Accounting Information Systems - PDF

ACCOUNTING
INFORMATION
SYSTEMS

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Introduction of the company.......................................................................................................1
Explanation on payroll processing system software...................................................................2
Role of accountant in existing software......................................................................................3
Recommendations for software improvement in payroll processing system..............................4
Summary.....................................................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Accounting information system is a system of collecting, storing and processing financial
and accounting data which is used by decision makers. This system is a computer based method
which helps a business organisation to track every activity of an entity. Main aim of this project
report is to build an understanding about the process of enterprise resource planning. ERP is a
business process management software which helps in managing and automating various
operations of an organisation. In this project report, an organisation is selected named as DRB-
Hicom which uses Ramco Payroll ERP software. Introduction about the company along with
discussion of this software is mentioned in this project report. Role of accountant in existing
software is also discussed in this report in order to make recommendations for software
improvement in payroll processing system (Groot and Selto, 2013).
MAIN BODY
Introduction of the company
“DRB-HICOM” HICOM was incorporated on 11 march 1990 under The Companies
Enactment act 1897 as New Serendah Rubber company Ltd. Later, it changed its name again in
1933, to HICOM holdings Berhad. it was incorporated in 1980 as the Heavy Industries
Corporation of Malaysia Berhad(HICOM) and The Diversified Resources Berhad(DRB) was
incorporated in 1990 as Peerless Assets Sdn Bhd. It was changed to DRB and listed in Malaysia
in 1991.
Although in 1996 both companies merged to form the biggest clustered in Malaysia and
DRB-HICOM listed in main board of KLSE. Now its permanent address is Level1, Wisma
DRB-HICOM U1/8, section U1, 40150, Shah Alam, Selangor, Malaysia. This is Malaysia's
leading company, engaged in the business of Automotive manufacturing, assembling and
distributing to industries and its involvement in passenger car and four wheel drive vehicle
market segment etc. Also it has National Truck project and National Motorcycle project. It
assembles cars in Malaysia for Tata motors, Honda, Isuzu, Mercedes Benz and Volkswagen.
This company after its merger up becomes the most financially sound company in
Malaysia, as it maximises it's profit year on year the last year's profit is 12.06 billion RM(2017)
and in year 2016 the profit was 11.50 billion so that is why it is leading financial company in
Malaysia.
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Explanation on payroll processing system software
Ramco HCM is a complete cloud HR software which helps to cover all HR needs from
hiring to firing. Ramco HCM is a payroll processing system which helps HR and accountant to
control and monitor all the activities of an organisation. Ramco HCM is considered as one of the
best software and is used by DRB Hicom. This software enables an organisation to effectively
conduct core HR activities such as talent management, recruitment, planning and analytics. DRB
Hicom is using this software to analyse and interpret their human resource information. Four
explanation of Ramco HCM is explained below:
Offerings by Ramco HCM:
Ramco HCM offers their clients a global platform for managing human resources and
their payroll system which enables organisations like DRB Hicom to access their information
from any part of the world. This software records all the wages, salaries, incentives,
compensatory amount and bonuses on a cloud based system so that it can be easily accessible.
Another offering by this software due to which DRB Hicom uses this is SMS based employee
service which enables employees to raise queries about their salaries and other issues via SMS.
Along with payroll feature, this system also helps business firms to maintain performance journal
in which fine tunes talent assessment is conducted.
These offerings provide an explanation about why an organisation like DRB Hicom
should use this software to maintain payroll of their employees and to monitor their perform.
Competitive advantage of Ramco HCM:
 Price - Price of this software is comparatively less than other systems which offers
multiple types of functions.
 Demo – When comparing to other enterprise resource planning systems, Ramco HCM
provides free demo of their software for few weeks in order to ensure satisfaction of their
clients (Sunarni, 2013).
 Compatibility – Unlike other payroll software, this software is compatible all operating
systems that is with Android, Windows and iOS.
 Storage – Another comparative advantage of Ramco HCM is its cloud unlimited storage.
This software offers unlimited storage to their clients which is not provided by any other
software of same price and customer reviews.
Significance of Ramco HCM:
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 Ramco HCM is a payroll software which helps in recording salaries which is required to
be paid to all employees which decreases conflicts between employee and employer
about wages.
 Another significance of Ramco HCM is automation. This software allows an organisation
like DRB Hicom to automatically credit salaries of employees.
 Ramco HCM helps business organisations to support integration of various business
organisations such as finance and HR (Ball, 2013).
Features and customer reviews:
 Ramco HCM provide various features to their clients such as human resource
management, their payroll management, employee performance management and
deviation in performance management.
 Customer reviews of Ramco HCM is way better than other software.
From the above four explantation it has been ascertained that Ramco HCM is the best
suitable software which should be used by organisations. This payroll system is used by DRB
Ramco in order to ensure that employees are suitably managed and controlled by this business
firm.
Role of accountant in existing software
Accountant is the key personnel which manages all the finance related issues of an
organisation. Accountant manages payroll of all the employees working in business firm due to
which functions of human resource manager is linked with functions of accountant. DRB limited
is a manufacturing company which has several employees in order to effective distribute their
salaries, this company uses Ramco payroll software. Accountant plays an important role in this
software which is mentioned below:
 Maintenance of software – Every system or software requires to be updated and
maintained frequently in order to ensure efficiency. Accountant of DRB Hicom, updates
all the information of employees on this software in order to gear automation
(Papaspyropoulos, 2012).
 Human hand of this software – Any machinery or software cannot not work without
any human hand. Accountant plays a role of human hand to this software. All analysing
and interpretation activities performed by this software, but the information which is
analysed is recorded by accountant.
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 Accountability – Software can not answer queries and issues of superiors due to which
accountants are made answerable for all the activities performed by this software.
Superiors such as supervisors and departmental managers held accountant as responsible
person for any deviations in payroll system.
Ramco payroll is the fastest growing cloud enterprises software that help in the
management of in the HCM, Logistic, assets management and ease the process of time and
attendance and collection of MRO. Accountant are responsible to manage the software in a
effective manner so that collected data will disclose the actual position of business. This
information helps them ascertain the proper utilization of resources so, that result can be
maximised and company will earn more revenue during an accounting year. This system help
them in calculating the pay checks and tax obligation, maintain management reports in effective
manner, develop self service features among other employees etc. (Scott, 2015).
So it is observed that at the time of implementation, accountant have the proper
knowledge about the process of EPR module. As it is important for them so that they can provide
better suggestion and revised the implementation of ERP system that further result in
improvement of business operation. It is the responsibility of accountant to have a strong
communication and coordination with subordinator working in different department and review
the front data procedure for combining of information and further analysis (Vikhorev, 2013).
Recommendations for software improvement in payroll processing system
Some big organisations follows the principle that if they pay their employees on time
then they have an efficient payroll process in workplace. No doubt that payroll processing is
most difficult task for the every organisation. Difficulties in adjustments regarding the tax
regulations, compliance and workers interest or benefit can ruin the accuracy and timing of
companies payroll system as in case of DRB-HICOM of Malaysia. Accordance with the survey
of Deloitte consulting, it was found that three challenges faced by the companies to face payroll
processing and the problems are Manual processing, Accuracy and timing of inputs, Non-
standard or complex processes , in short run these factors can be managed easily but6 in long run
these factors can affect the overall performance of the organisation. There are some measures or
recommendations to improve the Payroll process.
Understanding Tax policies: A single miscalculated payroll can result in penalties.
Therefore the payroll must be prepared according to the IRS payroll regulations and violation of
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any regulation leads to high penalties and companies would have to fix their errors while
remitting any payments due to the IRS along with penalties. The payroll must be comply with
the most recent recent tax laws and also comply with the IRS regulations. Not only this it is also
essential to provide information about IRS regulations and laws to the employees of the
organisation because their awareness is also essential thing.
Perform ongoing Audit: Ongoing audits are essential thing, because if the workers of
the organisations are complaining that their payroll are delayed or inaccurate then ongoing or
regular audits are essential for the companies like DRB-HICOM. Payroll calculation must start
from workflow analysis where the proper record of working durations and days where
analysation can be made from start to end. The errors can only be occurs if the company uses the
manual time card system for recording attendance but, mistakes occurs commonly in automated
payroll systems too.
Simple and Transparent payroll policy: It is essential to provide the adequate
information about the payroll to the employees so that errors and mistakes regarding the payroll
system can be minimise. Along with it is essential to provide the fair and clear policies regarding
the issues of attendance, leave of absence and expense reimbursement. Payroll policies must
include the informations like how payroll works, employees classifications, determination of
salaries, rectification of payroll mistakes and information regarding the calculation of overtime
and promotions etc. (Puolamäki, 2014).
Involvement of Employees: It is essential to have a transparent policy and regulations
implementation after the recruitment of an employee. Better communication channel with the
employees important to avoid the problems of mistakes, confusion and misunderstandings
regarding the term and policy and it is also essential for the em,employees to keep their proper
record regarding the attendance, working hours, overtime etc the big manufacturing companies
like DRB-HICOM must realise this demerits. so that if there is any mistake by payroll system,
can be identify by the another personal fair record of employees. Also it is also essential to get
meetings with employees in order to motivate them properly so, that they work with their full
potential and help the organisation in achieving the desired organisational goals.
Provide online access: It is helpful to provide the online access by using internet, to the
personal portal of the employees but with the security that no one can access another person's
portal. So it will helpful to get the performance knowledge online and clear the confusions
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regarding the working schedule. Online access provides full details regarding the past and
present payments made by the organisation, this will helps in reducing the amount of time spent
by payroll staff in dealing with payroll inquiries and ensures them focus on other important
issues of the organisation. (RW Hiebl, 2013)
Summary
This report summarise that which system is used by the organisations to distribute
salaries among its employees. Ramco Payroll ERP software is used most of the manufacturing
companies to provide wages to the workers. In this report the software is discussed in detail and
all the objective of the company to use the software are explained. The accountant of an
organisation is liable to accountability activities in which all the recorded information is analysed
and determined. Now a days this software is used by all accountants in order to get appropriate
results. There are various errors in this system that are reduced by making modification or
improvements in the software. It is very important for a company to record effective and accurate
accounting information in the books of accounting and the software which is used for this
purpose. If organisation is not able to record transparent information than it is not possible to
assess the right and appropriate position and status of business. The accountants handle all the
relevant data which is related to finance and make assumptions on the concept of accuracy. The
business entities are using computer software to make the accounting process effective and
accurate (Ball, 2014).
CONCLUSION
From the above project report it has been analysed that accounting information system
enables an organisation to record all their financial and accounting data using a software. Racom
ERP software is used by DRB Hicom in order to monitor and control all the activities related to
payroll system of employees. After discussing overview of company and explanation of ERP
software it has been analysed that these software results in effective payroll system of an
organisation. Accountant plays an important role in managing and controlling this software.
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REFERENCES
Books and Journals:
Groot, T. and Selto, F. H., 2013. Advanced management accounting (pp. 339-378). Harlow/New
York: Pearson.
Sunarni, C. W., 2013. Management accounting practices and the role of management accountant:
Evidence from manufacturing companies throughout Yogyakarta, Indonesia. Review of
Integrative Business and Economics Research. 2(2). p.616.
Ball, R., 2013. Accounting informs investors and earnings management is rife: Two questionable
beliefs. Accounting Horizons. 27(4). pp.847-853.
Papaspyropoulos, K. G. and et. al., 2012. Challenges in implementing environmental
management accounting tools: the case of a nonprofit forestry organization. Journal of
Cleaner Production, 29, pp.132-143.
Scott, W. R., 2015. Financial accounting theory (Vol. 2, No. 0, p. 0). Prentice Hall.
Vikhorev, K., Greenough, R. and Brown, N., 2013. An advanced energy management framework
to promote energy awareness. Journal of Cleaner Production. 43. pp.103-112.
RW Hiebl, M., 2013. Management accounting in the family business: tipping the balance for
survival. Journal of Business Strategy. 34(6). pp.19-25.
Ball, A., Grubnic, S. and Birchall, J., 2014. 11 Sustainability accounting and accountability in
the public sector. Sustainability accounting and accountability. p.176.
Puolamäki, E., 2014. Strategic management accounting constructions in organisations: a
structuration analysis of two divisional strategy processes. Turun kauppakorkeakoulun
julkaisuja. Sarja A, 0357-4652; 10: 2004.
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