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CHAPTER 2
2.0 Introduction
Project study is more effective and satisfying, with all the necessary documents
presented together with it. Exploring studies as well as literatures creates a more solid
proof of the main agenda of the proposed study. In this chapter studies and literatures are
presented divided into two, mainly representing the local and international. Making
differences create a new possibility for a much effective solution.
2.1 Related Literature
2.1.1 Foreign Literature
Financial Analysis on China Eastern Airline Company
According to China Eastern Airline Company's financial analysis based on its
financial report which were include the Balance sheet and Profit and loss Account of the
Company in year 2000 and 2001
The Financial Analysis was analyzed by using the types of financial analysis
methods. It is includes:
The Common Size balance sheet of the China Eastern Airline in year ended 2001 with
the analysis and explanation.
The Horizontal analysis over the Profit and Loss Account between year 2000 and
2001 with the explanation. Calculated the China Eastern Airline Company's finance
Ratios for both year 2000 and 2001.The analysis of financial indicators of China Eastern
Airline Company by from the Ratio calculation and at the same time, some of the risks
that company may face in its future business develop was also listed on the Financial
Analysis..
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At the ended of the Financial Analysis, after go through and analysis the Financial
statement of China Eastern Airline Company, the author was give some
recommendations and suggestions to the company which may help the company have
better develop and improve at the future time.
Southwest Airline Co. and Cost Accounting
Based on Southwest Airline Co. is a major passenger airline that provides
scheduled air transportation in the United States. Southwest provides point-to-point
service which allows the use of key assets, including aircrafts, gates, employees, and the
ability to provide frequent, conveniently- timed flights and low fares. Southwest Airlines
has built its culture from the inside out and believes that the satisfied employees will keep
customers coming back.
Southwest Airlines operates with a low-cost structure that is designed to allow it
to charge low airfares. With that said, cost accounting can have a pervasive influence in
this and other organizations. From the company’s 2006 annual report-Disclosure
Regarding Forward-Looking Information, Item 1A. Risk Factors; fuel price volatility
presents one of the company’s most significant challenges. Southwest for the past five
years of this annual report, has hedged its fuel risk as part of its lost cost strategy. While
this also demonstrates the use of cost accounting, the company entered into fuel
derivatives
contracts
to
protect
against
rising
fuel
costs.
Southwest Airlines uses cost accountants in contributing to the external financial reports
such as inventory valuation as noted on page 55, under Notes Consolidated Financial
Statements – (Continued) – Inventories, which consists of flight equipment expendable
parts, materials, aircraft fuel, and supplies. The cost accountant determines the valuation
method that is in the best interest of the company and favorable to the stockholder. There
is an advantage to having cost accountants, they create reports used strictly for internal
use and are not restricted to generally accepted accounting principles (GAAP).
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Financial performance measures
ACCOUNTING AND FINANCE RESEARCH UNIT
An international survey of performance
Measurement and benchmarking by airlines
Based on Airline literature measuring various aspects of financial performance is
important for airlines operating on tight margins. It is important to measure those aspects
of which are contributing to the overall performance and not just the traditional ‘bottom
line’ measure. As one of our respondents observed: ‘Airlines are by nature a strange mix
of retail and technical industries with large cost base and cash flow variations.
Performance measurement is essential in the tough low margin business environment.’ In
terms of the reported use of financial performance measures the more traditional profit
based measures were the most used and tended to be seen as useful. In particular there
was a focus on operating revenue and expenses. Profit was far more widely used than
investor ratios such as earnings per share (EPS) and price earnings ratios (P/E), whose
low uptake and usefulness can be explained by the fact that by no means the respondents
were in private ownership (46 per cent of respondents had a government stake in
ownership and 54 per cent did not).
This working paper has the following structure. In order to place our survey in
context, the next section outlines the importance of performance measurement to airlines.
This is followed by a section outlining the methods used to collect data and a section on
the demographics and non-response bias of the survey. The results of the survey are then
described and some conclusions drawn.
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2.2.2 Local Literature
CONCEPTS AND PRINCIPLES OF INTERNAL AUDIT
To complement the implementation of the National Guidelines on Internal
Control Systems (NGICS), the Philippine Government Internal Audit Manual (PGIAM)
is being issued to explain and clarify the nature and scope of internal audit in the
Philippine public sector, including its institutional arrangements, as well as its protocols
and processes. In October 2008, the Department of Budget and Management issued the
NGICS pursuant to Administrative Order No. 119
Memorandum Order No. 277 dated
dated 29 March 1989 and
17 January 1990 which directs the DBM to
promulgate the necessary rules, regulations and circulars for the strengthening \ of the
internal control systems of government agencies. Following the provisions of the
Constitution, the Government Auditing Code of the Philippines (Presidential Decree No.
1445 dated 11 June 1978, as amended), the Administrative Code of 1987 and the United
Nations Convention Against Corruption (UNCAC), the NGICS serves as a guide to the
heads of departments and agencies in designing, installing, implementing and monitoring
a strong and responsive internal control system.
In fulfilling their mandates and missions, departments and agencies must consider and
observe the general objectives of internal control, namely to:
1. Safeguard assets;
2. Check the accuracy and reliability of accounting data;
3. Ensure efficient, effective, ethical and economical operations;
4. Comply with laws and regulations; and
5. Adhere to managerial policies.
To achieve these objectives, five interrelated internal control components as enumerated
below need to be set in place:
1. Control environment;
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2. Risk assessment;
3. Control activities;
4. Information and communication; and
5. Monitoring.
While it is the direct responsibility of the agency head to install, implement and
monitor a sound system of internal control, the Internal Audit Service/Unit (IAS/IAU)
assists him/her by conducting a separate evaluation of the internal control system (ICS)
to determine if controls are well designed and properly implemented. This function of
the IAS/IAU is separate or distinct from the function of the operating units, other support
units, and their equivalent in Government-Owned and/or -Controlled
Corporations
(GOCCs) and Government Financial Institutions (GFIs), which monitor and institute
continual improvement of internal controls to support the achievement of performance
targets and organizational objectives.
From a baseline assessment of the ICS which identifies gaps or control
deficiencies, the IAS/IAU recommends an audit agenda for approval by the Department
Secretary/Head of Agency (DS/HoA) or the Governing Board/Audit Committee
(GB/AuditCom). Once approved, internal audit is conducted based on set procedures and
criteria. The results of internal audit are submitted to the DS/HoA or the GB/AuditCom
with appropriate recommendations. The PGIAM provides guidelines and protocols in the
performance of these internal audit functions.
Managerial and Financial Accounting Report
Based on this report the role of managerial accounting is increasing. These
managers have to be able to increase effectively the involvement and size of
organizations. These business managers also have to be aware of the rapid growth and
enactment of technology.
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When examining the major differences between financial and managerial
accounting, we find that with financial accounting the information is reported in
statements. The financial statements objectively and periodically report the results of past
operations and the financial condition of the business according to the Generally
Accepted Accounting Principles (GAAP) (Vallabhaneni, 2003). Examples include
shareholders, creditors, government agencies, and the public. On the other hand,
managerial accounting information includes both historical and estimated data used by
management in conducting daily operations, planning future operations, and developing
overall business strategies (Vallabhaneni, 2003).
Managerial accounting also includes information for decision-making, planning,
directing, controlling an organization's operations, and appraising its competitive
position. Managerial accounting has internal users of information. These users comprise
of business managers at all levels in the organization. Financial accounting uses external
users of information. These users include stockholders, financial analysts, lenders,
unions, consumer groups, and government agencies. This is hard data, and must meet
audit criteria to be acceptable. Managerial Accounting rules are set within the company to
carry out management objectives related to adding value to the company. Managerial
accounting data must only be relevant for management decisions.
Financial Reporting
Based on government repot the Fiscal Manager should prepare a set of monthly
financial reports for distribution to the President, and the Budget and Finance Committee.
The reports should include: a balance sheet and a statement of income and expenses for
each department (operating, project); a consolidated balance sheet and consolidated
income and expense report which show all departments combined; a budget-to-actual
report for all accounts included in the annual operating budget; a list of deferred and
receivable funds, and a cash flow projection. In addition, the monthly reports for the
quarterly periods (December, March, June, September) will be submitted to the full
board for their review and acceptance at the following board meeting.
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The monthly statements should be reviewed by the President or Vice President
prior to distribution to the Treasurer for initial comments. After the Treasurer=s approval,
the statements will be mailed to the Budget and Finance Committee every month and to
the full board as stated above. The monthly statements will be finalized by the conclusion
of the month following the statement period.
Year-End Report/Audit:
At fiscal year-end, and in time for the winter retreat of the Board of Directors, a year end
Audit report should be prepared summarizing the total income and expense activity for
the year. A balance sheet should be prepared as of September 30 and should be attached
to the income and expense report. This report will be initially reviewed by the President
and Vice President, and then by the Treasurer, prior to distribution at the annual meeting.
Bids for an independent auditor to conduct this review will be accepted between
September 1 and October 15. In accordance with XXX policy, at least three proposals
will be considered. The auditing process will begin on or about November 1.
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2.2 Related Studies
2.2.1 Foreign Studies
Management Accounting Change: A Case Study of Balanced Scorecard
Implementation in a Portuguese Service Company
Luís Pimentel
ISCTE Business School, Lisbon
Maria João Major
ISCTE Business School, Lisbon
Av. das Forças Armadas, Cacifo 105-A, 1649-026 Lisboa;
This paper presents a longitudinal case study of management accounting (MA)
change in a Portuguese service company operating within the information technology
(IT) business which has implemented the Balanced Scorecard (BSC). BSC
implementation turned out to be problematic. It took too long and faced several
difficulties and obstacles. Drawing upon Kasurinen’s (2002) revised model of accounting
change, the factors that created a potential for change (motivators, facilitators and
catalysts) and the events that seek to explain how the process of change evolved
(momentum and leadership) are identified. Furthermore, Kasurinen’s barriers to change
(confusers, frustrators and delayers) have been recognised in the study. This investigation
demonstrates how Kasurinen’s (2002) framework can help researchers to understand the
reasons and explanations as to why change occurs in organizations and the process by
which MA changes.
The process of Balanced Scorecard (BSC) implementation may be considered one
of the most common examples of MA change these days (Epstein and Manzoni, 1997;
Sousa and Rodrigues, 2002). Broadly conceived, the BSC is a tool that, if framed
properly in the organizational culture and if linked accurately to the global management
system of companies, has a high potential that surpasses its technical characteristic as a
framework for performance evaluation. The aim of this research is to contribute to the
understanding of the reasons and explanations as to why and how MA change occurs, by
analysing the advancing forces of change and the wide range of potential problems
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related to change implementation identified in a specific Portuguese IT company (called
Alpha1), in a BSC context.
STUDYING THE DIALECTICS BETWEEN AND WITHIN MANAGEMENT
PHILOSOPHY AND MANAGEMENT ACCOUNTING
Norio Sawabe
Graduate School of Economics,
Kyoto University
Sumitaka Ushio
Graduate School of Economics,
Kyoto University
Management accounting researchers have long been interested in the relationship
between organizational culture and management accounting practices (Bhimani, 1999,
2003, 2007, Ahrens, 1996, 1997, 1999). Existing literature on management accounting
and organizational culture suggest that success or failure of a management accounting
system is influenced by the cultural values held by the users of that management
accounting system. (Bhimani, 2003; Dent 1987).
One potential weakness of the existing literature is that it treats culture at a level or
domain where it is considered to be internally consistent throughout an organisation.
Even where the literature acknowledges that an organization is comprised of culturally
heterogeneous groups, groups that exhibit similar cultural orientations are analysed
collectively as a much larger group. Within the literature, it seems to be assumed that
culture is coherent within the chosen unit of analysis, and that consistency exists between
culture and management accounting practices.
The rest of the paper is structured as follows. The next section outlines our
research methods. In that section we outline how we have utilised an empirical study
based upon detailed field research at a manufacturing firm. The firm, examined in this
research, has been the subject of management accounting research since the 1990s, as a
part of the Japanese management accounting research bandwagon, due to its unique and
sophisticated management style. In the following section we review existing literature on
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the relationship between management philosophy and management accounting, and on
the management accounting system of the firm. In the next section we discuss Giddens’
structuration theory and new institutional theory, and develop a simplified model of
evolutionary institutional processes that has a focus on the inconsistencies and conflicts
in an organization. We then proceed to discuss the findings from the case site and analyse
how management philosophy and management accounting constitute each other in a
dialectic manner at the case site.
Airline Financial Analysis
Financial reports submitted to DOT are generally unaudited, but they must tie to
the airlines’ GAAP reporting. The system is a holdover from the days of complete
government regulation of the airline industry under the Civil Aeronautics Board (CAB),
which mandated an industry-wide standard for accounts and reports. With airline
deregulation and modernization of enterprise-wide accounting systems, carriers now have
a diverse array of accounting system choices. They either must have their accounting
system approved by DOT, and let DOT do the translation of their reports into Form 41
format, or they must translate their own accounting system output into DOT format
before reports are submitted. The resulting comparability across carriers makes Form 41
data widely used in finance, economics, and industry analysis and for competitive
benchmarking.
The student of finance studying airlines for the first time is learning a foreign
language; the most widely-used aviation benchmarks are different from those used in
other industries and the source of the information used to calculate those ratios is seldom
identified. For example, O’Connor’s (2001) An Introduction to Airline Economics
defines airline ratios but does not specifically discuss Form 41 data or how to get it. This
is pretty typical of the literature; those who are in the field use Form 41 data for many
purposes but seldom identify its origins.
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2.2.2 Local Study
IT FIRM REVOLUTIONIZE PHILIPPINES ACCOUNTING PRACTICE
By Antonio L. Colina IV
Sunday, August 11, 2013
According to the article of Sun Star Davao newspaper a homegrown Davao
developers recently launched the first-of-a-kind accounting software in the Philippines
that is set to revolutionize the accounting practice in the country.
When just about every company advances to employing computerization, what's
left of accountants still are a truckload of works need to be accomplished from making
internal reports, to a tedious job of making Bureau of Internal Revenue (BIR) compliance
reports.
There's not only one accounting system software in the Philippines, many of them
came mostly from other international software firms.
The problem, however, is that some, if not all of them, do not directly meet what
the accountants, or the accounting department of a company at least, look for in an
accounting software based on the Philippine set-up.
Tito said Easy Journal is the brainchild of the collaboration between him, as the
certified public accountant (CPA) and of the two Information Technology (IT) experts -Rey Anthony Tito, marketing head, and Edmund Ado, IT head. In that way, they came up
with a solution that can help accountants cut almost 90 percent of their workload.
Before, he said an accountant has to go through several phases of making BIR
statutory reports, but Easy Journal can cut the work into one phase as it can produce
computer-generated reports.
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Easy Journal is equipped with BIR forms, BIR certificates, BIR Reports
Summary, BIR Date Files, and Standard Financial Reports. These forms are exactly
patterned from the BIR compliance reports in its digitalized format.
What one only needs to do involves only few steps; first, input all the necessary
data; and second, produce a printout of all computer-generated BIR reports and they're
good to go!
Published in the Sun.Star Davao newspaper on August 12, 2013.
TRADITIONAL COST ACCOUNTING SYSTEM TODAY
Marivic V. Manalo, CPA MBA
De La Salle University – Manila, Philippines
According to the study of Mr. Marivic Manalo of De La Salle University
manufacturing and cost accounting in the country became so linked because of the
necessity to determine profit on goods produced, sold and shipped. Early decisions made
within this relationship fostered a certain bench mark or standard upon which most of the
manufacturers in the earlier times will use as method. In the past, using direct labor as
basis for the computation of overhead costs to be charged on the products manufactured
would make sense, since it has contributed to the largest percentage of the cost that was
expended in manufacturing products such as, automobiles, trains, garments, etc. This
procedure of allocating costs incurred in production, other than direct materials and direct
labor costs was known as the traditional costing method.
Despite the fact that it is over 75 years old, most companies still use standard cost
systems to value inventory for financial statement purposes and for many other
management
purposes as well. This standard cost system has some advantages for financial statement
purposes (e.g., for simplicity and consistency). However, in this modern times where the
way
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we do business have changed, insisting on the use of the traditional costing system would
be misleading as a tool to assist in making effective management decisions.
The traditional cost accounting is becoming ineffective if not obsolete in the
current global competitive world of business. The business scenario in the olden times for
which it was developed and used is no longer the current business trend. Using standard
cost, which is the one being advocated by traditional costing system was designed for a
company that had: 1) homogeneous products, 2) large direct costs compared to indirect
costs, 3) limited ability to collect data and 4) low “below the line” costs. On the other
hand, today’s companies typically have 1) a wide variety and complexity of products and
services, 2) high overhead costs compared to direct labor, 3) an overabundance of data
and 4) substantial non product (e.g., distribution channels) costs that can dramatically
affect true product cost.
Many manufacturing companies are still arbitrarily attaching overhead to products
using direct labor as the basis. These companies often allocate the largest cost (i.e.,
overhead) based on the smallest cost (i.e., direct labor). Because of product variety and
product line complexity, using one homogeneous overhead rate which is being utilized
under traditional costing system, is no longer an appropriate average. Lastly, the modern
business environment today, is now characterized by high technology, high-speed, stateof-the-art data collection and reporting systems. With the proper tools and equipment,
gathering and manipulation of data in a multiple complex ways is no longer an issue. As
a result of these changes, the traditional system, with its "one-size-fits-all" approach, is
not an adequate tool for today's business conditions. Not only is the traditional costing
method unable to supply the necessary framework for measuring cost accurately, it
cannot also empower managers with sufficient information needed to manage the
company’s operations effectively and profitably.
Financial Accountancy (or Financial Accounting)
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Financial accountancy (or financial accounting) is the field of accountancy
concerned with the preparation of financial statements for decision makers, such as
stockholders, suppliers, banks, employees, government agencies, owners, and other
stakeholders. The fundamental need for financial accounting is to reduce principal-agent
problem by measuring and monitoring agents' performance and reporting the results to
interested users.
Financial accountancy is used to prepare accounting information for people
outside the organization or not involved in the day to day running of the company.
Managerial accounting provides accounting information to help managers make decisions
to manage the business.
Objective of Financial Accounting (FA):
The objective of financial accounting is to collect accurate, systematic, and timely
financial data and other financial information, and to compile and consolidate it in an
organized and systematic way, according to the principles and rules of accounting, for
reporting purpose.
The financial managers use these reports to assess the financial position of the company
through various financial management tools and then the financial position can be
compared to, or benchmarked against, the industry norms. The four different financial
statements used for the purpose of reporting and analysis are
1. Balance Sheet
2. P/L or Income Statement
3. Cash Flow Statement
4. Statement of Retained Earnings (or Shareholders’ Equity Statement)
In financial accounting, assets are recorded on the basis of historical costs in the
balance sheet, i.e., the assets are recorded at their original purchase price. Of course, the
depreciation on the asset is duly subtracted from its original value as the asset remains in
use of the business.
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However, in financial management, book value is seldom used and financial managers
consider the market value and the intrinsic value of assets.
2.3 Synthesis and Significance of the Study
Most of the studies or reports presented have common problems it is all about the
cash flow of every transaction. Debits are usually unavoidable and creating a much better
solution to it is very difficult to achieve at these instances. Also some of the problems are
greatly affected by the exchange of dollar rates or value of the present monetary
circulation in a specific market.
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CHAPTER 3
3.1 Software Requirements Specification Documents
1. Introduction
1.1Goals and Objectives
The goal of this project was to lay out all the details regarding the software to be
proposed for the client. As for the Company or the client they have the very right to have
access to all the information they needed to know regarding about the system and take the
whole comprehension of it. Cooperation from the client was also important to take
further study of their main process and to adopt it to their new system.
This
documentation was provided especially for them for their better use.
The main characteristic of the program would be Web based; the purpose of this
should be for the online banking that requires for the personnel to be updated for the
payments coming and the company’s accounts online.
The program was so deliberately enhance the quality of output in their specified
line of work. The program would help them save time and have a much accurate form of
information. The system mainly contains all the windows needed for reports needed to be
retrieved. The system has a records track of their main bank accounts, report of sales of
gained, expenses and file storage of all the daily reports.
1.2 Statement of Scope
At the first step accessing the program. The end-User must log-in using their
account and password. By checking user, the system will be able to determine the type of
user and the levels of its availability throughout the system.
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There are mainly different types of users within a program. The administrator and
the user. The administrator in his program would also be divided on three, due to their
different level of position in company, mainly the Managers of Finance and Accounting.
While the Director of Finance can access the whole system. And the user would be the
accounting and finance personnel.
At the end of each day, the accounting personnel would collect all the reports
from the other concerned departments. The accounting personnel will fix the report
needed. And the Account Manager would check the final output of its personnel and
forward it in the finance department.
The finance personnel will handle the balance of accounts, and the manager will
do the final checking. After flow thing the financial report. The Director of Finance will
have the final report of organizing.
1.3 Software context
Accounting and Finance is a very arduous job. And it is very important to keepits
program simple. Most of the company never conceals their way such job, because their
specific department was very controversial that it is seldom shared out in public, but
rather kept secret.
There a lot of topics concerning problem within Accounting and Finance. But the main
process was kept for the company privacy.
1.4 Major constraints
The Accounting and Finance system is a LAN based system and requires
integration of reports from other departments regarding in-flow of cash and requests of
funds. The system also requires a good hardware specification for the user to meet the
expectation to the system.
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2. Usage scenario
2.1 User profiles
Administrator (Director of Finance)
has the access to the entire system. The
administrator can view the rewards within
the Accounts Payable, Accounts Receivable
and the reports.
Manager
has the responsibility to do the final
checking of what the assistant has declared
on encoded in report.
Personnel
Manage the information needed in the report
indicate it in the program to be checked by
the manager.
Accounting Department
does collection of reports, balances the
whole accounts, after final checking the
reports
will
be
pasted
through
the
bookkeeper to be filed.
System
handles the software, guides the user and
stores he report.
2.2 Use-cases
Log-on to System
Update Accounts Receivable
Update Accounts Payable
Reports
Print Report
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2.2.1 Use-case
Accounting Personnel
Log-in to System
View sales /reports
Balance
Accounting Personnel
Reports
Check report
Account Manager
View report
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Finance Personnel
Balance
Update report
Finance Personnel
Check Report
View Report
Finance Manager
Compile reports
Organize report
Director of Finance
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2.2.2 Use-case Description
Use-case:
Log on to System
Primary actor:
Accounting Personnel
Goal in Context:
Access the system.
Precondition:
Unique password and user name for every user.
Trigger:
System should be accessed to complete their task.
Scenario:
1. System guidance for the accounting personnel to input their
password and account name.
2. Inputs user name and password.
3. System verifies the user name and password.
4. System is now accessible.
Exceptions:
The username and password has no verification
Use-case:
Update Accounts Receivable
Primary actor:
Accounts Personnel
Goal in Context:
To update Received money to accounts receivable report
Precondition:
Retrieved information from Sales/Report
Trigger:
Account Personnel fills report
Scenario:
Account Personnel log on to system.
Select Accounts Receivable in Main Menu.
Personnel checks for final input or values in the designated field
box.
Click the save button after the task.
Report Saved.
Exceptions:
An account should be existing
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Use-case:
Update Accounts Payable
Primary actor:
Accounts Personnel
Goal in Context:
To update Received money to accounts Payable report
Precondition:
Retrieved information from Sales/Report
Trigger:
Account Personnel fills report
Scenario:
Account Personnel log on to system.
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Select Accounts Payable in Main Menu.
Personnel checks for final input or values in the designated field
box.
Click the save button after the task.
Report Saved.
Exceptions:
An account should be existing
Use-case:
Report
Primary actor:
System
Goal in Context:
To display report/s
Precondition:
A record must be existing
Trigger:
Complete Information from the reports
Scenario:
Personnel log on to system.
Personnel click the report icon from menu.
Personnel click the date of report.
System Searchers the report.
Report is displayed.
Exceptions:
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Use-case:
Print Report
Primary actor:
Administrator
Goal in Context:
To print report, for special purposes.
Precondition:
A record must be existing
Trigger:
Yearly reports
Scenario:
The administrator log on to system.
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The administrator report in menu.
Select the date of specific report to view.
Report is displayed.
The administrator clicks the print icon of the report.
Print of report.
Exceptions:
The administrator tries to print before the actual annual and monthly
report
2.3 Special Usage Consideration
Not all end-users can view all the reports. The level of access in the system is
according to the job class of the person Logged-in. The account will determined the user
and leaders the display of allowed windows to visit or to function.
2.4 Activity Diagrams
The following activity diagrams show the processing a much detailed manner, as
shown in use-case diagram.
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Figure 2.The diagram shows that system would be accessible through correct input of
password and user name. Just in case the input is incorrect, the user would and return to
the first step.
Display to Enter Username
and Password
Enter User Name and
Password
Verify Account
Access granted
Figure 2 – Activity Diagram for logging on to system
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Figure 3.Shows the process of updating the Accounts Receivable window.
Log on to the system
Update Account
Receivable
Main Menu
Select: Accounts Receivable
Windows is displayed
Select Edit
Determine User
authorization
[Not Admin]
[Admin]
Edit Record
Save report
Forward to Finance
department
Figure 3 – Activity Diagram Update Account Receivable.
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Figure 4.Shows the process of updating the Accounts Payable window.
Process of updating the Accounts Receivable window.
Log on to the system
Update Account
Payable
Main Menu
Select: Accounts Payable
Windows is displayed
Select Edit
Determine User
authorization
[Not Admin]
[Admin]
Edit Record
Save report
Forward to Finance
department
Figure 4 – Activity Diagram Update Account Payable.
Airline Finance and Accounting
BESTLINK COLLEGE OF THE PHILIPPINES
Figure 5- shows the process of collecting and storing of report
Log on to system
Select report
Display report
Determine user
authorization
[Not-admin]
[Administrator]
Edit record
Save record
Figure 5.Activity Diagram to store reports
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Figure 6- this diagram shows how to the process of printing goes.
Log on to system
Determine user authorization
[Not-admin]
Admin
Select Report
Display report
Prompt to print report
(no)
(yes)
Print report
Figure 6. Activity Diagram for Printing Report
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3. Data Model and Description
3.1 Data object
User ID unique number assigned to the employee.
Password user’s password to gain access to the system.
Name Personnel’s full name
Position Personnel position is displayed.
Accounts Receivable Object
Accounts display the balance of Company bank account.
Assets company asset and shares
Marketing sales from airline related product.
Inventory sales from inventory department.
Accounts Payable Object
Bills important necessities the company has to pay.
Payroll payment for the employee’s salary
Tax the responsibility or obligation the company has to pay.
Misc expenses within the operation of company.
Report Object
Date of accomplishment of the report.
3.2 Relationships
Inside the Accounting and Finance system. The Accounting Personnel would
collect all the reports from other concerned departments needed to complete to complete
the (daily) financial reports. The Accounting Personnel would input all necessary
information, depending on their respected values. Some of the information may be
provided due to LAN connection which automatically catches the report of the concerned
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department once their report was already released and thrown out for saving. The
personnel would then forwards the report to the Accounting Manage for final checking,
and then pass the report to the Financing Department.
The Financing department would then balance the whole report to fit it in the
balance sheet. The finance personnel would do the job and after preparation. The
Manager would check it and saves the output and all the reports saved, as well as the
previous report can be seen in the report window. It is organized according to dates.
The director of Finance has the only access to all the previous reports and makes a
hard copy of it.
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3.3 Complete data model
The figure shows the relationship of every data objects.
Figure 7.Relationship Diagram for the Accounting and Finance System.
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4. Functional Model and Description
4.1 Class Diagram
Accounting and
Finance
Personnel
-name
-password
-position
+promote()
+demote()
+terminate()
+add Employee
1
Account Payable
0
-Bills
Account Receivable
-Payroll
-Asset
-Tax
-marketing
-Misc
-inventory
+add()
+add()
+check()
+check()
Report
-Date
+Check()
Figure 8. Accounting and Finance Class Diagram
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4.2 Software Interface Description
4.2.1External machine Interfaces
The system is compatible with local or network printers.
4.2.2 External system Interfaces.
The Accounting and Finance system requires LAN connection, to supply
important feed from other departments. And a good specification of storage is also
required to handle large storage files.
4.2.3 Human Interface
The interface can be navigated through keyboard and mouse combined.
4.2.4 Reports
Account Payable Report
Accounts Receivable Report
Report
5. Behavioral Model and Description
5.1 Events
Personnel Class Events
Log-on to system
Log off to system
Gets promoted
No longer employed
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Account Payable
Pays bill
Pays payroll
Pays Tax
Pays Miscellaneous
Check data
Account Receivable
Collect Asset Report
Collect Marketing Report
Collect Inventory Report
Check data
5.1.2 States
Personnel States
Description
Log-on
Employee has access inside the system
Log off
Employee has no access in the system.
Hired
Employee has been accepted on job.
Promote
Employee has been promoted and changes within the work
will occur.
Account Payable State
Description
Checking
Validation of the information.
Posting
Report has been displayed
Updating
Updating the information of new entry.
Account Receivable State
Description
Checking
Validation of information
Posting
Display of report
Updating
Updates of new entry of information.
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Report States
Description
Posting
Display or reports.
Initializing
Reports are being prepared to be displayed.
Printing
To produce hard copy.
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5.2 State chart Diagram
The overall process of the system was shown in figure 9. Accessing the system,
the diagram would show the process. Happening within the system as the user log in.
Figures 10 shows the Account Payable Window, after encoding all the necessary
information the report went to the reports Window waiting to be saved and authorized by
the director of finance. Figure 11 shows the Account Receivable Window, it also has the
same process as Accounts Payable and its final report would also be forwarded to the
reports Window also to be saved and authorized. Figure 12 shows the flow of keeping the
reports and saving it.
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Overall System State Chat
Diagram
Log-in
(incorrect)
Password entered
Verify
(Password-correct)
Account Receivable
Updating
Account Payable
Main menu
Report
Sign out
yes
Print
Complete
Figure.9 Overall system state chart
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Employee Class State chart
Diagram
Log
Logoff
on
Log on
Hired
Online
Offline
Terminated
Accounts Receivable State chart
Diagram
Log-in
Checking
Postin
g
Account (Bank)
Assets
Marketing
Inventory
Updatin
g
Figure.10 State chart Diagrams
Reports
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Accounts Payable State chart
Diagram
Log-in
Posting
Checkin
g
Bill
Payroll
Tax
Miscellaneous
Updating
Reports
Reports
View Record
Initializing
Checking
Postin
g
yes
no
Print
Print
Figure.11 State chart Diagram
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6. Restriction, Limitations, and Constraints
The system will be integrated with LAN connection and also with a database
management system.
Major internet browser like Google and Internet Explorer ( or higher version).
7. Validation Criteria
The effectively if a proposed system, must undergo tests, to avoid conflict in the
future use therefore a client must be involved or the primary menu to do the testing. This
process was to meet all the requirements as well as the expectation at the client to the
program.
7.1 Classes of Tests
Unit testing is conducted on the following parts of the program.
Editing of Reports
Update of Reports
Viewing of Report
Printing of Report
Log on to System
7.2 Expected software response
A notification icon will appear if there is any discrepancy in the report of sales
before proceeding the report to the storage.
Deletion of record within the software is not capable.
7.3 Performance Bounds
There are only limited of up to 5 persons involved in using the program.
Airline Finance and Accounting