Accounting Information System plays a crucial role in tracking the financial activities and information of the companies in an effective and systematic way (Romney and Steinbart 2012). It can be seen that extreme competition is one of the prime characteristics of the modern business environment. In order to cope up with this competitive business environment, it is essential for the business organizations for the adoption of various advanced technologies in order to get the necessary competitive advantage (Soudani 2012). The main motive of this report is to analyze and evaluate the importance and needs for an efficient accounting information system for B Bakery. From the provided case study, it can be seen that the B Bakery has not adopted the automated accounting information system as the firm is still using manual for of accounting systems. In various part of this report, the importance and usefulness of various accounting information are discussed in respect to B Bakery. In addition, various suggestions are also provided to the company for the adoption of effective accounting information system.
From the provided information, it can be seen that the main business process of B Bakery is to produce and supply breads and various confectionary products to different businesses, supermarket and pub-chains. Thus, it can be seen that B Bakery is mainly a bakery firm. The owner of a bakery company is known as baker. In more specific words, baker refers to the person who produces various types of breads and cakes with the help of heated sources and supplies them to various businesses. On the other hand, bakers refers to the particular place where a baker produces and sells his/her produces breads and cakes. There is not any exception of this fact in case of B Bakery as the firm has to carry different business processes and activities. The follow section provides the description of various business activities of B Bakery:
Bakery Products Production: From the provided information, it can be seen that the main business operation of this company is dealing with the production of various types of bakery products. There is a Unique Selling Proposition (USP) can be seen for the company. As per the provided case study, it is prominent that the firm put large emphasis on the health related factors in their bakery products. For this reason, B Bakery produces healthy bakery products for their customers. This can be considered as the USP of the company.
To Conduct the Business in Manual Basis: As per the case study, it can be seen that B Bakery has been carrying out their business activities on the manual basis. From this, it can be understood that B Bakery uses to record all the financial and non-financial transaction of the company on the manual basis rather than using an advances technical accounting system. This can be done with the help of various technologically advanced accounting software. The continuation of manual accounting system can be identified as one of the major drawbacks of B Bakery as the company has failed to adopt any ERP system.
Distribution of Product: According to the provided information, it can be seen that distribution of produced bakery products is another major business operation of B Bakery. From this, it can be understood that there is a separate business unit of B Bakery in the organization for managing the process of product distribution. In this regard, it can be observed that B Bakery has made collaboration with different types of distribution channels in order to sell their products. Some of the major adopted distribution channel is supermarket chains, pub-chains and others.
Ineffective Management of Human Resource: From the provided case study, it can be seen that the employee base of B Bakery is 70. B Bakery uses to manage the salary process of their employees in manual basis. From this, it can be observed that there is a lack of effective computerized system for the processing of salaries for the employee in B Bakery. This manual process affects the accounts department of the company along with the employees. Thus, from the above discussion, it can be understood that lack of effective accounting information system is affection various aspects of the business activities of B Bakery.
Development of Business Requirements
The provided case study depicts the success of B Bakery in making good amount of turnover. However, one cannot ignore the fact that the business operation of B Bakery is going to be affected in the near future due to the adoption of accounting processes on the manual basis (Laudon and Laudon 2016). The following discussion suggests some business activities for making the business operations of B Bakery smooth.
Pay-roll System with Automated Accounting Software: In present, it can be seen that B Bakery has adopted manual system for the processing and payment of salaries for their employees. As B Bakery is considered as one of the major growing firms, it is of utmost important for them to implement an effective structure for employee pay roll that will be automated. This will help the company in crediting the salaries of their employees (Hall 2012).
Analysis of Cost Difference of Outflow and Inflow Activities: As per the earlier discussion, B Bakery is a growing organization and thus, it is crucial for them to make classification of different kinds of cost in the manufacturing and production process of the company. Apart from this, it is essential for the business organization to reduce the level of costs in different segments so that secure future of the business can be sustained. Al these can only be possible with the help technologically advanced accounting software (Kne?evi?, Stankovi? and Tepavac 2012).
Determination of Cost of Production: It is essential for B Bakery to implement such business process that will assists the company in the determination of cost of production or cost of goods sold. With the help of the proposed process, the firm will be able to determine the costs of raw materials along with the cost of finished goods. This is not possible in B Bakery in the presence of manual accounting system (Dandago and Rufai 2014).
Preparation of Financial Statement and Annual Reports: It is required for every company to publish their financial statements along with annual reports in regular basis. It is one of the major indispensible parts of B Bakery in order to analyze the business processes of the company. Thus, it is required for B Bakery to implement a particular business process I order to gain competitive advantage (Simkin, Norman and Rose 2014).
Determination of Adequate Payment of Taxes: At the time of adopting the suitable accounting methods, B Bakery needs to determine the market value of that system. In addition, it is required for B Bakery to pay its various liabilities like tax and others (Jawabreh and Alrabei 2012).
In case, B Bakery becomes able to adopt the above business process suggestions, the company will be able to attain certain benefits and outcomes. They are as follows:
Control over Variables and Different Operating Costs: In case B Bakery becomes able to adopt the suggested business operations, the company will be effectively able to control the operating costs. After that, B Bakery will become able to determine the lowest and highest unit of production that will provide the company control over its variable costs. With the help of this, B Bakery will be able to adopt cost effective manufacturing system. In addition, this process will assist the company in the minimization of unit of production that causes the company higher operating cost (Demski 2013).
Effectiveness in the Preparation of Financial Statements: With the assistance of automated accounting system, B Bakery will be able to prepare error-free and effective financial statements. This process will make the company able to compare the financial results for more than one year so that effective business planning can be done (Daoud and Triki 2013).
Sales Increase: This suggested process will make the company know about the cost of production and its cost per unit. With the help of this, B Bakery will be able to develop their short-run and long run price strategy. This adopted pricing strategy will increase the sales revenue of B Bakery so that profit of the company can be increased (Tazik and Mohamed 2014).
Determination of Demand: It is required for the companied to evaluate the demand and supply of their products. Implementation of automated business process will assist B Bakery to determine the demand and supply of bakery products. For this, efficiency can be brought in the production process along with the minimization of unused inventories. From the above discussion, it can be said that B Bakery will be able to attain these above-discussed outcomes with the help of automated accounting system (Caglio and Ditillo 2012).
Determination of System Requirements
Different kinds of requirement for accounting systems can be seen in the bakery firms. Two major requirements are effective analysis and evaluation of various financial statements and documentation process of various business records related to debtors, creditors, vendors and others.
Easy Online Accounting: In the recent era, most of the business organizations are implementing the process of online accounting transactions. Thus, it is essential for B Bakery to implement such a system by which the company can get payments from the debtors and can pay the creditors. In addition, it is required for the management of B Bakery to know every important aspects of the company in order to take prompt business decisions. In addition, there is a need to bring efficiency in the inventory management of the company. All these aspects will ensure the firm’s growth. Most importantly, it is needed for B Bakery to secure the internal control system of business in order to avoid the leakage of important and confidential business information (Awerbuch and Preston 2012).
Analysis of Financial Statements: Different types of automated accounting systems are required for B Bakery for the recording and reporting of financial transactions. In this regard, the suggested accounting software for B Bakery are DacEasy, MYOB and others. As B Bakery does not have any automated accounting software in present, the use of these systems will ensure the future success of the company. In addition, in order to keep the track of all financial transactions on the daily basis, these accounting systems play a crucial role. Most importantly, business organizations need to implement such accounting system that is secure from external threats. It needs to be done as the internal system of the companies can only access these accounting systems (Melnyk et al. 2014).
Documentation of Different Records: It is prominent that all the large scale as well as small scale business organizations need to be involved in different types of financial as well as non-financial transactions. Accounting transactions are the part of these transactions and all these transactions have equal importance for the business activities. For this reason, it is essential for B Bakery to implement efficient accounting software in order to record the financial and accounting transactions on the daily basis. In addition, there is a need for accounting transactions over the years in order to measure the financial performance of the company. Most importantly, B Bakery needs to make a comparison of the accounting and financial transactions with its competitors. For all these reason, it is required for B Bakery to record all the transactions related to debtors, creditors, distributors, vendors and others. Thus, it is required to install automated accounting system in order to keep all these records (Stair and Reynolds 2013).
Different Types of Cost Analysis: It is needed for B Bakery to implement effective automated accounting software so that different kinds of costs can be analyzed on a daily basis. For this purpose, the preparation of effective cost-sheet reports is required for the company. B Bakery can present all these reports to their vendors as they include all the information. Apart from this, these cost-sheets also include all the details and transactions related to the salary of the employees with the help of electronic transactions (Ram, Corkindale and Wu 2013).
As per the above discussion, these requirements B Bakery needs to be mentioned at the time of the implementation of selection of accounting software. Thus, B Bakery needs to implement all these requirements in order to achieve the short term as well as long-term goals of the company.
Selection of Software
As per the business requirements of B Bakery, the following accounting software will be suitable for their business operations. B Bakery can select any of them based on their business requirements.
Low End Accounting Software: Low end accounting software is suitable for the types of companies that have simple as well as less numbers of business transactions. The use of this kind of software can be seen among different professionals like doctors, lawyers and others. Very few companies use this software as cannot recode large number of complex transactions (Zairi 2012).
Medium End Accounting Software: Companies use this software for meeting the basis financial as well as accounting transactions requirements. This accounting software covers all the primary financial and accounting transactions of the companies. In addition, small and medium size business organizations use this software for the preparation of various financial reports and it supports the double entry accounting system. Thus, many small and medium size companies use this software.
High End Accounting Software: Companies use high end accounting software for the recording of large number of complex accounting transactions. For this reason, the big and multinational companies use this type of accounting software. This kind of accounting software can record large accounting transactions they are made with advanced technology. All these unique features of this accounting software make it more expensive in implementation for the companies and thus, small and medium size companies cannot afford the implementation of this software (Zairi 2012).
Based on the above discussion, it can be said that medium end and high accounting software will be suitable for the business operations of B Bakery. From the provide case study, it can be seen that B Bakery has the financial capacity for the implementation of both medium end and high end accounting software.
Selection of Vendor
B Bakery has the option to adopt various accounting software and they are DacEasy, Xero, MYOB and others. Thus, it is essential for the firm to make a comparison between this software before the implementation decision. The comparison can be conducted based on some specific aspects like capacity of transactions recording and documentation, payroll structure, exposes, risk, sustainability, time scheduling and others. Thus, the bases of comparison are as follows:
Credibility of Recording and Documentation: One of the major features of MYOB is its capability to record adequate numbers of data in the accounting system. In addition, MYOB is able to generate quick result or output when the users put in it (myob.com 2017). This process is done with the help of a specific button that can be seen in every page of the system. On the other hand, a use of index can be seen in case of DacEasy in order to find necessary information (sage.com 2017). Thus, with the use of different processes both MYOB and DacEasy can record large amount of information.
Operating Expenses: The classification of the operating and implementation cost of these two software can be done from medium to high. Single version of this software comes with less cost where multiple version of this software is more expensive. Thus, the firms need to take decagons on the secretion of accounting software for their business activities.
Payment of Employees of the Company: In case of the payment structure for the employee, differences can be seen among MYOB, Xero and DacEasy. At the time to deposit the salary directly to the employees, it is useful to use DacEasy (sage.com 2017). In addition, this software plays an important role for detecting the tax liabilities. In case of automatic bank reconciliation, Xero plays an important role. The usefulness of MYOB can be seen in the creation of different alternatives for the salaries and taxes of the employees (myob.com 2017).
Risk and Uncertainty: One common and crucial characteristic of all these three accounting systems is that all of them are error free and they can depend on the capability of the companies. Before the handling of these systems, it is required for B Bakery to specialize themselves.
Time and Complexities Scheduling: XERO provides assistance in easy online transactions, but the initial process is full of complexities (xero.com 2017). On the other hand, DacEasy provides assistance in case of the simple operations. However, drawbacks can be seen for DacEasy related to presentation of toolbars (sage.com 2017). However, at the billing time, this software produces speedy reports. MYOB is easy accessible as people having basic computer and accounting knowledge can operate this software. At the time of creating the bills of credit terms, MYOB plays an important part. Firms having many credit transactions can enjoy benefits (myob.com 2017).
Flexibility: As XERO operates on the third party payroll, it can be considered as flexible (xero.com 2017). In addition, it helps the companies by providing free trail trainings. In case of DacEasy, the capacity of this software is the production of fifty reports and thus, it cannot be considered as flexible. At the same time, MYOB is considered as highly flexible as it is able to generate more than 175 reports (myob.com 2017). These reports provide assistance in tracking data related to the debtors, creditors, vendors and others transactions.
Sundry Creditors and Debtors: In case of the billing process of creditors and debtors, MYOB helps the organizations by supporting e-payments and e-receipts (myob.com 2017). The main operation of DacEasy is to print cheques and to calculate the purchase quotes (sage.com 2017). In case of XERO, it helps the purchase order creation and claiming them for the creditors.
It is required for B Bakery to choose the suitable accounting package that will help the company to active its target. It is not possible for B Bakery to spend a lot of money for the implementation of appropriate accounting package, as B Bakery is a family-owned business. In addition, for the ease of implementation, the selected accounting software needs to be simple. Thus, based on the above discussion, it can be said that the both XERO and MYOB suits the business requirements of B Bakery. In addition, it needs to be mentioned that MYOB is more suitable for the business operations of B Bakery as it has the capacity to generate wide range of reports for their various business operations. In addition, MYOB provides great assistance to the company in the dealing of credit transactions. Since distribution can be seen in the business operations of B Bakery, the credit function of MYOB suits the business operations of B Bakery (myob.com 2017).
Not all these unique features are present in other accounting software like DacEasy, XERO and others. In the programming of MYOB, a two-way transfer facility can be seen and this particular facility is also missing in the other accounting software. The programming of ZERO supports the automatic calculation of bank reconciliation statements (xero.com 2017). It needs to be mentioned that MYOB helps the business organizations in the calculation of inventories under both LIFO and FIFO methods (myob.com 2017). This feature is not present in XERO. Transactions related to accounts receivable can be managed with the help of XERO (xero.com 2017). However, MYOB has the ability for the management of both accounts receivables and payables. With the help of the large reports generated by MYOB, B Bakery can take their business operations in the next level. It is also expected that the security system regarding the accounting information can become improved with the help of this software as systematic information can be generated from this system.
From the above discussion, it can be seen that MYOB has more flexibility in compared to the other software and it has more unique features that supports the business operations of B Bakery. Thus, based on the above discussion, it can be said that the implementation of MYOB will be suitable for the business operations of B Bakery and it will help to increase the efficiency of the business operations of B Bakery.
Based on the above discussion, it is clear that the every business organization wants to take their business on the next level. In case of B Bakery, the organization will be effective and successful in case the company implements the accounting software MYOB in the successful manner. With the help of MYOB, B Bakery will be able to overcome its security related issues. In addition, B Bakery will be able to access the invoices of their customers. With the assistance of MYOB, B Bakery will become able to analyze and evaluate financial reports over the years and the company will be able to implement effective pricing strategies. All these above-discussed factors will help in the increase of profitability and revenues of B Bakery so that they can take their business in the next level.
Awerbuch, S. and Preston, A. eds., 2012. The virtual utility: Accounting, technology & competitive aspects of the emerging industry (Vol. 26). Springer Science & Business Media.
Caglio, A. and Ditillo, A., 2012. Opening the black box of management accounting information exchanges in buyer–supplier relationships. Management Accounting Research, 23(2), pp.61-78.
Dandago, K.I. and Rufai, A.S., 2014. Information technology and accounting information system in the nigerian banking industry. Asian Economic and Financial Review, 4(5), pp.655-670.
Daoud, H. and Triki, M., 2013. Accounting information systems in an ERP environment and Tunisian firm performance.
Demski, J., 2013. Managerial uses of accounting information. Springer Science & Business Media.
Hall, J.A., 2012. Accounting information systems. Cengage Learning.
Jawabreh, O.A. and Alrabei, A.M., 2012. The Impact of Accounting Information System in Planning, Controlling and Decision-Making Processes in Jodhpur Hotels. Asian Journal of Finance & Accounting, 4(1), pp.173-188.
Kne?evi?, S., Stankovi?, A. and Tepavac, R., 2012. Accounting Information System as a Platform for Business and Financial Decision-Making in the Company. Management (1820-0222), (65).
Laudon, K.C. and Laudon, J.P., 2016. Management information system. Pearson Education India.
Melnyk, S.A., Bititci, U., Platts, K., Tobias, J. and Andersen, B., 2014. Is performance measurement and management fit for the future?. Management Accounting Research, 25(2), pp.173-186.
Myob.com. (2017). Accounting Software & Online Business Solutions | MYOB Australia. [online] Available at: [Accessed 31 Aug. 2017].
Ram, J., Corkindale, D. and Wu, M.L., 2013. Implementation critical success factors (CSFs) for ERP: Do they contribute to implementation success and post-implementation performance?. International Journal of Production Economics, 144(1), pp.157-174.
Romney, M.B. and Steinbart, P.J., 2012. Accounting information systems. Boston: Pearson.
Sage.com. (2017). Sage Daceasy | Sage US. [online] Available at: [Accessed 31 Aug. 2017].
Simkin, M.G., Norman, C.S. and Rose, J.M., 2014. Core concepts of accounting information systems. John Wiley & Sons.
Soudani, S.N., 2012. The usefulness of an accounting information system for effective organizational performance. International Journal of Economics and Finance, 4(5), p.136.
Stair, R. and Reynolds, G., 2013. Principles of information systems. Cengage Learning.
Tazik, H. and Mohamed, Z.M., 2014, February. Accounting information system effectiveness, foreign ownership and timeliness of corporate financial report. In 5th Asia-Pacific Business Research Conference (pp. 17-18).
Xero. (2017). business accounting software | Xero. [online] Available at: [Accessed 31 Aug. 2017].
Zairi, M., 2012. Measuring performance for business results. Springer Science & Business Media.