Problem:
Management at Kudler Fine Foods has reviewed the flowchart(s) prepared and is requesting information on controls that will be required.
o Prepare at least a 750 word brief (i'll need to add more)in which you:
- Analyze the risks in the systems which your team analyzed (BELOW)
- Identify all risks and internal control points by incorporating the controls and risks into the flowchart(s)
- Design internal controls to mitigate risks to the systems
- Evaluate the application of internal controls to the systems
- Discuss other controls which may be needed by Kudler Fine Foods outside the system.
- Use at least 2 non-textbook sources
Accounting Information System Improvements for Kudler Fine Foods
The team has made the decision to purchase industry specific software from Counter Point. The benefits of industry specific software are lower cost, quicker implementation, and knowledgeable training. Included in the software are Point of Sale, Inventory Control, Customer Management, Purchasing, Reporting, Accounting, and an option for E-Commerce that the company may consider. In addition to the industry specific software, the team suggests an Acuprint time clock for accurate payroll.
The areas of improvement for payroll are with the time clocks and reporting of the records to human resources and accounting. An employee must clock in to an electric time clock that will send the data to server that creates a time card report on each employee. At the end of the pay period, management signs off on each employee's time and prints data into paychecks signed by the treasurer. The accounts payable system runs quite smoothly with the exception of cash on delivery (COD) transactions. By implementing a petty cash bag kept by management, it would reduce the hassle that employees, management, and vendors have to go through on COD transactions.
Similar to accounts payable, accounts receivable is straightforward. Most transactions occur by point of sale (POS), meaning when a customer takes merchandise from the store, it is paid for by cash or credit card immediately. On occasion, with approval from management, a customer can charge the merchandise to an in store account. When this happens, the company sends invoice to the customer. Later, the company deposits the money in the bank. The inventory system poses the biggest expense to the company. In addition, when inventory is too low and out of stock, it causes the company sales. To combat this problem, the company should implement a low and too high inventory alert system. This will help the company to meet heir 95% stock level goal.
Flow Charts of the Four Accounting Systems Analyzed
The Value the Recommended Changes Add to the Four Accounting Systems
The recommended changes, such as implementing industry specific software, and using electronic system that tracks inventory, account payables and receivables would provide a secure, reliable, and effective way to track raw materials from the point of replenishment, to the dispatch of the finished goods, and finally through invoicing management. The changes would put the company resources, expenses, and revenue in one electronic platform accessed by the management of Kudler Company.
The new system enable the management to have real-time tracking of resources, and the ability of management to monitor cash flow from different geographical locations via an easy to navigate and secure web based portal without the need for the intermediate steps of reporting and communication. The new system would eliminate some of the procedures, in the current system that add no value to the tracking system, create time lag and cause inefficiency. The goal of the recommended changes is to ingrate payroll, account payables, account receivables, logistics, and purchasing functions. Moreover, the proposal states that as many of the paper transactions as possible will be replaced by electronic data interchange transactions (EDI) in the entire system. The replacement of the paper transactions is efficient, because the new change would not lose track transactions.
References
Apollo Group. (2004). Kudler Fine Food, Virtual Businesses Portal. Retrieved August 2, 2009, from University of Phoenix, ACC542 - Accounting Information System Website, r-Materials.
Accuprint. (2009). Retrieved August 8, 2009, from Time Clock Eshop.com
Couter Point POS. (2009).