PANGASINAN

STATE
UNIVERSITY Project Overview18
ALAMINOS CITY CAMPUS

Chapter 1

PROJECT OVERVIEW

Background of the Study

An important factor in a business operation is the

dynamic relationship between sales and inventory.

Originally, in the era before computers, sales were tracked

with counter ledgers, or later on, mechanically issued

receipts from typical cash registers. Inventories had their

own ledger book, meaning that the two systems were entirely

separated out of necessity.

With the help of modern technology, the job of managing

and recording sales transactions and inventory are now

combined in one system. This type of technology is called

the Point-of-Sale System. Point-of-sale (POS) in a macro

perspective refers to the process of managing and

documenting the selling of products to customers. In a micro

perspective, it is the mechanical or computerized technology

which handles the said process. Through the use of Point-of-

Sale systems during sales transactions, the update of

inventory records is automatically taking place. Better

still, a business establishments can get much more

information about the sales. And by running reports based on

this information, business operators can make better

decisions about ordering and merchandising products.

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According to an international business finance

journalist Jeff Wourio, all veteran retailers are familiar

with the problems such as inventory which doesnt match

tallies, sales being un-recorded, and staffs are spending

far too much time chasing mistakes instead of tending to

customers. Traditionally, a sales invoice receipt serves as

the only source document that provides a record for each

sale. For control purposes, sales invoices are sequentially

pre-numbered to help the accounting department determine the

disposition of every invoice. In accordance with the revenue

recognition principle, sales revenue is recognized when a

customer receives title to the merchandise, regardless of

when the money changes hands. However, if merchandise is

shipped to the customer, a delivery receipt or shipping

document is matched with the invoice to prove that the

merchandise has been obtained by the customer.

In-spite of the credibility and of the manual sales

documents and records, it is difficult to track since it

takes time to find old records. This shall often lead to

hard collection of payments from customers and to keep track

on paper invoices can be error-prone and costly. It is also

important to consider that the risk of making duplicate

sales records or missing others completely is critical

especially for service type businesses.

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In terms of calculations, always depending on human

hands tend to make more mistakes. This is the reason why

sales calculations are now done on computer application

software such as Electronic Spread-Sheets. But relying on

this electronic tool still leads to series of disadvantages

when used in business operations. These spreadsheet errors

have caused many business owners a lot of grief. Trade

Gecko, a developer of online Inventory and Order Management

software, found that 90% of whole-sellers and distributors

use spreadsheets to manage inventory, orders, sales,

customer data, and other business data. The survey

respondents reported that they were dissatisfied with the

efficiency of the process. These companies were probably

making numerous errors in key business processes from the

heavy reliance on these spreadsheets. Trade Gecko points out

that while spreadsheets may work fine in the short-term,

there are also long-term inefficiencies in using

spreadsheets that a business will have to deal with,

especially as the business grows larger and more complex.

EarthStone Floor Center Incorporated Alaminos City

Branch is a legitimate dealer of its umbrella company Floor

Center which is selling construction products specifically

ceramics and granites. The establishment started its

operations in the City of Alaminos since year 2009. This

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business establishment is currently using manual processing

in terms of point-of-sale and issuance of sales invoice

receipt. Electronic spreadsheet is being used for

calculating sales and generating reports. Monitoring of

inventory is done in a separate and manual system which

causes difficulties on their operations.

These issues led the proponents on creating a Computer-

Based Point-of-Sale system to enhance the traditional sales

transactions, record-keeping, computations, inventory

managements, and to provide innovations through

incorporating a well customized, functional interface, and

organized database to manage sales records, calculations,

generation of receipts and reports, and dynamic inventory

updates in each sale transactions. Through this; improved

organization of records, up to date inventory, and more

accurate calculations and report generations shall be

catered by the business establishment which will give

further benefits in terms of productivity on their

operations.

Statement of the Problem

The proponents aimed to create a computer-based Point-

of-Sale System (POS) for Earth Stone Floor Center

Incorporated Alaminos City Branch.

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To attain this, the study sought to answer the

following questions.

1. What are the processes in the existing point-of-

sale system of Earthstone Floor Center Alaminos City branch?

2. What are the difficulties encountered in the

existing processes on point-of-sale system of EarthStone

Floor Center Alaminos City branch?

3. What are the features to be developed for the

proposed system?

4. What is the acceptance level of the proposed

system in terms of:

a. completeness,

b. accuracy,

c. reliability,

d. timeliness; and

e. security?

Objectives of the Study

The proponents aimed to create a computer-based Point-

of-Sale System (POS) for Earth Stone Floor Center

Incorporated Alaminos City Branch.

With these; the objectives are specifically addressed

in the following;
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1. To identify the processes in the existing point-

of-sale system of EarthStone Floor Center Alaminos City

branch.

2. To identify the difficulties encountered in the

existing processes of point-of-sale system of EarthStone

Floor Center Alaminos City branch.

3. To identify the features to be developed for the

proposed system?

4. To identify the acceptance level of the proposed

system in terms of:

a. completeness,

b. accuracy,

c. reliability,

d. timeliness; and

e. security.

Importance of the Study

To EarthStone Floor Center Incorporated Alaminos City

Branch. The study shall give them the benefits of being able

to attend to the demands of modernization in their business

operations.

To the Sales Representative. The study shall provide

them a less tedious and a more pleasant environment during

their sales transactions with the customers. Manual writing

on sales invoice receipts, searching of products on the

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price list and calculations will no longer be a difficult

task, thus processing during sales transactions shall become

faster.

To the Sales and Inventory Custodian. The study shall

provide them an easier, faster, and more accurate tool for

their generation of daily sales and collection reports.

To the proponents. The study shall serve as a good

training ground and will provide a better familiarity on

creating research and software development studies.

Scope and Delimitation

The study focused on the design and development of a

Computer-Based Point-of-Sale System for EarthStone Floor

Center Alaminos City Branch.

The study includes the processes on calculating and

recording the sales, terms and credits, collection for

deposit information, and quantity of inventory stocks.

The study also covered the processes of generating cash

sales invoice receipt and daily sales and collection

reports.

The study did not include the process of generating

delivery receipts, official receipts, receiving receipts and

the maintenance of the proposed System.

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Definition of Terms

Bill and Coins. This refers the definite amount of

money the customer has paid to the company.

Branch Code. This refers to the unique identification

number of a certain branch of EarthStone Floor Center Inc.

Cash Sales Invoice. This refers to the receipt which

serves as the source document for each sale.

Claims. This refers to the remaining balance of the

customer with regards to a certain sale.

Collection. This refers to the amount of money the

company has collected from the customer.

Computer-Based. This refers to the point-of-sale system

which is implemented by the use of computers.

Customer Deposits. This refers to the initial cash paid

by a customer.

Customer Deposit. This refers to initial payment of the

customer.

Daily Sales and Collection Report. This refers to the

summary report which is daily generated based on sales

transactions and collections.

Dated Checks. This refers to the bank check information

that the customer has given as payment.

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Delivery Receipt. This refers to the document which

serves as a proof that the goods being shipped have been

obtained by the expected receiver.

Gross Sales. This refers to the total amount of sales

according to the unit price and quantity of a certain

product which the customer will buy.

In-coming. This refers to the products which has been

acquired by the dealer and has been added to the inventory.

Inventory. This refers to the records of the products

the company is offering.

Item Code. This refers to the identification number of

a certain type of product.

Net Sales. This refers to the actual amount the

customer has to pay in exchange of a certain type of

product.

Official Receipt. This refers to the official document

of each sale which is honored by the Bureau of Internal

Revenue (BIR).

Out-Going. This refers to the products which have been

subtracted to the actual amount of inventory.

Point-of-Sale (POS). This refers to the physical

location where the sales transformation takes place.

Receiving Receipts. This refers to the document which

has the same purpose as the delivery receipt.

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Products. This refers the goods or products that the

company offers.

Remarks. This refers to the notes added to a certain

transaction.

Sales. This refers to the total amount of goods and the

act of counting.

Sales Discount. This refers to the amount to be

deducted to the actual unit price of a certain product and

on a certain transaction.

Sales Invoice. This refers to the itemized statement of

goods or services provided to a business partner. It

indicates the quantity and price of each product delivered.

Sales Return. Refers to the goods the customer has returned

to the company.

Stocks. This refers to the supply accumulated for

future use.

Terms and Credits. This refers to the recorded terms

and credit information owed by the customer.

Transaction. This refers to the business event that has

a monetary impact on an entity's financial statements, and

is recorded as an entry in its accounting records.