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Importance of Accounting Information

   

Added on  2021-05-31

12 Pages2038 Words92 Views
Assessment Task 2 – Group Assignment Introduction This proposal shows the importance of developing the Accounting Information System in aFitzroy medical center in order to gain effective revenues and achieve competitive advantages.Fitzroy is a small medical center which falls under the service industry as the business type. Ithas been providing healthcare services to the people. The role of IT consulting team is to definethe cost of the software systems, technical requirements, implementation and training strategy,cost of annual maintenance and support for developing the Accounting Information System forthis medical center. “An accounting information system (AIS) is a structure that a business uses to collect, store,manage, process, retrieve and report its financial data so that it can be used by accountants,consultants, business analysts, managers, chief financial officers (CFOs), auditors,regulatorsand tax agencies” (Fontinelle, 2018). Accountants at Fitzroy can work with AIS toprovide the highest level of accuracy in recordkeeping and company’s financial transactions.AIS are the legal requirements in order to fulfill the tax regulations. Accounting InformationSystem for the company consists of primary components of people, procedures andinstructions, software, data, internal controls and information technology infrastructure(Fontinelle, 2018). The software keeps track of the cash flowing through the business. Fitzroy can use MYOBEssentials starts as the software for the business because it is one of the most trustedaccounting software packages which are designed to assist small business. MYOB EssentialsPackage is the easiest and fastest way to manage and integrate cash flow and ATO compliancerequirements. Moreover, GST, invoices, bills, BAS, reports, and PAYG are also included.Cost of the software systemsThe cost of MYOB Essentials starts is $45/month and features included are unlimitedtransactions, unlimited customer invoicing, bank feeds, supplier bills and unlimited users(Spence, 2017). This works on both MACs and PCs. MYOB accounting software is always up-to-date and is securely backed up online.

Technical requirementsIn order to develop AIS for this medical center, it is necessary for the IT consultants to considerthe technical requirements. The technical requirements for MYOB software include Server,Workstation, Operating system, database, and Microsoft Office, Standalone, Printers andMYOB Practice Cloud Partners (Spence, 2017). Implementation and training strategyAn effective implementation strategy is critical success factor of the system which includes aplanned process which is as follows:a. Business ManagementThis is the important element for the lifecycle of the business which ensures that implementationis carried out at a time, as per the requirement at the highest quality. An experienced MYOBConsultant will help to perform strategic phases of the business, as well as looks after othertasks and manage them to obtain successful outcomes.b. Pre-ImplementationThis phase enables configuration of the system to meet the requirements and the deliverablesof this phase which include documents and checklists which identify how we want to practice towork and also an agreed business plan and timeline.c. Data conversionIn this step, the software provider will help to convert the information into the practice to work.d. Installation, set-up, and configurationThe software provider will help us to implement MYOB system to maximize the benefits forusers. This includes configuring appropriate assignments, templates, security, and workflows asper the requirement.

e.TrainingProper training and development programs are needed to be organized in order to ensure thatthe users are able to handle the newly developed software. Hence, the MYOB Softwareprovider provides comprehensive training to help teams to get the best out of the new softwareand the systems.Cost of annual maintenance and supportMYOB accounting essentials have provided the facility for trial for 30 days. Moreover, it has themoney back guarantee within 90 days. It has the auto backup to the cloud with the highestlevels of data security like internet banking (Spence, 2017).The issues of financial risks are currently being minimized due to the adoption of AccountingInformation System by the small to medium -sized companies to manage the sets of data. Itprovides the accurate security approaches such as firewall, encryption, and password to ensurethat the confidentiality of the company is kept accurately. Description of the Accounting Cycles:Accounting cycles are an important part of each and every business organization, even if it is aservice providing organization, finance and accounting cycles play an important role for each ofthem. Each of the business cycle play a crucial role and represents a different kind of businessactivity. Revenue and expenditure cycles form the most important aspects of the accountingcycle. A comprehensive and detailed description of both these cycles have been providedbelow:Revenue Cycle: Revenue is the heartbeat of each and every business organization, be itinvolved in providing product or services. There are two main aspects of this cycle; sales andcash receipts. Sales include all revenue which are primarily earned from the services providedby the medical center. The services are purchased by the customers, who receive variousmedical services from the medical center of Fitzroy (Yigitbasioglu, Mackenzie, & Low, 2013).Sales discounts, returns and allowances are some of the other parts of revenue cycle. Cashreceipts refer to the actual amount of cash received by the medical center.

The different processes involved in the revenue cycle are as follows:The process begins with the first step of providing of services to the customers or patients,secondly, submission of patient documents to the medical center authorities, then the coding ofthe reports are done. Thereafter the claims are submitted, posted and are intimated to thepatients. Thereafter, the reports are generated and consequently, revenue is received from thecustomer’s end, which marks the end of the revenue cycle.In MYOB, this entire process is initiated by raising a sales order in case of a patient, then stocksare released for picking (which is the provision of doctors), thereafter the supply of sales order isdone (which refers to the providing of services of doctors) and consequently, debtor invoice isprocessed from the medical center’s end (Fontinelle, 2018).. This marks the end of the revenuecycle.Expenditure Cycle: Expenditure is one of the most important aspects of medical centers. It is aproof the provision of services to the patients. Transactions, include inventory purchases, whichcan be done in both cash and credit. Payroll and other cash disbursements are another sourceof expenses of the medical centers. At any time, when the medical center spends cash, it falls inthe purview of the accounting cycle of expenditure. There are four basic steps involved in this procedure of expenditure cycle, which forms the cruxof the expenditure cycle in MYOB. They have been mentioned below:

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