Processes Of Accounting Information System - Myassignmenthelp.Com

Question: Discuss aboutProcesses Of Accounting Information System. Answer: Introduction The present report is developed for providing an analysis of the sales process of Bucks Phyz on the perspective of an accountant. Bucks Phyz is a medium sized company that is presently focusing on implementing some changes in its sales process. The review of the sales process of the company has been undertaken on the basis of the information extracted from the key personnel related to the sales process. The report provides an overview of the sales process of the company with identification of weakness in the process their impact on the organizational performance. The report also provides an analysis of the specific internal controls to be implemented for overcoming the identified weakness and the recommendations for improving the efficiency of the sales process of the company in future context. Overview of Sales Process for Bucks Phyz The present sales process of the company consists of developing a pricing template for the customers through entering the customer data into the system manually. The process includes extracting the customer data from the sales contracts through the use of business ID, address and contact details. The information extracted is entered into the billing system for creating the customer profile. This is followed by the creation of a pricing template and linking it to the customer profile. The overall sales process of the company is monitored and controlled by the finance director, AR manager, head of sales, sales manager and master data specialists (Internal Control Case Study, n.d.). Internal control present in the sales process of the Bucks Phyz Internal Control Weaknesses in Bucks Phyz sale Process Impact of these weaknesses on the organization Specific internal controls to mitigate the risk Sales data of the customers are manually entered into the system and this makes the sales process highly complicated and prone to errors such as misplacement of data very frequently At the time of creating the price template for the customers a lot of detailed data is entered manually and the system view is too bulky that operator finds it very difficult to manually enter the data. There are many cases where customers have demanded to make the significant changes in the contracts. In order to mitigate these risks that arises due to manual entering of data, there is requirement to introduce the system where customers places the order online and it is forwarded to the sales team to make a review and check all the appropriate details. After checking all the details in sales invoice, it should get approved and customer must be asked to make payment or issue the credit note as per his/her convenience. There is need for introducing a broader view into the sales system so that it is easy to enter details manually if required (Gelinas, Dull, Wheeler and Hill, 2017). No review of customer data is done once it has been manually entered at the initial stage unless the specific reason to check the same is required Bucks Phyz has no policy to review the customer data after the initial input stage due to very less cost benefit ratio. As there is no review of customer data after the initial stage this might create problem while processing the sales through the particular customer in case there is some error left while making data entry. The account receivable department may get trouble while making the bank reconciliation if there is unavailability of proper details of the customers There is requirement of specific internal control to mitigate the risk of data entry of customers. There must be policy to make review of the complete list of customers once in a month or two months so that quality check can be improved and details of the customers can be maintained up to date. In order to make review, access rights can be given to sales team so that whenever they make contact with the particular customer they can verify the details and make corrections if required (Hall, 2015). Billing system does not have any automated data quality check controls that focuses on the customer data that has been entered into the system and guide the users in case of mistake. However there is standard format, using that users can enter data into the system but as mentioned all the fields are not relevant. There is no proper indicator that there is no requirement of such fields to be entered and no message displayed for type of data that should be entered while filling the specific field. Billing system is highly prone to the unwanted mistakes while making the entry of the customer data into the respective fields as there is no automated system that keeps the check on the data that has been entered in the billing system. In case of any error that has been left while processing the bills it will lead to occurrence errors due to no internal checks done. Billing system must be made in such a manner that there is specific requirement of each field and if any wrong data has been entered a alert message must be shown and advise message must be shown to the user to enter the correct details (Knechel and Salterio, 2016). Impact of Introduction of Corporate Credit Cards Detailed Review of Benefits and Potential Risks associated with the introduction of such cards The company is planning to introduce corporate credit card for meeting the business related expenditure of the employees. The company is planning to introduce such cards for overcoming the problem faced by the employees for meeting the business related expenses as they are required to raise a purchase order and then sent it to the supplier under the present system. Therefore, the employees are unable to incur the business expenses through the use of online medium. As such, the introduction of corporate credit cards by the company will help the employees to instantly meet their business expenses and thus they can incur any expenditure without waiting for gaining approval for reimbursement. However, the potential risks related with the use of such cards by the company are mixing of personnel and business expenditure by the employees. Thus, the employees can include their personal expenses in the unapproved expenses on the credit cards (Simon, 2017). Specific Internal Controls to be implemented for Minimizing the Risks Associated with the Use of Credit Cards The company should also introduce specific internal controls for reducing the chances of occurrence of any type of risk. Thus, the company should introduce the individual payment card system for the employees. This type of card system provides the responsibility to the employees for submitting the overall expense report to the management. Thus, the management reviews the overall expenses incurred by an employee properly before their reimbursement. Thus, it helps in identification of any personal expenses that might be mixed up with the business expenses by the employees. The employees are provided with the authority of paying the issuer directly for any unapproved expenses but the reimbursement will be made after the review of the management team. Thus, the introduction of such corporate credit cards will provide advantage to the company for reducing the chances of any risk occurrence due to mixing of personal and business related expenses by the employees. Also, the management shoul d develop proper corporate policies for proving an understanding to the employees regarding the need of providing such cards to them for misusing the chances of its misuse. The credit card should be issued against the name of an employee to whom the card belongs for avoiding the chances of occurrence of nay confusion during the reimbursement of the expenses (Turner and Weickgenannt, 2016). Recommendation to CEO regarding who should be issued Corporate Credit Card The corporate credit card should be issued by the CEO for both the employer and the employees. The employee credit card should be issued so that the key personnel of the company can meet the company related expenditure instantly without causing any delay in its operational activities. The employees related credit card should be issued so that they can meet their business related expenses during the time of travel and other situations instantly. For example, they can undertake specific trainings for improving their job performance by taking the permission of their supervisor any distant location and can meet its associated expenses adequately (Kurtz and Boone, 2008). Conclusion The overall internal control present in the Bucks Phyz is very poor and many improvements are required to be done in order to make the whole process run smoothly. The business organizations around the world are adopting the use of technology devices that are highly automated with high accuracy but Bucks Phyz is still dependent upon the manual system of data entry and processing of data. It is highly recommended to the Bucks Phyz to implement the suggested internal controls improvements in the above table and make sure that these improvements are made after developing the proper strategies for their implementation and review the same through the initial testing. The idea of corporate credit cards will solve the problem of petty expenses that occurs at the employees and the employers end. This will ensure the smooth functioning of the operational activities of the company and thereby improving its overall performance. References Gelinas, U.J., Dull, R.B., Wheeler, P. and Hill, M.C. 2017. Accounting Information Systems. Cengage Learning. Hall, J.A. 2015. Accounting Information Systems. Cengage Learning. Internal Control Case Study. n.d. Bucks Phyz. Knechel, W.R. and Salterio, S.E. 2016. Auditing: Assurance and Risk. Taylor Francis. Kurtz, D. and Boone, L. 2008. Contemporary Business. Cengage Learning. Simon, M. 2017. Corporate credit cards: How they work, benefits, drawbacks. Retrieved 16 January, 2018, from https://www.creditcards.com/credit-card-news/corporate-credit-card-1267.php Turner, L. and Weickgenannt, A. 2016. Accounting Information Systems: The Processes and Controls. John Wiley Sons.