Borger Management Inc - Financial Accounting Assignment
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Organization:Component:Submitted By:Date:Borger Management, Inc.Accounting DepartmentMarkeeda Guest-SpencerSeptember 17, 2016Description of theProblemA Property Management Company uses many different accountingsystems that don’t communicate with one another.The 1 personaccounts payable department uses... Timberline Software.The 2 personaccounts receivable department (as well as the 40 on-site propertymanagers) uses Rentroll Software. The General Ledger and FinancialStatements are maintained on MRI.None of the software is compatibleto the other.Borger Management faces a problemof gatheringinformation from different platforms and converting them to a singleplatform to create the financial statements.Business Activitiesand ProcessesAffected by theProblemPreparing monthly financial statements for the property owners is atedious week-long process. Outside consultants were hired to convert thedata from all of the various software packages so that it could then beimported into MRI.This process resulted in many errors every month.The monthly expenses for the consultants are massive.The systemerrors became more frequent and the 1-person IT department was unableto handle the increased system problems. Additionally, due to themultiple systems---true and accurate financial data is never availableuntil month end.ActualPerformance (e.g.,current baseline)Presently, consultantfee expenses that are passed on to property ownersare averaging $17,000 per month.TargetPerformanceSaving time, man hours and money will drastically increase propertyowner profit, management fee revenue and owner satisfaction &retention.Performance GapCurrently, it takes 7 days to prepare reports working 10 hours a day i.e.,70 hours. So if we have a simple and combined software, it will reducethe work to 2 days i.e. 20 hours. Thus this will also reduce the cost.Hence all three time, man hours and money will be saved.OrganizationalKPI’s AffectedManagement Fee RevenuePrincipleStakeholdersCFO; Accounts Receivable department; Accounts Payable Department;IT Department; Property Owners.Tentative SolutionStrategyCreating/Designing/Purchasing a single system with different modules(A/P, GL, A/R) that are able to communicate and produce data/reports inreal time.Acquisition Need/ConfirmationWe/I confirm that this problem can only be solved through theacquisition of IT services (and IT products as needed) from a contractor
selected in open competition.Activity 2OBJECTIVE OF THE REQUIREMENTS:Reduce the amount of time and money required toprepare financial statements, as stated in thePerformance Gap documentREQUIREMENTS CATEGORYREQUIREMENTS DEFINITION1. Stakeholder Considerations that Need to beReflected in the Solution(including the expectationsand satisfaction managers, internal users, and externalcustomers) and factors related to the businessenvironment)CFO seeks increased profit resulting from increased managementrevenue. Property owners benefit from having increased rentrevenue as well as real-time financial statement available.2. Factors to Take Into Account Related to theBusiness Environment(including legal factors,regulations, competition, and business cycles)Competitors have the capabilities described here3. New Capabilities and/or Functionality Requiredby a Solution(including requirements for ease of use,quality, interoperability, and data sharing)A software solution is needed that will eradicate thecumbersome data conversion process which will in turn increasethe quality and accuracy of financial statement preparation.System must be able to capture data, integrate with othermanagement functions (i.e. payroll imports) and produceaccurate and reliable real-time financial reports. System must beuser friendly, fast and flexible, and able to cross function with allaccounting department needs.4. Existing Business Process Shortfalls(why currentbusiness process and/or systems cannot meet the needsor be changed to meet the needs)Current software being used is dependent on outside consultanthelp for converting data into a useful format. The multipleaccounting software modules cannot interface with one another.5. Cost Limitations(may be stated in terms ofpreferred cost range; may specify a maximum cost; costfigures need to include associated overhead costs; maybe specified as an annual limit or life cycle limit orboth)Expected cost is $100,000 for software system design. Totalproject cost, including implementation and training andoverhead, is expected to be between $250,000 to $300,000.6. Other Limitations or Constraints(e.g., availabilityof key personnel, such as subject matter experts,training methods and time available for training,limitations related to maintenance or to externalsupport).Must be easy to learn. Off-site resident managers (end users) arenot overly familiar with computerized systems. Additionally,due to the small size of the IT department, the new software mustalso have high reliability with automatic online updates, reducingdependence on IT staff.7. Security & Privacy Requirements(anyrequirements beyond those currently being used by theorganization for non-critical and non-sensitiveapplications)Upgraded server room with the highest security to avoid theftand damage. Updated firewalls to protect server data.8. Number to be Implemented(e.g., specify thenumber of places the solution will need to beimplemented and whether they are at differentgeographical locations)The solution must be provided for four workstations in thecorporate office, and 25 work stations at off-site residentmanager offices throughout the Washington, DC area.9. Schedule(explain any schedule constraint, whetherfor financial or non-financial reasons--e.g., if thesolution be in place as of a certain date, specify the dateand why)Acquire and implement within next six months (01/01/17 -06/30/17). Doing so within three months brings quicker financialbenefits.
10. Other Requirements Not Specified Above(e.g.,any related to vendors, consultants, partnerships withother entities, unique user interface requirements,documentation needs, special certificationrequirements)Due to IT department size and expertise, the new software mustrequire minimal in-house support; online training and techsupport is necessary.Activity 3OBJECTIVE:Reduce the amount of time and money required to preparefinancial statements, as stated in the Performance GapdocumentName of Solution AlternativeSummary Description of Solution That Meets the StatedRequirementsAlternative Solution #1:Acquirean In-house staff position toreplace consultantsHire an employee/employees whose major responsibility would beto take on the duties of the current consulting firm.Alternative Solution #2:HireSoftware Designer to create newaccounting softwareHire software designer to create a single accounting system whichwill have different modules yet in the same format. In other words,the new process will have different modules like: Accountspayable, Accounts receivable and general ledger.Alternative Solution #3:UseSoftware as a ServiceContract with a Software as a Service (SaaS) provider such asQuickbooks or Sage to obtain the functionality required via theWeb.Alternative Solution #4:Re-negotiate with consultantsRe-negotiate contract with consultants. Perhaps they can traincurrent staff to perform some of their duties to reduce consultantexpenses.IT Acquisition ConfirmationEach alternative solution described above requires the acquisitionof IT services from an external ITservice provider selected inopen competition.