Streamlining each accounting system to include the basic accounting modules and incorporating other company systems will help to ensure compliance and identify spending costs and potential capital investments. With the three operating entities (Georgia, Michigan, and California) and the joint venture in the People’s Republic of China, Riordan Manufacturing has a complex accounting setup. All information gathered from the operating entities is compiled at their corporate office in San Jose, California.
Similar to that of other companies, Riordan Manufacturing must ensure that there is cohesion between the various entities by instilling basic use of accounting functions and methods. Although the accounting configuration and distribution is transparent to their customers and suppliers, the aggregation process is complex. The recommendations presented by Team A will help to build an integrated approach to their accounting and distribution setup. At a minimum, the basic components of each operating entity accounting system include the following functions: General Ledger, Accounts Payable, Accounts Receivable, and Inventory.
The company has published balance sheet information that shows this level of data by comparing fiscal year ending September 30, 2010 vs. September 30, 2011. Assets for the Riordan Manufacturing include the following: information received from General Ledger, Accounts Payable, Accounts Receivable, and Inventories. Fiscal year ending September 2011 yield total assets of $47,409,137 compared to fiscal year 2010 numbers of $34,825,498. That is an increase of $12,583,639 or approximately 26. % in 2011 compared to 2010 assets. In addition to the aforementioned accounting functions, Riordan Manufacturing uses the standard accounting methods of cash and accrual. Both methods are similar, but one of these methods will be used based on timing. In financial reporting, the cash method of accounting is used when accounting records revenue when cash from customers is received, and records expenses when they are paid in cash (Sanker, 2012).
The Essay on Knowledge of different accounting methods
Through the duration of the first three weeks of the accounting 291 course learning team A has acquired knowledge of different accounting methods. The three main objective during week three include stocks that corporations issue such as common stock, preferred stock, and treasury stock. Learning team A also discovered methods to tell the stocks apart through their differences. The second main ...
Therefore, cash basis does not recognize accounts receivable or payable.
Conversely, accrual method of account include items when they are earned in addition to claiming deductions when expenses are incurred (Sanker, 2012).
There are plenty of software programs available to help an organization’s accounting needs. With so many available finding the right software program can be a burden. Evaluating the needs of an organization as well as the size of the organization will help one find the correct software program. When selecting the software program it should be upgradeable for future needs as well as be able to troubleshoot and fix any errors in the program.
The cost of the accounting software will also play a huge part in deciding on an accounting program. Riordan Manufacturing has multiple divisions of the company. When it comes to accounting software there are different programs used throughout Riordan Manufacturing. The San Jose plant use a different accounting software program than the Michigan and Georgia plants. This often causes a delay in financial reporting, which has caused Riordan Manufacturing investor’s confidence to decrease. The delay will also impact the outcome of future capital investments.
The Essay on Conventional Accounting Systems
Advantages of a Computerized Accounting System The Difference Between Net Income & Pretax Accounting Income The Difference Between Strategic & Traditional HR Before the advent of fast and cheap computers, accounting traditionally was processed manually with all transactions recorded in columnar papers and kept in voluminous binders. Once computers became popular and software affordable, ...
When are there errors in accounting and financial documents this will often lead to errors and spark costly audits (Perry, 2006).
The different departments of accounting such as accounts payable, accounts receivable, and order entry need to be maintained by one system and an individual server with mirroring will suffice for the above needs and of course, a proper backup solution will be for safekeeping of this data (Perry, 2006).
Microsoft produces a program that can meet the needs of Riordan Manufacturing. Solomon Great Plains program is the recommendation for Riordan Manufacturing.
The functions needed by Riordan Manufacturing and pricing makes this the logical choice for accounting software. This program will allow all divisions to report back to the central point, therefore providing instance reports. One must find a compatible program that works well with the system currently in place. Riordan Manufacturing requires certain systems to create an effective and efficient accounting system. Systems such as sales, accounting, financing and human resources need to have access to the accounting system (Apollo Group, Inc. , 2012).
Point of sale and cash register systems must continuously, during business hours, be connected to the accounting system. Reason being, sales are tracked and verified instantaneously. Inventory must also be considered within the accounting system to make certain that all inventory levels are monitored and replenish without user input. Monetary needs for inventory replenishing is tracked within the accounting software system. Billable hours must be tracked for cost purposes to make certain the company is working within budgetary and time constraints.
The accounting systems directly connected to accounting software must also contain the general ledger accounts, accounts payable, and accounts receivable. Purchase orders for plastics orders must generate bills to customers. Collections must also have access to the company’s accounting system because many times bills do not get paid, therefore collection action must be pursued. These requirements must also be as secure as possible, behind a firewall, and virtual local area network (VLAN).
Expense accounts must also be tracked within the accounting software to make certain every expense is accounted for.
The Essay on Accounting System Paper
Kudler Fine Foods has done a wonderful job with its current accounting system by manually tracking data and not having a uniform system for providing information about that data. Data is the raw and unorganized version of information while information is categorized and decipherable data that correlates to the business. Kudler Fine Foods is making a transition from the less efficient and more ...
Finally, payroll, which includes salary and wages, payroll taxes, and deductions must be accounted for and budgeted. Integrating different modules provide a well-rounded accounting software package with the ability to keep management informed of the financial status of the company. Riordan’s current system does not include basic accounting departmental functions or modules. The company must devote funds and time to generate accurate Income Statements, Balance Sheets and the General Ledger in a consolidated effort with external auditors.
As a result, a coordinated effort should be made to consolidate systems, link associated databases, and purchase appropriate accounting software. Purchase or development of software will reduce data redundancies and increase efficiency and productivity. By undertaking these measures Riordan will be able to ensure compliance, therefore cutting costs, and focus on identifying new sources of revenues and cost savings initiatives. References Apollo Group, Inc. (2012).
Riordan manufacturing – intranet. Retrieved on November 4, 2012, from https://ecampus. hoenix. edu/secure/aapd/cist/vop/Business/Riordan/index. asp University of Phoenix. (2010).
BSA/500 course notes. Retrieved from University of Phoenix, BSA500 – Business Systems I website. Perry, Cornell. (2006).
Riordan Manufacturing Proposal. Retrieved November 18, 2012 from http://www. scribd. com/doc/48198199/Riordan-Manufacturing-Proposal Sanker, S. (2012).
Accounting Methods: Cash vs. Accrual. Small Business Chronicle. Retrieved November 19, 2012, from http://smallbusiness. chron. com/accounting-methods-cash-vs-accrual-3732. html
