Application in Account Software

Term paper of BBA, Dept: Accounting, PUC Page 1
Chapter-1

Introductory Aspects


1.1 Introduction:

Advances in information technology (IT) have transformed many firms in professional services
industries, but perhaps none as much as those in the public accounting industry. Once a slow
paced and conservative industry, public accounting underwent tremendous changes at the turn of
the millennium, sparked largely by the rapid changes in its IT environment.

Audit software and knowledge-sharing applications are two crucial components of these
changes. Automation of audit tasks and use of specialized audit software has substituted IT for
labor and changed the structure of audit teams. Equally important is the use of advanced systems
to share knowledge bases across different parts of the organization that has enabled professional
services firms to leverage their human resources more effectively.
With rapid advances in IT, numerous articles have appeared in practitioner-oriented accounting
journals that discuss how to invest in IT to keep up with the current technology.

To justify an IT investment, managers need to understand the potential benefits resulting from
the investment. Although there is a general perception that IT investment by public accounting
firms can improve firms. Productivity, the impact of IT on firm performance is not directly
observable. Public accounting firms need to understand how the technology can transform their
work and whether such transformation will ultimately lead to productivity gain. While the recent
IT research literature documents a positive marginal contribution of incremental IT expenditure
using cross-sectional analysis across several firms, empirical evidence at the firm level has not
been reported. Longitudinal analysis before and after IT implementation is important to support a
causality argument leading from IT deployment to improvement in the firms productivity. This
is especially of interest in a public accounting firm where information utilization is the core
competence.


1.2 Objectives of the study:

General Objective:

The general objective of preparing this report is the Application of software in accounting
transformation to fulfill the requirement of the course through gaining the practical experience.

Specific Objective:

The specific objectives of the study are as follows:

Io gets a general idea about the Accounting transformation.

To study the reasons responsible for application of software in accounting.

To analyze the accounting transformation and its implementation.

1.3 Methodology:

The study has been made only by one month. I tried my best to be acquainted with all the
sections and departments of the organization.
The relevant data is collected from the secondary sources information.

Secondary Data collected from
Printing materials of Articles of various writers
Library Study
Magazine & Journal
Website


1.4 Limitation of the study:
This Research Project work was prepared carefully with full concentration to avoid any kind of
misinformation or mistakes. But still like all other research work this report may also have some
limitations. From my view, some obstacles in this report are given bellow:
Informations are not rich enough or many update data are not available in the market.
Website in different organization of Bangladesh contains poor information.
Due to lack of experience, there is a chance of having some mistake in the report though
best effort has been applied to avoid any kind of mistake.
Recent data and information on different activities was unavailable.


Chapter 2


2.1 What is Software?

Software means computer instructions or data. Anything that can be stored electronically is
software, in contrast to storage devices and display devices which are called hardware.

2.1.1 Application software:

An application is a program, or group of programs, that is designed for the end user.
Application software can be divided into two general classes: systems software and applications
software. Applications software (also called end-user programs) includes such things
as database programs, word processors, Web browsers and spreadsheets.
Figuratively speaking, applications software sits on top of systems software because it is unable
to run without the operating system and system utilities.

2.1.2 System software:
Refer to the operating system and all utility programs that manage computer resources at a low
level. Software is generally divided into systems software and applications software.
Applications software comprises programs designed for an end user, such as word
processors, database systems, and spreadsheet programs. Systems software
includes compilers, loaders, linkers, and debuggers.

2.2 Accounting Transformation:
Accounting transformations refer to the process of converting transactions or activities, referred
to as accounting events, from source systems into journal entries. Source systems may be diverse
applications. Source systems are industry specific solutions. Examples of source systems are core
banking applications, insurance policy administration systems, telecommunications billing
systems, and point of sales systems.

2.3 Accounting Transformation Flow Chart

When using the accounting transformation implementation process:
Start with an analysis of current system.
Determine which source systems have transactions or activities that need to be accounted
and reported.
Register the source system transactions and activities which have financial impact in the
Accounting Hub to make them eligible for accounting.
Create accounting rules that indicate how each of the accounting events is accounted.
Group these rules together and assign them to ledgers to create a complete definition of
the accounting treatment for the transactions and activities from the source system.
The following figure summarizes the accounting transformation process.


2.4 Accounting Software and Integrated ERP:

Gathering all financial information in one place has never been easier with accounting
software and business management solutions from Open Systems. You can import all of your
current financial and tax information into the system and begin tracking your income and
expenses immediately. Whether your business is established or you are expanding, your Open
Systems solution can be up running easily and quickly, helping you make more informed buying
and selling decisions, improve customer service, save money, and ensure profitability into the
future.

2.4.1 Real-Time Accounting Data and Business Intelligence:

The demands and new challenges facing businesses change every day. Whether you need to
reduce costs or manage compliance mandates, you need to respond quickly to changes in your
industry, all while meeting the demands of your customers. Open Systems offers you complete
ERP software with a fully integrated accounting systems - allowing you to make faster, more
knowledgeable decisions by giving you a complete view of your company in real time.

These accounting applications form the core of our accounting software solution, empowering
you with the ability to turn data into usable information and to perform effective analysis and
reporting.

Powerful and customizable reporting
Insight to capitalize on new opportunities
Adaptable applications that allow you to customize them to your business specific
needs
Maximized efficiency and productivity

Interactive dashboards for better decision making
A more affordable solution to deploy, adapt to your changing business needs, and
maintain
2.4.2 Accounting Applications:

The accounting applications are as follows:

Accounts Receivable
Accounts Payable
Accounts Receivable
Payroll
Enhanced Payroll Tax Reporting
Direct Deposit
Banking
Bank Reconciliation
Fixed Assets

Accounts Receivable
Manage your cash, know your customers, and analyze performance and trends with Accounts
Receivable. Assign active or inactive status to your customers, use drill-down functionality to
see source transactions from inquiry screens, and save time with batch processing capabilities.
With Accounts Receivables flexible cash flow management options, you will:

Evaluate your cash discounts program and spot delinquent accounts early.
Produce timely reports to identify your best customers and stay on top of sales patterns

Track every aspect of your sales and receivables in a timely manner, improve the inflow of
cash, and make the most of sales trends.

Accounts Payable
Track obligations to suppliers, control cash flow, and speed data entry with the accounting
applications in Accounts Payable. Produce a wide array of predesigned reports, and take
advantage of the flexibility to pay all invoices, prepay selected vendors, or split invoices for
payment.
With Accounts Payable helping you prioritize your payments, you can:

Save time and money with the ability to review outstanding payments by vendor and
select which payments to hold or release.

Improve your efficiency with quick entry and defaults on headers.

Manage your expenses efficiently and keep your accounts up to date with user-defined
terms, aging periods, and cutoff dates.

Assess your financial position by producing timely reports.

Accounts Receivable
Manage your cash, know your customers, and analyze performance and trends with Accounts
Receivable. Assign active or inactive status to your customers, use drill-down functionality to
see source transactions from inquiry screens, and save time with batch processing capabilities.
With Accounts Receivables flexible cash flow management options, you will:

Evaluate your cash discounts program and spot delinquent accounts early.

Produce timely reports to identify your best customers and stay on top of sales patterns.
Track every aspect of your sales and receivables in a timely manner, improve the inflow of
cash, and make the most of sales trends.

Payroll
Complete all of your payroll processing tasks with Payroll. Track hourly and salaried employee
wages, print checks, manage sick and vacation accruals, and produce timely W-2 reports.
With Payroll helping you simplify payday, you can:

Maintain detailed records with clear audit trails, and keep up to date with tax law changes.
Analyze payroll expenses and employee productivity to help control costs and review
expense distribution.
Produce detailed reports to help you plan and generate a budget.

Enhanced Payroll Tax Reporting
Use Enhanced Payroll Tax Reporting with your Payroll data to get over 300 certified state and
federal reports, along with e File capabilities. Automatically stay up to date with routinely
changing forms.
With EPTR simplifying your tax form system, you can:
Easily update, download, and install new forms automatically.
Save time while preparing and filing government reports.
Eliminate data entry by importing information directly from your financial system.

Direct Deposit
Send pay directly to employee bank accounts with Direct Deposit tied into your Payroll system.
Create deposits by dollar amounts or percentages, prepare normal paychecks for special
circumstances, and use batch processing to post multiple payrolls within a single day.
With Direct Deposit keeping employees happy, you will:

Save time by processing multiple payments per employee in one Direct Deposit run.
Manage documents by saving PDF or text versions of printed vouchers.
Create deposits by dollar amounts or percentages, with the ability to change at any time.
Enjoy improved security with Direct Deposit vouchers, the deposit documents employees
receive instead of a live paycheck; theres no chance of a paycheck being lost or stolen.
Banking
From ACH transactions to direct deposit of payroll checks, from Positive Pay support to
Magnetic Ink Character Recognition capabilities, Banking provides a total solution for secure
electronic banking.
While taking advantage of Bankings advanced features, you can:
Set up a credit card-type bank to simplify statement reconciliation; the bank tracks charges,
payments, adjustments, and transfers.
Reduce time and accounting errors by automatically clearing transactions with bank-
provided reconciliation data.
Quickly serve customers and vendors by creating and importing ACH files for delivery of
electronic payments and payments received.

Bank Reconciliation
Reconcile bank statements and general ledger accounts with Bank Reconciliation. Track an
unlimited number of bank accounts, void checks before they are sent or after they are posted, and
review total debits posted to General Ledger for each period.
When you use Bank Reconciliation to streamline your processes, you can:
Automatically create entries in General Ledger for adjustment and transfer transactions.
Define information for processing ACH payments to vendors and from customers for
streamlined, simplified processing.

Set up as many base and foreign currency bank accounts as you need, including routing
codes for electronic payments, positive pay codes, check formats and other ACH
information.
Fixed Assets
Fixed Assets gives you the power to analyze the tax and cash-flow implications of assets and
track their valuation and depreciation. Stay up to date using the provided set of IRS-supplied
depreciation tables, as well as MACRS, ACRS, straight line, sum-of-the-year digits, and
declining balance recovery method support.
With Fixed Assets helping you make capital decisions, you will:

Track the difference between estimated depreciable and actual service life and calculate the
cost or proceeds from the retirement of an asset.
Use forecasting tools to evaluate leases, amortize loans, and experiment with depreciation
strategies.
Meet tax reporting requirements with a full range of financial and management reports.

2.5 The Advantages of Using Computerized Accounting Software:

The introduction of computerized accounting systems provide major advantages such as speed
and accuracy of operation, and, perhaps most importantly, the ability to see the real-time state of
the companys financial position. In my experience I have never seen a business that has
upgraded to a computerized accounting system return to paper based accounting systems. A
typical computerized accounting package will offer a number of different facilities. These
include:

- On-screen input and printout of sales invoices
- Automatic updating of customer accounts in the sales ledger
- Recording of suppliers invoices
- Automatic updating of suppliers' accounts in the purchases ledger Recording of bank receipts

- Making payments to suppliers and for expenses
- Automatic updating of the general ledger
- Automatic adjustment of stock records
- Integration of a business database with the accounting program
- Automatic calculation of payroll and associated entries

The main advantages of a computerized accounting system are listed below:

Speed data entry onto the computer with its formatted screens and built-in databases of
customers and supplier details and stock records can be carried out far more quickly than any
manual processing.

Automatic document production fast and accurate invoices, credit notes, purchase orders,
printing statements and payroll documents are all done automatically.

Accuracy there is less room for errors as only one accounting entry is needed for each
transaction rather than two (or three) for a manual system.

Up-to-date information the accounting records are automatically updated and so account
balances (e.g. customer accounts) will always be up-to-date.

Availability of information the data is instantly available and can be made available to
different users in different locations at the same time.

Management information reports can be produced which will help management monitor and
control the business, for example the aged debtors analysis will show which customer accounts
are overdue, trial balance, trading and profit and loss account and balance sheet.

GST/VAT return the automatic creation of figures for the regular GST/VAT returns.

Legibility the onscreen and printed data should always be legible and so will avoid errors
caused by poor figures.

Efficiency better use is made of resources and time; cash flow should improve through better
debt collection and inventory control.

Staff motivation the system will require staff to be trained to use new skills, which can make
them feel more motivated. Further to this with many off-the-shelf packages like MYOB the
training can be outsourced and thus making a particular staff member less critical of business
operations.

Cost savings computerized accounting programs reduce staff time doing accounts and reduce
audit expenses as records are neat, up-to-date and accurate.

Reduce frustration management can be on top of their accounts and thus reduce stress levels
associated with what is not known.

The ability to deal in multiple currencies easily many computerized accounting packages
now allow a business to trade in multiple currencies with ease. Problems associated with
exchange rate changes are minimized.

2.6 Case Study of Application of Software in accounting
transformation in Bangladesh:

Process Automation of Postal Department of Bangladesh


Post Office is committed to provide universal access to basic postal service in the country at an
affordable price. Its objectives are to ensure availability of basic postal services in all parts of the
country, including tribal, hilly and remote areas and the role of post office is undergoing
transformation, as electronic mail and new technology supplement traditional postal activities.
Post offices are increasingly adopting new business that helps to optimize its retailing strength,
by providing a range of public utilities and new financial services that are relevant to the socio-
economic needs of Bangladesh. It is also simultaneously under process upgrading traditional
services through induction of technology and introducing new products and services in order to
meet the challenges of providing faster, more reliable and more responsive services to the
customers in the face of increasing competition from the private courier industry and continuing
advances in communication industry.

The present condition of the service delivery process of BPO is very miserable. At present, all
the activities of BPO is performed manually. As a result, customers have to form que at the
counters. Postal staffs have to prepare long lists and documentation takes a lot of time and
records relating to mail receipt, transmission and delivery and further tracking and tracing takes
huge time.

This project has four components - Web based Application S/W, Connectivity, Hardware and
Software. The proposed web based application software will have Post Office Counter
Automation, Automation of Post Office Treasury and Sub-account, Delivery System and
Performance Analysis, Accounting Information and other Information Flow Management and
Track and Tracing for registered inland and foreign articles modules, which run in LAN and
WAN. LAN configuration is required for 84 offices/locations. Each and every office need server,
computers with LCD monitor, UPS, printers, switch, AC for server room, receipt printer for
counter, table, chair, ribbon / cartage, barcode scanner and barcode label printer for capturing
barcode article number and External modem for internet connectivity. These are the minimum
Equipments & Machineries for automation of GPOs, HPOs and M&SOS.


Almost all of the countries are now using modern computer technologies for delivering services
to the customers and using this computer based technologies is saving substantial amount of man
hour in record preservation, tracking and tracing.
Against this backdrop, Bangladesh Post Office (BPO) aims at delivering modern postal services
at postal counters, postal treasury, postal mail centers, post office savings bank and postal life
insurance using customized software and modern technologies keeping abreast of the postal
services of the developed world. This project has been prepared for this purpose.

Objectives:

The objective of the proposed software is to provide state of the art software solution to help the
Postal Department for computerizing all the activities performed by a Post Office Counter as
well as back office. Specially, the aim is to:

i) To improve postal service for business and domestic customers through greater choice, better
quality and falling real prices.

ii) To equip the Post Office with technology to meet the challenges of the changing postal market
both domestically and internationally.

iii) To support viable network of post office so as to ensure nationwide access to a range of
public and private sector service.

iv) Post Office Service Charter into practice.

v) Provide high-secured network.

vi) Provide an efficient software solution based on Client/Server architecture that will reduce the
paper work considerably in the Post Office and also eliminate the superfluous data entry.

vi) to enhance tracking and tracing facilities provided by BPO.

vii) Building capacity for large data management and record keeping.

Targets:

i) To improve postal service for business and domestic customers through greater choice, better
quality and falling real prices.

ii) To equip the Post Office with technology to meet the challenges of the changing postal market
both domestically and internationally.

iii) To support viable network of post office so as to ensure nationwide access to a range of
public and private sector service.

iv) Post office Service Charter into practice.

v) Provide high-secured network.

vi) Provide an efficient software solution based on Client/Server architecture that will reduce the
paper work considerably in the Post Office and also eliminate the superfluous data entry.

vii) To enhance tracking and tracing facilities provided by BPO.

viii) Building capacity for large data management and record keeping.

Outputs/Outcomes:

After completion of the project, the following outcomes will accrue:

1. Registration time of letter and parcel mails will be reduced.
2. Service delivery process to customers will be mechanized and easier.
3. Ensuring delivery of mails to customers
4. Introduce barcode system on mails

5. Money deposited by customers at post offices will be displayed at the counters through
computer screen
6. Money deposited at postal treasury will be constantly monitored through computer
7. All the financial transactions of post offices throughout the country will be included in the
records of postal treasury, which will be monitored constantly.
8. Fraudulent actions of post offices will be prevented
9. Postal service and postal accounting will be performed efficiently for customers and for this
purpose other institutional facilities of post offices will be ensured.
10. Customers will be able to receive the service within fraction of time now taken to deliver the
service
11. The accounts of money deposited by customers as postage / fee will be preserved at the
postal treasury immediately, which will result in prevention of fraud
12. Customers will get computerized receipts
13. Where applicable, customers will get bar-coded receipts, which will enable them to track and
trace the transmission and delivery of mails from anywhere anytime.
14. Service delivery time will be reduced to one third for post office savings bank transactions
15. Frauds that occur in the presence of the conventional system will be eliminated
16. Accounts will be preserved and kept immediately at different places
17. Data will be preserved in the computer data bank, which will help generate information and
report of specific formats at any time.
18. Accounts of all Head Post Offices will be preserved in the central server through integrated
software and all accounts entered into the computers will be accessed immediately and there will
be no scope for manipulating these accounts.

Besides other facilities will be available after implementation of the project.

Chapter 3

Recommendation:
Define a maximum of five segments for a supporting reference. Assign different sources
to each segment.
Assign only one source from the same accounting event class and application to a
supporting reference segment.
Assign only supporting references with header level sources to the header level of a
journal entry rule set.
Assign supporting references with header and line level sources to the line level of a
journal entry rule set.
Select the balances option in the definition of the supporting reference, to have balances
only maintained when the supporting reference is assigned at the line level. For
supporting references for which balances are maintained, you can specify whether the
balances at the end of a fiscal year are carried forward to the next fiscal year.

Conclusion:

The coming changes to accounting will present companies with substantial business challenges.
Although there will be no real change to their economic condition, the increase in assets and
liabilities may affect some companies credit rating or require changes to loan covenants.
Recording and tracking leases will become a greater burden than before in some cases
considerably so. Therefore, it would be great if vendors could provide a low-cost, low-
maintenance application to help corporations and their finance departments manage leases,
reduce workloads and ensure accuracy.

References:
www.google.com
www.robertkugel.ventanaresearch.com
www.docs.oracle.com
www.infosys.com
www.itbusinessedge.com

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