Reports are generated to track budget versus actual performance for each department on a monthly basis, and administration (the president) is also concerned with the performance of the sales and marketing organization, both in terms of cost and revenue. Other reports that are generated for administration include payroll reports, expense reports and financial statements.
The marketing department depends on the accounting system to provide it with current information regarding which new customers have issued payment for systems, which customers have not yet paid for their product, and how sales forecasts are measuring up against actual performance. Because the company's product sells for as much as $100,000, it is generally not paid for in one installment. Instead, the company receives 30% when the contract is signed, another 30% when the software is installed, and the remaining 40% when the software has been operational for 90 days. While this is the contractual agreement, the actual payment schedule sometimes varies, with customers withholding payment of the last installment if there is trouble with the system or if they are dissatisfied for other reasons. If customers withhold payment past 30 days, they are placed on credit hold and no additional service is given to them until the issue is resolved with the accounting department.
Other users of the system include customers, who depend on the system for accurate invoices and statements, and vendors, who depend on the system to generate payment in an appropriate and timely manner.
While hardware should not be the overriding concern when purchasing an accounting system, it needs to be taken into consideration. If the company purchases software which runs on proprietary hardware, such as it currently has with its minicomputer, there is the problem of long-term usefulness. Also, information should be readily available to all users (although not all information should be available to all users). For these reasons, it is recommended that the company seek a solution that is based on a personal computer local area network (LAN).
If ABC designs and writes its own computer accounting system, it has the advantage of having the end users (the accounting staff and other interested parties) and the design team (the software developers) together in the same building. This eliminates some of the miscommunication that can result when outside vendors are used, and enhances the possibility that the company will receive a computer system that achieves both short- and long-term company goals.
Managers need to have access to information without going through cumbersome processes such as rekeying information or translating it from one format to another. Redundant procedures should be eliminated, and security should be increased in order to better protect the organization.
Training will also be required for users outside the accounting department who will be using the accounting system. These include the warehouse clerk who will be entering information into the system, and the executive secretary who will be generating spreadsheet reports based on information in the system for the president or marketing manager. The support manager should also receive training in order that he is able to generate the information that his department needs in order to better serve their customers.
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