Professional Documents
Culture Documents
Case#1
Kim Fuller:
1. What information will Ms. Fuller need to manage the business? Classify this information
in two categories: accounting information and non-accounting information
Business revenues and process Similar to any business, she would need to be
set out for expenditures familiar with the competitive market she is in
She also needs reports on She would also need to form relationships
with people who are part of her operation
liabilities, assets and stock
and help her make everything possible
equity
Also hiring people who will make a good fit
Also other accounting in her organization and have the necessary
information would include the skill set
following:
Also other non accounting information would
Used truck
include the following:
Grinding machine Grind machine workers
Personnel computer Accountant assistances
Contracts with bottling companies
Warehouses $162,000
Accounting Software Package
Sibling’s investment $ 90,000
Mortage loan $112,000
Filler’s saving $75,000
2- See what you can do to draw up a beginning of business list of the assets and liabilities of Ms.
Fuller’s company making any assumptions you consider useful. How should she go about putting
a value on the company’s assets? Using your values, what is the company owner’s equity?
Assets Liabilities Equity for
Stockholder
Siblings - $90,000
Warehouse - $ 162,000
$112,000
Notes:
3- Now that Ms. Fuller has started to make sales, what information is needed to determine “profit
and loss”? What should be the general construction of a profit and loss analysis for Ms. Fuller’s
business? How frequently should she do such an analysis?
4- What other kinds of changes in assets, liabilities and owner’s equity will need to be recorded
and reported if Ms. Fuller is to keep control of the business?
To construct an effective profit and loss analysis to Ms. Fuller’s business we would have to take
certain things in consideration. She would definitely take under consideration what her business’
revenues are, as well as what the costs are - including operating and administrative costs. From
my understanding of her operation, it seems as though the expenses due to the production and
distribution of the product. All of this would be done, given that the revenues are credited.
Having said this, an effective profit and loss analysis needs to keep record of the liabilities part
of her operation (including mortgage payment), the payments or dividends that she needs to
make to her siblings in accordance to the investment they made to the company. She will also
need to record the change in value of assets. Moreover, I believe she should do the profit and loss
analysis every quarter. This way she can have an accurate representation of the statistics of her
business, which will in turn help her grow the business and plan for the future.
1-Pia should select system 3 because unlike the other two systems it has high level of efficient
interface and it can integrate upon request. System 3 offers a big monthly price among the three
systems but the good thing is there is no transaction fees which would suitable for Pia. As Pia
would not be able to afford paying increased fees it would be a good fit for pia to select system 3
as her cloud-based accounting information system. Pia would not be able to afford paying
increased service fees and accounting companies have multiple customers many of which are
much larger and more interesting than her pharmacy. Pia is also getting 2 hours of accounting
because this system is tied with accounting services and Pia would easily manage the services as
accountant as well. This system is pretty old and trusted for many years and the best part it has
zero transaction cost. As Pia would be the one who will use the system there is no chance of
lock-ins if she hired an accountant as the system is automated there will no be huge problems or
3-If pia selects system 3 and uses an accountant she would have much time to monitor what the
accountant is doing .She should ensure all the accounting transaction raw data are stored in one
single place and she could re-check it every day to make sure the accountant is doing the way she
wants .If all the data are stored in house and there is no internet connection the data will be pretty
safe. If she uses the internet often Pia can use a good antivirus in her transaction computer to
make sure the data is safe and locked from outside theft. She also can install a CCTV camera to
make sure all the data is recorded by the accountant without any interruptions
4- Yes price is an important factor when choosing the system because business growth has to
effect on the efficiency of operations. If pia adopts the cloud based AIS that should think about is
it cost efficient or not. On a business there must be concern about benefit and cost when
choosing the system. There were fixed fees, software licenses and basic monthly service fees and
some hidden costs. Over all, the fee should always fair and beneficial to the company. Along
with price it is important that should also be user friendly. So, user can easily work with it. The
company should think about decision which system should purchase which will be beneficial
from other according to cost and efficiency (Stax Inc, October 2016).
5- Pia should manage payroll and payments and the accountant should manage sales, purchases
and reporting. In the payroll section pia will do Personnel register maintenance, Basic payroll
data maintenance, Payroll calculations. And in the payments, she should be able to manage
Periodic VAT payments Salary payments, Payments for purchases, travel and other expenses,
Monthly payroll tax payments which I assume she already does this activity by herself. Sharing
Preparation and sending of annual pension insurance reports can be done by the professional
accountant. Sales, purchasing and reporting should be done in house because this activity can
complex when done using cloud computing if there is an error in software or there is an
interruption in internet connection all the operation will be on hold so it’s better of using an
offline system where all the data and all the input is done in-house. As an owner pia has already
managing much of her business activities as an accountant so it’s a good idea if she manages the
payroll and payments section and she can do that using the help of cloud computing Very easily.
6- When it is important to ensure a good fit between the selected system and the work
arrangement. First of all, to define whether the system is effective or not we have to then relate to
the work system with if the business as well as effect on the efficiency. Arrange the work step by
step in the system. Before arrange the work in system concern about user oriented and must set
of critical decision concerning the task because in accounting there have several tasks and sub
tasks, adding complexity of the problem. Mainly, set the work with the system integrate them
7-
Transaction fee is Euro 0.95/transaction ( charged for sales & purchases invoice and
monthly salary payments).
Accounting services cost approximately Euro 65/hour.
8- In long term Pia will observe the benefits of moving to the cloud accounting system, as she
adopts it for getting more time where she will able to focus more on management and strategy
development of her pharmacy. By implications of this cloud accounting system she will be free
from accounting. As she wish to move cloud accounting system because she found herself more
costly and getting more time to spend on management and strategy development, but if this
system will not provides her enough benefit as she expected she can shift to another cloud
accounting system or if she found moving to cloud accounting system will not be able to help her
then she can abandon it. (““Why Cloud Accounting Is Good for Business.”)
Work Cited
Bourgeois, Dave, and David T. Bourgeois. “Chapter 8: Business Processes.” Go to the Cover
Page of Information Systems for Business and Beyond, Published through the Open
Textbook Challenge by the Saylor Academy, 28 Feb. 2014,
bus206.pressbooks.com/chapter/chapter-9-info-systems-strategic-advantage/.
Stax Inc., and Stax Inc. “Customer Decision Making Criteria and the Importance of
Price.” Medium, Stax Insights, 24 Oct. 2016, medium.com/stax-insights/consumer-
decision-making-criteria-and-the-importance-of-price-1783d5589a8e.