Information Technology Systems of Fixed Assets Processes

Computer technology and its related assets have impacted the dynamics of
traditional fixed asset accounting management. Information technology assets now
constitute a significant percentage, if not the majority, of fixed assets, and capital spend,
for many institutions. More and more companies are using specialized asset
management software programs instead of spreadsheets or traditional manual systems.
Due to the abundance of fixed asset data, the time-consuming and tedious
requirements for tracking changes, and the intricacy of the tax laws, most companies
can justify the investment in computerized systems dedicated to fixed asset accounting.

Real World Application

Sophisticated fixed asset software offers many advantages. Tempel Steel, a

Chicago-based company with approximately 1900 employees, uses FAS 500 Fixed
Asset, a structured query language (SQL) software to account for fixed assets. Prior to
using this software, Tempel used an older system and spreadsheets. The company
estimated that the new fixed assets software cuts paperwork in half and reduces the
time spent on capital project management by half. Pepsi-Cola, Jamaica, a Pepsi bottler
with approximately 300 employees, uses the same fixed asset software as Tempel.
Under its older system, the monthly update of fixed assets took about three days; while
it now takes only a few minutes. This company also uses bar code technology to
conduct inventory of fixed assets. This improves the efficiency and effectiveness of the
fixed asset inventory process.

Computer-based Fixed Asset System

With automated fixed asset management systems, information related to fixed

asset acquisitions and changes to existing assets are input into the software by an
employee in the fixed asset accounting department. This can be done in real time or in
batches, depending upon the company's reporting needs and the volume of
transactions. For most companies, fixed asset acquisitions are considered non-routine
processes because they require specific authorization and are carried out infrequently.
Thus, the online approach is most reasonable.
 Conversion Cycle Information System

For a manufacturing firm, inventory which includes raw materials, work in

progress and finished goods represents a very significant component of current assets.
As such, efficient management of inventory is of great importance to a manufacturing
firm. In addition, inventory is working capital component together cash, receivables and
account payables. Effective management of each of the components of working capital
is crucial as it can increase the value of a firm. In today’s modern word, large and small
organizations are using the more advanced technologies and computerized inventory
management systems. Now a days, the IT based technologies is considered as the
prerequisite for control and management of supply chain. The use of IT in supply chain
management (SCM) enables the firm to maintain record of inventory, suppliers and
customers. But it does not mean that there is no outlet using the manual inventory
management system.

Industry Application

In fact, the use of computerized inventory management system for small retail
outlets, convenience stores, shoe stores and small manufacturers might be a waste of
financial resources. The use of these advance level of computerized inventory
management systems for large industries that have high volume of raw and finished
products have appeared as major and important element of business strategies that
aimed the increasing level of productivity and maintains the competitiveness. The new
powerful computer programs manages the great volume data and keep the records that
needs, including inventory control systems. By keeping in view the developments, the
business experts can spell and forecast the success and failure in today’s competitive
environment.
 The Influence of Information Technology on Accounting

Computers, servers, the Internet, wireless and personal digital devices have
forever transformed the way companies conduct business. Software packages have
also improved traditional operations and production processes. Accounting has seen
tremendous advancements thanks to the growth of information technology. Accounting
software automates the traditional paper ledgers and accounting books. These software
packages may come with a variety of specialized features or a generic program that can
be customized to current business operations.

Companies usually choose accounting programs based on the size of their

operations and the number of users accessing the system. Large companies may
choose system-wide software packages, such as an enterprise resource planning
system. Information technology (IT) has created significant benefits for accounting
departments. IT networks and computer systems have shortened the lead time needed
by accountants to prepare and present financial information to management and
stakeholders. Not only has IT shortened the lead time required to present financial
information, but it also has improved the overall efficiency and accuracy of the
information.

Computerized Accounting Systems

The biggest impact IT has made on accounting is the ability of companies to

develop and use computerized systems to track and record financial transactions.
Paper ledgers, manual spreadsheets and hand-written financial statements have all
been translated into computer systems that can quickly present individual transactions
into financial reports. Most of the popular accounting systems can also be tailored to
specific industries or companies. This allows companies to create individual reports
quickly and easily for management decision making.
 Software System Development Life Cycle Model for Improved

Stakeholders’ Communication and Collaboration

Software vendors and entrepreneurs, who try to introduce an innovative software

product to a specific organization or an entire market, enter a long and tedious process.
During this process, the market and various organizations evaluate the product from
different perspectives, such as software robustness, manufacturer reliability, and
corporate need for the product. The vendors and entrepreneurs engaged in this process
encounter decision crossroads for which no relevant guidance exists in the literature.

Research Study

The research outcomes of Cohen, Dori and Haan offers a unified, collaborative
multi-tier System Development Life Cycle (SDLC) framework and methodology for
packaged off-the-shelf software products that greatly improves communication and
collaboration among the stakeholders. Each tier addresses a different force or
stakeholder involved in the software market: vendor, customer, consultants and
integrators. All stakeholders refer to the same time-line thus; tasks of various
stakeholders are streamlined. Adherence to the unified time-line brings about an
increased amount of stakeholder interaction, communication and collaboration.
Results

Their findings led to a new model for software development, which is, Lead-
Driven Development. The proposed Lead-Driven Development model accounts for
market and organizational factors and the way they are woven into the traditional
phases of software development. It offers the basis for the unified, comprehensive multi-
tier SDLC framework and methodology that contributes to improved stakeholders’
communication and collaboration through the use of a common reference model for all
stakeholders. Each tier addresses a different force or stakeholder involved in the
software market: vendor, customer, consultants and integrators
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Smith, M. (2017, October 25). Fixed Asset and IT Asset Management in Healthcare.
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Turner, L., Weickgenannt, A. (2013). Accounting Information Systems: The Processes

and Controls, 2nd Edition. Retrieved September 27, 2018, from
https://www.safaribooksonline.com/library/view/accounting-information-
systems/9781118162309/c10-22.html

Muhammad, A. (2014). The Role of Information Technology in Inventory Management.

Retrieved September 27, 2018, from https://www.grin.com/document/381180

Ghasemi et al. (2011). The impact of Information Technology (IT) on modern accounting
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Cohen et al. (2010). A Software System Development Life Cycle Model for Improved

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http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.605.264&rep=rep1&type=pdf