B Bakery: Analysis of Accounting Information System Report

This report analyzes the accounting information system of B Bakery, a family-owned business dealing in bread and confectionary products. The firm, facing challenges due to competitive pricing, is exploring investments in accounting software to streamline operations. The report outlines the responsibilities of a baker, essential processes like business planning, finance, quality control, machinery, production, and market opportunities, along with their required outputs. It details a seven-step process for IT investment, including the identification of business needs, system appraisal, and cost estimation. Furthermore, the report provides an overview and comparison of accounting software options like MYOB, Recson, and QuickBooks to determine the most suitable software for the bakery. The ultimate aim is to improve efficiency and competitiveness through strategic IT investments.

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Accounting Information System

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Executive Summary
B Bakery is a family owned firm. It has been doing the bakery business for more than 50
years and dealing in bread and confectionary products. The firm is having 70 employees and
during the past year, its sale revenue is more than $ 13.5 million. It supplies goods through
pub-chains and super markets. Now, the issue is that the firm has lost its key accounts
because of its inability to produce the goods at competitive prices. The firm is trying to solve
this issue by investing in the accounting software’s for the smooth running of the business.

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Table of Contents
Executive Summary...................................................................................................................2
Introduction................................................................................................................................4
Responsibilities of a Baker.........................................................................................................5
Dveloping business requirements..............................................................................................6
Indespensable processes.........................................................................................................6
Output required from these processes....................................................................................7
Determining system requirements..............................................................................................8
Software Selection...................................................................................................................10
Vendor Selection......................................................................................................................11
Conclusion................................................................................................................................15
References................................................................................................................................16

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Introduction
The report is based on a family owned bakery. This report explain the roles and
responsibilities of a baker and the processes that are absolutely necessary for the bakery and
what outcomes are necessary from these processes in order to achieve the objective of the
bakery. Currently, B bakery’s objective is to provide products at competitive prices. It also
includes a seven-step process for the objective of IT investment. This report also includes a
complete description of three accounting software’s i.e. MYOB, Recson and QuickBooks and
a comparison is also made between two accounting software’s i.e. MYOB essentials and
recson one to identify which software is more suitable for the business (AICPA, 2017).

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Responsibilities of a Baker
A baker is an individual who produces and sells the baked products such as cakes, pastries,
biscuits, cookies, bread, Brownies etc. The main activity of the baker is to produce baked
goods and sell them to customers. All the other activities are secondary which are done to
complete the main activity. The bakery will perform the following activities: it will produce
goods as per the orders given by the customers, checking the ingredients used in the
production, applying icings or other toppings using spatulas or brushes, setting the
temperature of oven and setting the equipments used in the process of production, giving
attention to the colour of the baked products, placing dough in pans or moulds, properly
measuring the ingredients used in a particular product and labelling the products as per the
measured ingredients (Chakrabarti-Bell, et al., 2017). One more duty of a baker includes
giving timely orders to the supplier. The baker purchases the ingredients used in the baked
products from the suppliers. So in order to complete the order given by the customers it is
necessary that the baker will have the raw material which is possible only if the baker has
made a pre-estimation of the quantity and has given the order to supplier timely. The baker is
responsible to ensure the cleanliness and hygiene and maintaining the freshness of the food
items sold by the bakery. The business activities can also vary from the type of bakers.
There are mainly two types of bakers i.e. retail bakers and commercial bakers. Retail bakers
are engaged in small businesses. They prepare goods that people eat in the shop and they
prepare the baked products only as per the order given to them by the customers. These
orders are smile in quantity. The retail bakers are also responsible for the hiring, training and
development of their staff. With the responsibility of hiring and maintaining the employees,
the duty of handling the employee’s grievances will also become a part of baker’s
responsibilities (Christina, S., et al., 2017). On the other side, commercial bakers are
employed in the process of manufacturing. They use heavy equipments and ovens for

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production because commercial bakers will have to do mass production. They produce goods
on the basis of daily instructions given to them and will innovate new recipes. The baker is
also required to search for the new recipes in order to make bakery’s product innovative. The
baker needs to focus on time management and planning because a baker will get orders on
daily basis ((Hawkins, et al., 2016). So they have to manage the time for production, packing
and delivery. There are a lot of responsibilities for a bakery and each and every responsibility
is important equally. We cannot be irresponsible in a single process otherwise that single
mistake will affect the whole process. All the responsibilities of the bakery like purchasing,
production, labelling and packaging are inter-related to each other. Delay in one duty will
delay the whole process. How bakery is looking from outside is also the duty of the bakery
manager because the first thing that customers see is the outer appearance of the bakery so it
is also as important as the food provided inside the bakery (Kim and Gray, 2017). So the
bakery manager is also responsible to make the bakery attractive from outside.
Developing business requirements
Indispensable processes
The bakery business indispensable processes include six process i.e. bakery business plan,
finance, quality control, machinery, production and market opportunities. Bakery business
plan: This process is the most important and the first step for setting up a bakery. Firstly you
need to setup an objective, according to which the bakery runs. Bakery plan includes the
estimation of the finance required for the setup and for further processing, how many
machines are required, estimation of the workforce needed. It also includes the quality which
the bakery is going to maintain in the future, the process of production, selecting the suppliers
from whom the raw material will be purchased. It also includes understanding about the
process of obtaining the license required to open a bakery business. Bakery Business
Finance: While starting a bakery business, the first process is to arrange the finance needed.

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For this, the owner needs to arrange fixed and working capital. Fixed capital is used for
purchasing machinery and setting up the unit. The second is working capital which is used for
all the short-term expenses and payments of the bakery. Bakery Business Quality Control:
The second indispensable process is providing superior quality. In case of food items, quality
is the only thing which matters to the customers. Customers choose the bakery as per the taste
of the products. Bakery Business Machinery: At the time of choosing the machinery, two
ways are available one is semi-automatic setup and another is fully-automatic. The machines
required to run a bakery includes sugar grinding machine, sealing machine, biscuit-wafer
machine, planetary mixer machine, a working table with aluminium top etc. Bakery business
production process: Another indispensable process includes production process (Loughran,
and McDonald, 2016). If we thought about production, the first thing we need is raw
material. Raw material is the first stage for the process of production. Bakery is all about
production. A bakery is not selling the readymade products. Bakery business is all about
production. The major raw materials that a bakery needs include eggs, wheat flour, sugar and
ghee. These are the products which we need in high quantity and the products which we need
in small quantity includes assorted fruits milk powder, yeast, salt, , baking powder, , vanilla,
butter, cream, caramel colour etc. In case of small bakery unit, you can purchase the raw
material from the whole seller but in case of medium sized unit, it is better to purchase the
raw material directly from the manufacturer. Bakery Business Market Opportunity: The
business is initiated with an objective of profit. Today there is a lot of competition in the
bakery business because of many people engaging in the same business. Thus, the first task is
to analyse the opportunities in the market as per your business’s strengths and weaknesses
and to analyse the prices at which the competitors are selling their products (Majlesi and
Ekström, 2016). The first trick to attract consumers during the stat-up is providing innovative
products by properly analysing the tastes and preferences of consumers.

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Output required from these processes
The output required from bakery business plan is the exact estimation of the finance,
machinery, workforce and raw material because all other processes depends upon this process
so it needs so much of focus so that exact estimation can be calculated. The second process is
bakery business finance. So the output required in this process is arranging the finance as
calculated in the planning process and borrowing this finance at minimum rate of interest so
that it will be easier for the bakery to return it easily in the future (Massaro, et al., 2016).
Next process is bakery business quality control so the quality will be up to the mark only then
the bakery can survive in the competitive market. The output required from bakery business
machinery is using the latest technology in the production and updating the technology from
time so that the orders of customers can be completed on time. Another one is bakery
business production. The major output related to production is producing the goods at
minimum cost so that the bakery can earn a good profit on particular product and to
minimizing the cost; the bakery is required to purchase the raw material at a reasonable price.
The last process is bakery business market opportunity. The output that is required from this
process for the purpose of achieving the objective of the bakery is proper analysis and
understanding of the opportunities that are existing in the market. If these outputs are given
by these processes then only the bakery is going to achieve its objectives (Morren, et al.,
2017).
Determining system requirements
You might need to be the bookkeeper or do bookkeeping for start-ups with limited manpower
and financial resources. It’s advisable to make use of bookkeeping software in order to record
transactions. You can grasp cash flow in real- time basis through accounting. You should be
familiar of the various accounting software that you can choose to use in your business to
make bookkeeping effective and efficient. Because of the tough competition, today’s

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organization is making more investment on the accounting software and IT (Myob, 2017).
The investment in the IT and software will result in the growth of business, improvement in
the competitiveness, and will helps in strengthening the bakery business. The most efficient
way to achieve the maximum return from the investment in IT and software is to integrate the
technology with the objective of the bakery. The two issues related to the IT investment
objectives are performance and implementation. The return on investment of the software is
zero in case of unsuccessful implementation. So the bakery business needs to focus on the
implementation of the software that the software is implemented as per the objectives. The
second issue is related with performance (Nilova, et al., 2017). After implementation of the
software, the business is required to review the performance frequently to analyze whether
the software is performing in integration with the objective of the organization. In order to
make investment in IT, the first thing is to identify the problem for which the investment in
the IT software is taking place. Before investing in IT software, the company needs to check
whether the software will contribute to the growth of the business, whether it will minimize
the cost, is the software is having the capacity to remove the manual process so that the cost
to employees for the business can be reduced, is the software is helpful in building teamwork,
decision-making etc (Novas, et al., 2017).
There is a seven step process which is used to analyse the suitability of IT investment as per
the objectives of the business. The first step is determining the aspects of the business that
leads to the need for IT investment. The second step is whether the IT investment helps in
appraising the systems of the organization. It means that the updated software is removing the
obsolete systems with upgraded software’s. The third step involves estimating the cost
required for the IT investment. It includes the cost of acquiring the software, cost of
implementation, administration cost, configuration cost and if the implementation results in a
failure then the loss done to the business (PC, 2017). The fourth step includes assessing the

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potential risk. When we are implementing any software, the risk of its failure is always there
till its successful implementation. So the organization is required to assess the risk associated
with the IT implementation. The fifth step includes the pre-planned measures that can be
taken if the risk occurs to tackle with the loss done by the risk. The sixth step is related to the
implementation of the software. It is the most crucial step of the whole process. After this
step, it is analysed that whether the IT investment objective is achieved. The last step
includes calculating the return on investment by identifying the difference between the
desired results and actual results. If there is no difference between the desired and actual
result then the objective behind the IT investment is achieved and if there is a difference
between actual and desired then such IT investment is not suitable for the organization
(Ratinger, et al., 2016).
Software Selection
Accounting Software are helpful for a business in many ways like it automatically calculates
journal entries for the Balance Sheet and Profit and Loss Statement, easily transfer the data,
Bookkeeping software has embedded useful tools and functionalities to analyze your business
financial analysis and also give suggestions for the improvement in the financial
performance of the business (Saraf, 2017). The three accounting software’s for the bakery
business includes MYOB, Reckon and Quick books. Before selecting any software, the two
major factors that needs to be considered are cost and time. It should be analysed that
whether the software is less expensive and less time consuming. Reckon provides cloud
based accounting software’s. Reckon provides various software products according to the
shape and size of the business. Mind your own business (MYOB) is a Multinational
Corporation that provides tax, accounting and other services to the small and big businesses.
MYOB provides accounting software systems to help the business in managing the accounts
and bookkeeping needs. The best online accounting software for small businesses is

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QuickBooks. QuickBooks software is having three versions of it and all of them are
providing thirty days trial (Biafore, 2016). Enterprise resource planning (ERP) ia an
integrated software which is used to manage production, marketing, planning, management
and controlling. These are the core activities of a bakery business. In case of bakery business,
the output of one activity is the input of another. So in this way all the activities are
dependent on each other. For example, labelling is not possible without production and
packaging is not possible without labelling. The bakery business needs an integrated
approach (Serenko and Bontis, 2017). So in this way, high ERP is suitable for bakery
business.
Vendor Selection
Basically there are three major types of accounting software such as Database accounting
software, Installed accounting software and Cloud accounting software. Database accounting
software is used by large business. It is suitable for businesses having a large database to
install. So, data is more secured in this type of accounting software. To install and get this
type of software operating in your company, one needs to hire systems engineer and systems
consultant. Big companies and Banks are the main targets of this software. This software is
very much costly and time-consuming. It also involves higher cost for maintenance.
Installed Accounting Software is suitable for areas where internet connectivity is limited. So,
this software is used in the form of CD’s or DVD’s which can be installed in the desktop. But
this software is only used in rural areas. Now-a-days, the most commonly used software is
cloud accounting software. This is the latest software. The main target of this accounting
software is small and medium sized companies. With the help of this software, the data can
be available online so it can be accessed from anywhere at anytime and one of the biggest
advantage of this software is that it is less expensive. Now we are comparing the software’s
as discussed above. The two accounting software’s that are being compared includes MYOB

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essentials and Reckon one. On the basis of online, both the accounting software’s are
completely online. On the basis of unlimited quotes and invoices, MYOB essential have this
and reckon one add purchase and sales approval for medium level subscription. Next basis of
comparison is Inventory, third party products available in both the accounting software’s.
Another level is multiple currencies. This level is not available in both the currencies. Then
on the basis of purchase orders, MYOB essentials has this and it is available in reckon one
with invoicing module (Curtis, 2015). In case of payroll, in both the cases it is available with
unlimited employees. Job tracking is not available in MYOB essentials but it is available with
project module in reckon one. Budgeting is not available in MYOB essentials but it is
available in reckon one with one subscription. There is unlimited user access in both the
accounting software’s. MYOB essentials are providing the 30 days trial but reckon one is not
giving this facility. The session security and audit trails are available in reckon one but is not
available in MYOB essentials. The add-ons and integration is limited in both the accounting
software’s. MYON essential is more expensive then reckon one. In case of MYOB essential,
unit cost is stored with 4 decimal places but on the other hand, it is stored with 2 decimal
places in reckon one (Turner and Weickgenannt, 2016). In MYOB essential, GST is
calculated by using the 1/11th rule based on total invoice amount but it is calculated on the
basis of 1/11th of the line total in case of reckon one. MYOB essential allows editing of the
GST amount on purchase invoices in order to match it with the amount in the provided
document but reckon one strictly accepts 10% as the GST amount.
Levels MYOB essentials Reckon One
Unit cost stored with 4 decimal places 2 decimal places
30-days trial Available Not available
Payroll Available with unlimited
employees
Available with unlimited
employees