Core Concepts of
ACCOUNTING INFORMATION SYSTEMS
Moscove, Simkin & Bagranoff
Developed by:
S. Bhattacharya, Ph.D.
Florida Atlantic University
Chapter 8
Accounting and Enterprise Software
• Introduction
• Integrated Accounting Software Programs
• Enterprise-Wide Accounting Software
Solutions
John Wiley & Sons, Inc.
Integrated Accounting
Software Programs
• Most companies purchase accounting and enterprise
software.
• Another option is to “e-source” the software by
buying the services of an application service provider
(ASP).
• Integrated accounting software programs
– process all types of accounting transactions.
– G/L, Sales, Purchasing, Payroll, Job Cost, etc.
• Packages today include Internet connectivity and
enable small businesses to create Web sites and
engage in electronic commerce.
• Middle to high-end accounting software packages are
typically sold by a value-added reseller (VAR).
Types of Accounting Software
• Small – Medium
($100 mm - $500 mm, 100 – 500 employees)
– Business software ($3,000 - $100,000 cost)
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Microsoft (Great Plains, Solomon)
MAS 90
ACCPAC
Macola
– Enterprise ($20,000 - $500,000 cost)
• Microsoft, MAS, ACCPAC & more
Types of Accounting Software
• Entry Level
– Smaller business
(up to $5mm revenue, 20 employees)
– Cost $100 - $4,500
– Examples
• Peachtree
• Quickbooks
Types of Accounting Software
• Enterprise Resource Planning (ERP)
– > $500 mm revenue, > 500 employees
– $400,000 - $300,000,000 cost
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SAP
PeopleSoft
Oracle
BAAN
• Industry specific
• Custom Built
Enterprise-wide Accounting
Software Solutions
• Enterprise resource planning (ERP) systems
– integrated programs
– do much more than process financial data.
• Capabilities to process enterprise-wide data
expand with the price and complexity of software.
• A valued feature of ERPs
– the ability to interface with customers and suppliers.
– This is termed supply chain management.
Specialized Accounting
Software
• Accounting software has become more
sophisticated and customized for specific industry
information needs.
• Specialized accounting software may include:
– Customer relationship management to keep
track of sales calls, seminars, and phone calls
with prospective clients
– Source code that may be customized
to fit a particular firm’s needs.
Enterprise-Wide Accounting
Software Solutions
• Enterprise System Functionality: ERP systems
originated from manufacturing systems
– MRP I Systems: Marketing sales projections,
Production schedules
– MRP II Systems: MRP I plus Forecasting and
Traditional ERP Functions
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Order processing and fulfillment
Manufacturing
Purchasing
Human resources
planning for all manufacturing resources including
labor and overhead
• ERP Systems combined MRP II systems with
accounting and finance functions
Extended ERP Systems
• Traditional back-office capabilities of
traditional ERP systems, plus…
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E-business
Customer management
Supplier management
Business partner management
Strategic business relationship management
• See graphic on pg 251
The Architecture of Enterprise
Systems
• ERP Configurations
• Centralized database
• Application interfaces
– Extended application interfaces
• Internet portals
Business Processes and
Enterprise Systems
• Integrated Business Processes
– Not just within company
– Also between companies
• ERP Systems and Business Process
Reengineering
– Do make it work, better be ready to function
efficiently using best practices.
– But don’t lose sight of what makes you unique!
Implementing an Enterprise
System
• Systems Planning and Forming the Project
Team
• Software and Consultant Selection
• Pre-implementation Work
• Go Live and Follow-up
• Training and Change Management
Costs and Benefits of
Enterprise Systems
Things to consider
Costs
• Time to implement
– Training (learning and re-learning)
– Data conversion
• Resistance to change
• Business cycle
• Support costs
– Platforms (Unix, Linux, Microsoft)
– Mergers of providers
• How to measure the benefit
Assignment
• Pick a unique industry
• Research types of accounting software
available (plural – so at least 2)
• Find 3 VAR’s
• Bring to class and be ready to discuss what
is unique about the software
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Hardware
Software
Training
– Technical
– Business processes
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Data conversion
Interfaces and customization
Professional services
Reassigned employees
Software maintenance
Software upgrades
Benefits
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Reduced inventory investment
Improved asset management
Improved decision-making
Resolved data redundancy and
integrity problems
Increased flexibility and
responsiveness
Improved customer service and
satisfaction
Global and supply chain
integration