Enterprise resource planning 1st by mary summer chapter 05

Enterprise Resource Planning, 1stEdition by Mary Sumner Chapter 5: ERP Systems: Accounting and Finance... • Examine accounting systems within ERP • Understand ERP financial systems • R

Enterprise Resource Planning, 1st

Edition by Mary Sumner

Chapter 5:

ERP Systems: Accounting and

Finance

• Examine accounting systems within ERP

• Understand ERP financial systems

• Review the interrelationships among business

processes supporting finance and accounting

Case: Atlantic Manufacturing

• Inaccurate and/or incomplete paperwork produces

problems

• Exchange of information between departments

made manually

• Unable to supply quantity discount information to

sales force

• Lack of coordination between departments

Accounting Processes

• Operational

management

level

– Production of

transactions

• Paychecks,

invoices, checks, purchase orders

Management Control Processes

• Budgeting

– Analysis of allocations, expenditures, revenues

• Cash management

– Cash flow analysis

– What-if analysis

• Capital budgeting

– Evaluation tools: NPV, IRR, pay-back period

• Investment management

Accounting Systems

• Traditional

– Provide operational-level software

• Produce invoices, checks, statements

• Financial accounting

– Financial statements for external reporting purposes

• Management accounting

– Information on profitability

Accounting Systems v ERP

Modules

• ERP

– Information shares integrated database

– Provides up-to-date information

– Seamless

– Creates document flow of transactions

• Accounting systems

– Manual or separate transfer of information

– Multiple platforms

ERP Financial Accounting

Module

• External reporting

– Set by general accounting standards

– Legal requirements

• Includes accounts receivable subsystem

– Interfaces with cash management

– Monitors accounts and updates, handles

payments, creates due date lists, produces statements

• Accounts payable

Management Accounting

Modules

• Internal accounting perspectives for directing and controlling

operations

• Information on variances between planned and actual data

• Key activities

– Cost center accounting

– Internal orders as a basis for collecting and controlling costs

– Activity-based costing of business processes

– Product cost controlling for profitability analysis

– Profitability analysis by market segment

– Profit center accounting of individual areas of organization

– Consolidation of financial data for accounting perspectives

• Enable management to better allocate resources, maximizing

profitability and performance

ERP Systems

• Provide on-line, real-time data

– Operational data

• Feedback on quality and efficiency of processes

• Information must be timely and specific

• Used for real-time operational control

– ABC data

• Information on profitability and products

• Real-time data

• Estimates are sufficient

Featured Article: The Changing Landscape of Computerized Accounting

Systems

• Define each of the “in-technologies and systems”.

• What is their relationship to the success of ERP?

Featured Article: The Changing Landscape of Computerized Accounting Systems, continued

• New types of accounting software

– Fair pricing

– Database management standardized

• Ease of mobility

– PC-based

• New markets

– ERPs dominate highest end

– Mid-levels are SQL-based and non-SQL-based – Low-end systems range from very low end to

more robust

Featured Article: The Changing Landscape of Computerized Accounting Systems, continued

• Internet-based commerce

– Hottest technology

– E-business

• Quicken allows remote entries through Web

• EDI and EFT

– E-commerce

• Amazon.com and on-line securities trading

• Dell Computer

• ERP

Featured Article: The Changing Landscape of Computerized Accounting Systems, continued

• Best practices

– Improve bottom line

– Create air of control

• Structured Query Language

– Database of choice

• Most accounting processes operate at the

operational management level

– Additional software enables financial and

management accounting – Each department or division may operate

different software and databases

• ERP systems’ integrated database allow for

seamless information sharing

– Easier reporting

– Includes all operational data and ABC data