Core concepts of accounting information systems 13 by simkin norman chapter 12

Prepared by Paula Funkhouser
University of Nevada, Reno

Core Concepts of Accounting Information Systems, 13th Edition
Mark G. Simkin ● Jacob M. Rose ● Carolyn S. Norman

Accounting and
Enterprise
Software
Chapter 12

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Chapter 12:
Accounting and Enterprise Software
• Introduction
• Integrated Accounting Software
• Enterprise-Wide Information Systems
• Selecting a Software Package

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Copyright © 2015. John Wiley & Sons, Inc. All rights reserved.


Introduction
• Advances in Accounting Software
– Increasingly sophisticated and customized
– Developed into powerful and complex data collection
programs
• Enterprise Resource Planning Systems (ERP)

– Provide all accounting functions
– Interfaced with multiple functional areas of business
– Manufacturing, Sales and Distribution, HR Applications

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Copyright © 2015. John Wiley & Sons, Inc. All rights reserved.


Integrated Accounting
Software
• Function
– Process all types of accounting transactions
– Transactions affecting general and special journals

• Modules
– Organizes transaction processing in modules
– Provides links between modules
– Include Accounts Receivable, Accounts Payable, Inventory,
and Payroll

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Copyright © 2015. John Wiley & Sons, Inc. All rights reserved.


Features of Integrated Accounting
Software Programs

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Copyright © 2015. John Wiley & Sons, Inc. All rights reserved.

Small Business Accounting
Software
• Information Needs of Small Business Owners
– Cash Flows
– Evaluating Profitability

• Popular Software Packages
– Quickbooks by Intuit
– Peachtree by Sage Software

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Copyright © 2015. John Wiley & Sons, Inc. All rights reserved.


Small Business Accounting
Software
• Features of Software
– Vary by provider
– Numerous reports including financial statements and budget
reports
– Scalability
– Internet connectivity
– Cloud computing
– Ability to customize

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Copyright © 2015. John Wiley & Sons, Inc. All rights reserved.

Midrange and Large-Scale
Accounting Software
• Utilization
– Transaction processing needs grow
– Volume and complexity

• Popular Software Packages
–
–
–
–
–
–
–

Microsoft Dynamics GP
SAP Business One
Epicor
Sage software’s MAS 90, MAS 200
Everest
Made2Manage
Accpac
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Copyright © 2015. John Wiley & Sons, Inc. All rights reserved.


Midrange and Large-Scale
Accounting Software
• Cost Considerations
– Range from $2,000 to over $300,000

• Features
–
–
–
–
–

Multi-currency transactions
Currency conversions
Various modules and interfaces (CRM, HR)
Deployment options (desktop, web-browser)
Hosted solutions

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Copyright © 2015. John Wiley & Sons, Inc. All rights reserved.


Specialized Accounting
Information Systems
• Specially designed software for specific industries
– Schools, Dental Offices, Pet Retailers

• Can be designed as add-on modules for integrated
software packages
• Independent developers create programs to
interface with integrated packages

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Copyright © 2015. John Wiley & Sons, Inc. All rights reserved.

Study Break #1
Which of the following accounting software programs would
be appropriate for a small business (e.g., a sole proprietorship
with 20 employees)?
A. SAP
B. QuickBooks
C. NetSuite
D. Oracle

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Copyright © 2015. John Wiley & Sons, Inc. All rights reserved.


Study Break #2
Mid-level accounting software:
A. Can only be deployed through a server networked with
desktop computers
B. May be purchased in modules that match various business
processes
C. Will not be appropriate for a multinational company
because these programs cannot handle foreign currencies
D. Is generally inappropriate for a company operating in a
specialized industry, such as retail or not-for-profit
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Copyright © 2015. John Wiley & Sons, Inc. All rights reserved.


Enterprise-Wide Accounting

Information Systems
• Enterprise Resource Planning Systems (ERP)
– Enterprise software and Business application suites
– Integrated program with central database

• Popular Products
–
–
–
–

Microsoft Dynamics AX
SAP All-in-One
Oracle
Sage MAS 500

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Copyright © 2015. John Wiley & Sons, Inc. All rights reserved.


Enterprise System Functionality
• Basic ERP Functions
– Integration among major business processes
– Order processing and fulfillment, Manufacturing, Purchasing,
and Human Resources

• Extended ERP Systems
– Back-office functions
– Front-office functions

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Extended ERP Systems
•
•
•
•
•

Supply Chain Management (SCM)
Customer Relationship Management (CRM)
Business Intelligence Tools (BI)
Collaborative Business Partnerships
Partnership Relationship Management (PRM)

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ERP System Integration

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Supply Chain Example

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The Architecture of
Enterprise Systems

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The Architecture of Enterprise
Systems
• Systems Configurations
– Often run on company’s system
– Hosted solutions help alleviate risks

• Centralized Database
– Each data item stored once
– Prevents data redundancy
– Data immediately available to all business functions

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Copyright © 2015. John Wiley & Sons, Inc. All rights reserved.


The Architecture of Enterprise
Systems
• Application Interfaces
– Best-of-breed approach
– Enterprise application integration (EAI)

• Internet Portals
– Gateways to other web sites
– Enhances communication and productivity among
employees, customers, partners, and suppliers

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Copyright © 2015. John Wiley & Sons, Inc. All rights reserved.


Study Break #3
Which of the following is a distinguishing characteristic of an
enterprise-wide (ERP) system?
A. Must be a hosted solution
B. Multiple databases
C. Integration of business functions
D. Low cost

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Copyright © 2015. John Wiley & Sons, Inc. All rights reserved.


Study Break #4
Components of an ERP’s architecture typically include:
A. A centralized database and application interfaces
B. Internet portals and multiple databases
C. A centralized database running on a mainframe computer
D. Business intelligence and multiple databases

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Copyright © 2015. John Wiley & Sons, Inc. All rights reserved.


Business Process
Reengineering and ERPs
• ERP Integration
– Entails reengineering an organization
– Encourages conformity with best practices
• BPR Success
– Planning scope and roles
– High-level review of process
– Support from top management
– Continuous involvement of key employees

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Key Aspects of BPR Success

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Costs and Benefits
of Enterprise Systems

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Copyright © 2015. John Wiley & Sons, Inc. All rights reserved.