Discuss about the accounting software package of your Chosen Company.
The following assignment is the study of the accounting software package and the chosen company for the assignment is the “BHP Billiton”. BHP stands for Broken Hill Proprietary an Australian company. This assignment studies the organizational structure of the chosen company and related operational .The assignment further discusses about the system acquisition method of the company operation. The assignment further discusses the sale flow chart of the company and a possible fraud which is possible in the company
In the second it focuses upon the accounting software package used by the BHP Billiton and its market size. The assignment analyses the leaders in the market and finally determines the gaps and challenges which can be encountered using the accounting software and make some recommendation how software should be with the respect to described difficulties
BHP stands for BHP stands for Broken Hill Proprietary which is an Australian company. Its headquarters is in Melbourne, Australia. It deals in multinational mining activities. Founded in the year 1885 it was considered as the largest mining company in the year 2015 among the all mining companies in the world(Romney and Steinbart 2012).. It is the fourth largest company in the Australia. According to the financial report of the 2016 the BHP company has earner the revenue over thirty billion dollars and the profit earned by the company was over six billion. It is the listed in the stock market under the name with “BLT” with its share value over 1351 GBX(Lodhia and Martin 2014). The company operates in over 25 countries employing over forty thousand people. It main production is copper, petroleum, coal and iron ore.
Organizational structure of the company
The organization structure of the company implies that the whole organization is controlled and managed by the board member of the company (de Villiers and Alexander 2014). They are controlling the risk and audit committee, sustainability committee, nominal committee and the remuneration committee. The board members are also controlling the chief executive officer of the company and the CEO is responsible to present all the accountability of the company.Figure 1: Organizational structure of the BHP
(Source: de Villiers and Alexander 2014, pp-198)
Operational problems with the organizational structure
BHP Billiton is the fourth largest company in Australia therefore to manage such a huge organization and devise an organization structure which can maximize the profit for the company. Here are the few challenges that the company face in its operation.
The organizational structure
The organizational structure as discussed above shows that the CEO of the company is entangled to the board member and his only role is to present the financial report to the company(Grant et al 2014). If the CEO wants to make changes in the production he has to persuade all the board members for his decision. If the board member fined these challenges risky then they will reject the plan (Ghaffour, Missimer and Amy 2013). Thus the organizational structure prevents the CEO to bring any innovative changes.
The resources availability
Resources availability is the major concern for all industry and to utilize them properly is the great challenge for them. The major resource required for BHP Billiton in the mining field is the water. The company operates over 25 countries and may face water shortage in that area. Therefore to design an effective model plan for management of the major resources like water is the prime motive of the company. The better drainage of the acid mine knows as the AMD is other concern of the company.
The innovation in the business
The organizational structure of the company offers minimum innovation in its business as the CEO of the company is bounded by the Board members decision(WANG and FAN 2012). Timely innovation in the business is the crucial to adapt to the changing demand of the customers
The fluctuation of the price in the international market
The price of the product fluctuates acceding to the changes in the international market which can be positive or negative(Floris, Grant and Cutcher 2013). The negative impact on the market hampers the desired target of the company. The change in the market is not going to be stable therefore to work in that environment and produce the desired profit from it is the huge challenge for the company.
System Acquisition method
The system acquisition method is the method through which business can effectively manage its operation. BHP Billiton is the multinational mining company thus the prefer System Acquisition method for this company is the commercial software. According to the news channel “IT News” the company has bought a software which is cloud based, the name of the software is Loc8 developed the firm in Melbourne which is entrusted with the work to manage the business operation of the company(YANG, YANG and DENG 2012). The ERP of the BHP named as “1SAP”.
System flowchart of the sales procedures for the BHP Billiton
Figure 2: The production of the metal worldwide of the BHP Billiton Company.
(Source: de Villiers and Alexander 2014 pp-212)
Sales are very crucial for the company as through this they will earn the revenue. To have efficient sales flowchart is great challenge for any company, a good sale flowchart will increase the sale of the company(Andzulis, Panagopoulos and Rapp 2012). The above diagram shows the production of the metal worldwide of the BHP Billiton Company. Below is the sales flowchart of the company.
Figure 3: The sales process model
(Source: Teittinen, Pellinen and J?rvenp?? 2013, pp-298)
The sales flowchart shows that the firstly the company will send the quotation which will contain the entire product and its current price. At the second phase if the customer is satisfied with terms and condition of the contract and like the price and agrees to buy the product then he will sign the contract or else the deal will be terminated (Hatley and Pirbhai 2013). After the contract is signed the company will check for the stock if the stock is enough after receiving the payment the product will be shipped. If the stock is enough then it will arrange the product and ship the product.
Problems in the system and the sorts of fraud are possible in this system
Operating and managing a huge company is a challenging task. With numerous operations running simultaneously (Hipgrave 2013). It is evident that some problem is going to arise in managing the operation.
Firstly the company is using the cloud based software to store its data and managing it, so these are data vulnerable to the cyber attack or cybercrime if there is not a strong firewall to protect the data (Lei and Ghorbani 2012). Therefore the company has to regularly update its firewall to protect from the data theft.
Secondly the company is operating its supply chain at the global level thus the data of the company are not secure and easily be hacked. The hackers mainly target these companies as they work with the government so their data are very confidential and valuable which can cost huge loss to the company and country.
The possible fraud in the company can be in terms of its product as the coal and other metals are very valuable and have a huge demand in the market (Mirzoev and Lyubartsev 2013). Thus the employees of the company can sell the products to the private buyers at lower price by bribing the employee. Thus it can be huge loss to the company.
Accounting Software packages
The accounting software package is the type of the software which is designed to manage the accounting operation of a company like finance of the company, transaction, inventory. The accounting software can be used either for the persona use or for the business purpose.
The accounting software used by the company BHP Billiton is XBRL. The full form of XBRL is extensible Business Reporting Language (Simkin ,Norman and Rose 2014). The software has been designed to work with an excel software that has helped in delivering the accounts transaction to the client easily (Romney and Steinbart 2012). The software can be used with the basic Microsoft office version.
The BHP Billiton has been considered as the largest mining company in the year 2015. . The company operates in over 25 countries employing over forty thousand people. The current revenue of the coma pay is over 31 billion dollars with the profit over six billion in the year 2016 (Tr?by and Paulus 2012). Below diagram shows the market growth of the company.
Figure 3:The market capitalization of the BHP till August 2017
(Source: Hipgrave 2013, pp-7)
The market capitalization of the company has crossed over 108 billion dollars in the year 2016.
Leader in the market
In the year 2017 at the quarter 1the top mining company in the international market is occupied by the BHP Billiton having revenues over 200 billion dollars from the industrial and mining activity in the year 2017 The company is regarded as the largest producer of the Copper metal. The second place is taken by Rio Toronto with its revenue over 68 billion dollars.
Figure 4: The position of BHP Billiton in the year 2017
(Source: Tr?by and Paulus 2012, pp-56)
The above figure shows the position of BHP Billiton in the year 2017.
Gaps and challenges for the software:
There are various advantages of using accounting software but there are still some issue faced by the software. Followingare:
- As the accounting software stores data online it needs to have a strong firewall to protect its data from cybercrime.
- The software may not be compatible with the software used in the company(Teittinen, Pellinen and J?rvenp?? 2013).
- The accounting software is not user friendly as it has complex functions which are difficult to operate.
Thus analyzing all the difficulties the company needs to design the software which is compatible, have strong firewall and easy to use by the user.
From the report it can be concluded that the according to the financial reports the company BHP Billiton has been calculated as the fourth largest company in the Australia and one of the largest mining company in the year 2017 in the world. The organizational structure of company is analyzed timely and to develop an effective organization structure which has enabled to be on the top in the mining market. The accounting software has huge applications in the industry to maintain the accounts transaction but it has shown certain disadvantages. The company needs to analyze these issues to remain at the top of the market
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