other hand, the internet connective feature will allow the management of the organization to collect information from different department directly that will also help to reduce the involvement of the time in the data analysis and respective decision making. Hence, the system should have th e feature related to internet connectivity that will also allow B Bakery to grow the business without considering any kind of financial loss due to the online transactions. Integration and Analysis of data: The main aim behind the use of accounting software is the analysis of financial data and its reporting to the management of the organization. Therefore, the software should have the feature related to data analysis that can be performed monthly, quarterly, half yearly and yearly. Through the help of this, the management may predict the possible future of the organization (Genevieve-Gold Flight, 2013). This feature will also help to make the decision to solve the issues related to performance of the organization that will also help to keep competitive advantages. Features of Evaluation and Reporting: The system related to accounting should also have a feature related to evaluation and reporting, which may help B Bakers to make regular analysis of the performance of human resource, efficiency of the involved machinery and asset during the requirement. These features in accounting system will also allow the organization to make control on each operation to ensure expectable outcomes only. These features may help to put eyes on every department of B Bakery and find out the main reasons behind the lack of the performance. Vendors and available Accounting Software There are several three main suppliers of accounting software. The entire information related to the accounting software can be taken from the website of companies. There are three main categories of the accounting software. Low category software facilitates the business organizations to perform some functions of the accounting only (Deshmukh, 2006). These functions can be development of reports, manage and maintain the company accounts, and data recording only for one market. On the other hand, medium category software is costly that allow the companies to calculate financial transactions from market to market. The medium accounting software provides the information to management with data representation to reduce any communication gap. The high end accounting software is generally known as ERP (Enterprises Resource Planning), which helps the organization to conduct multifunction at a time (Deshmukh, 2006). Hence, this software is most effective for the organizations, which have lar ge or medium structure. But ERP based accounting software needs huge money and time to ensure the successful implementation (Cooper, Funnell Lee, 2012). This type of software has a complex nature that requires training to employees, while middle and low accounting software is users friendly, which does not need expert training (Deshmukh, 2006). Analysis of B Bakers describes that this organization has medium level organizational structure but has money to make investment to implement accounting software. Therefore, the medium size category of the accounting software will be effective for the small size organization. This is because this type of software will not need huge money or human resource and anyone from the organization can use it anytime (Curtis, 2010). Medium category software will also help the organization to know the performance of each department through the report related to each department (Deshmukh, 2006). Hence, it can help B Bakers to reduce the operational cost of the organization and make a positive impact on its competency level against the competitors. Comparison between Two Accounting Software There is two accounting software in the middle category, which are most popular. Following is the comparison between two accounting software to help for the selection of a right vendor to B Bakers. Functionalities Vendors MYOB Xero System related Functions Size of Business Medium and small Small, medium and large Support of Operating System Support OSX, and Windows Along OSX and Windows, Linux also supports User Interface Stand alone (requires installations ) Web based System update Manual Automatic System backup Any time Limitation of 10 days E-commerce supports Not Available (Needs add-on programs) Available Management related Functions Invoice and Billing Purchase order data Automatic billing Format of report Standard Format Uses standard format Forecasting analysis Facility Available Facility Available Payroll analysis function Less features More features Calculation of tax Automatic Automatic Integration of collected Data Available Available Management of Inventory Advanced functions to manage inventory related activities Basic features for the management of inventory only Customer related functions Security Low measures for security High measures of data security Support to customers Available to customers through phone and internet Available to customers through phone and internet Management of Accounts Possible in single currency Possible in multiple currency Bank Reconciliation Facility Available Facility Available Multi-browsing Facility Unavailable Facility Available Mobile App for accounting activities Provided by company after purchasing license Provided by company after purchasing license Price of Software Respectively high Respectively low As per the above comparison, it can be stated that there are several similarities and difference between both accounting software. But some differences such as the price; customer services, operating system supports are some functions that help to choose Xero rather than MYOB. This is because the XERO will provide best customers services after the implementation within low price, while MYOB will provide the similar service to users after paying a high cost (Smith, 2012). Suitable Accounting Software for Bakery Business The business of Bakery does not include a large business structure. Therefore the selection of effective accounting software can depend on the following features: For B Bakers, Xero can be effective software because it will not need huge money and not increase the cost of end products while MYOB may increase the cost of product (Smith, 2012). Therefore, MYOB cannot be selected for Bakery business. Through the help of Xero, the management of B Bakers can integrate the information related to accounts from different departments, which will be used to make automatic tax calculation. As a result, the organization may know about the overall profits made by the organization in a more significant way without making any human error (Sale, 2003). Cost of product and quality is the most important terms for the bakery business. Through the use of Xero, the organization may monitor the performance of operation management through regular analysis of the financial activities (Smith, 2015). Hence, poor quality can be recognized by the organization timely that will make only positive impacts on the decision making related to changes in the quality related aspects. B Bakers wants to expand the business activities; therefore, the regular analysis of sales will be required. In this context, Xero has an automatic update of the system that will help the organization to get real time data related to sales to make further decisions (Smith, 2015). In this context, MYOB is not automatically updated character (Digital First Pty Ltd, 2016). Hence, it cannot be helpful for the bakery organization. Due to the small size of organizational structure, the payroll feature of Xero will also help B Bakers to appraise the employee's performance effectively that will help in making future decision related to business expansions. For bakery, regular sales are most important due to the nature of products. In this context, Xero is appropriate accounting software because it provides the secured e-commerce facility which can serve to conduct online transactions (Smith, 2015). Therefore, it can be possible to conclude that Xero accounting software is most preferable accounting software, which can help B Bakery to conduct the bakery business effectively. Conclusion As per above discussion, it can be concluded that the management of B Bakers should make the investment to implement accounting software "Xero" to get information and make operation and strategic decisions. 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