Aspen Pharmacare Australia: Accounting Software Evaluation Report

This report evaluates accounting information systems (AIS) for Aspen Pharmacare Australia, a leading pharmacy company. It begins with an overview of Aspen Pharmacare's background, vision, mission, and business activities, including its hierarchical structure and the activities within its accounts and finance department. The report then details the company's business requirements, focusing on management accounting, cost accounting, and financial accounting functions, as well as material management. System requirements, such as multi-user login, financial information systems, and sales tax registers, are outlined. The report compares accounting software vendors like MYOB and DacEasy, assessing ease of use, cost, scalability, accounts receivable/payable, and payroll features to recommend the best AIS for Aspen Pharmacare. The ultimate goal is to enhance the company's functionality and operations by incorporating a suitable accounting software package. Desklib provides access to this and other solved assignments.

Accounting Information Systems
Evaluating an Accounting Software for Aspen Pharmacare
Australia
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Executive Summary
The Medicines sector is coming up with new challenges like any other industry. An increase in
the international prices has boost up the need to re-evaluate financial status of pharmaceuticals
companies. Aspen Pharmacare Company, which is a big supplier of medicines throughout
Australia, is experiencing a need to incorporate accounting software to meet new challenges and
to take their business to a higher level.
Our management group is apprehensive about their provision of using AIS (Accounting
Information Software) to manage the operations within organizations. The motive of this report
is to provide them with the basis in building informed business decisions which would help them
to be better armed in their business operations of management.
This report is based on evaluating accounting software which best ensembles the requirements of
Aspen Pharmacare Company and recommending it to the company. The purpose of this report is
to understand the key business requirements and processes at Aspen Pharmacare and based on
the understanding, to design such a process which can ensemble all its needs.
This report extended its search to identify possible software functionalities and features, such as
inventory control, budget management, and financial analysis and so on, that company might
require achieving its investment objective. Based on the research outcomes, a suitable category
of accounting software has been decided and acted upon.
Depending on the category suitable for Aspen Pharmacare, two accounting software packages
were compared according to the requirements of the company and based on the results of
comparison, the best AIS amongst them has been recommended to be incorporated to enhance
company’s functionality and operations.
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Table of Contents
1. Introduction..................................................................................................................................4
2. Overview of Aspen Pharmacare..................................................................................................5
2.1 Background............................................................................................................................5
2.2 Vision.....................................................................................................................................5
2.3 Mission..................................................................................................................................5
2.4 Business Activities.................................................................................................................5
2.4.1 Hierarchical Structure at Aspen Pharmacare..................................................................5
2.4.2 Activities at Accounts & Finance department and others..............................................6
3. Business Requirements at Aspen Pharmacare.............................................................................8
3.1 Business Processes and their Outcomes................................................................................9
3.1.1 Management Accounting Functions at Aspen................................................................9
3.1.2 Cost Accounting and Financial Accounting Functions at Aspen...................................9
3.1.3 Material Management.....................................................................................................9
4. System Requirements................................................................................................................10
 Multi-user login...............................................................................................................10
 Financial Information System.........................................................................................11
 Interest Calculation and Bank Reconciliation.................................................................11
 Sales Tax Registers, VAT returns and Summaries.........................................................11
 Document Printing..........................................................................................................11
5. Software Selection.....................................................................................................................11
5.1 Category of Accounting Software.......................................................................................11
5.2 Software Vendors................................................................................................................12
5.2.1 MYOB..........................................................................................................................13
5.2.2 NetSuite........................................................................................................................13
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5.2.3 DacEasy........................................................................................................................13
6. Vendor Selection.......................................................................................................................13
6.1 Comparison between MYOB and DacEasy Software Vendors..........................................13
Ease of Use............................................................................................................................14
Cost and Scalability...............................................................................................................14
Account Receivable...............................................................................................................14
Accounts Payable:.................................................................................................................14
Payroll:...................................................................................................................................14
6.2 Accounting Software Vendor for Aspen Pharmacare.........................................................15
7. Recommendations......................................................................................................................15
8. Conclusion.................................................................................................................................15
9. References..................................................................................................................................16
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1. Introduction
The aim of the report is to evaluate an accounting information system for Aspen Pharmacare
Company, which is an Australian Company working in medicinal sector, as a part of
management consultancy team working to provide best management guidance in order to take
client’s company to new heights.
The chief objective of this report is to determine major functions and operations of Aspen
Pharmacare in order to design accounting software that can ensemble all the required operations.
Learners will know about the following issues after going through this report.
 An overview about the company’s background and its business activities.
 An introduction to Aspen’s organizational structure and co-ordination between various
activities.
 A general overview of the functions and procedural operations at finance and account
department of Aspen Pharmacare.
 A deep research on determining software functions and features based on the functions
and procedural operations of Aspen Pharmacare in order to help company to meet their
desired objective.
 A justification on the category of accounting software vendor chosen for Aspen
Pharmacare based on extensive research and after analyzing various software vendor’s
websites.
 A comparison between two suitable accounting software packages for Aspen Pharmacare
and selecting the most appropriate one from both then meets the needs of the company.
The task of accounting management of pharmacy companies is significant and of vital
importance. Furthermore, each company tries to keep this information confidential and only
accessible to certain group of people. AIS will help to abstract the information and classify it
hierarchically based on the level of department.
The report has been organized into different sections based on the part it covers. The first part is
the introduction section that defines the scope and objective of the report. The next part covers
the report’s objective content. The third section is about overall summary and findings of the
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report. And last section provides a reference to all the authors and papers that has been consulted
in order to complete this report.
2. Overview of Aspen Pharmacare
2.1 Background
Aspen Pharmacare Australia is a leading pharmacy company and a subdivision of Aspen
Pharmacare Holdings Limited which is one of the major listed pharmacy companies of South
Africa, and possesses a trade capitalization of approximately US $10 Billion. The company
started up in the early years of 21st century and within a short span of time acquired many other
established brands of medicines. Many challenges faced and overcome and lifted out barriers
over barriers, made Aspen Pharmacare nation’s top pharmacy company. Today the company is
responsible to supply 8 % of the country’s total medicine need. It is also enlisted in London and
Chittagong Stock Exchange market (Elizabeth and Richard, 2007).
Aspen Pharmacare has their own manufacturing too apart from marketing their partner’s
medicines and today it is capable of manufacturing medicines for most probably each kind of
disease known today from diabetes to hypertension, cancer to AIDS, simple infection to Asthma
(Elizabeth and Richard, 2007).
2.2 Vision
The company has a vision to be able to provide best services in serving humanity and their
needs. Company plans on achieving this by being best in their nature and human-resource which
would help them to establish a respected and valued regional presence in the country.
2.3 Mission
The mission statement of Aspen Pharmacare is “to provide a company culture where every
employee has an equal importance and works to benefit health and wealth of the society.”
2.4 Business Activities
2.4.1 Hierarchical Structure at Aspen Pharmacare
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2.4.2 Activities at Accounts & Finance department and others.
At Aspen Pharmacare, the activities at Accounts & Finance department has been subdivided into
various sections which are BP and IOC, Financial Accounts I: which are concerned with
Strategic Business unit and Financial Accounts II which are concerned with Non-Strategic
Business unit, Leasing and Legal Affairs, Tax and Payroll and Treasury (Syeda, 2011).
BP & IOC
Here BP stands for Business Planning and IOC stands for Industrial Operation Control. BP &
IOC department is responsible for Costing and Budgeting of Aspen Pharmacare. This name BP&
IOC has been decided recently to acknowledge the horizon of their work (Syeda, 2011). Their
job is not limited to budgeting and costing but providing necessary knowledge for purchasing,
marketing, planning and other similar tasks required for making proper decisions. Activities
related to BP & IOC department are:
 To create cost sheets
 To define product’s manufacturing cost
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Chief Executive Officer
Vice-President
Ex. Marketing
Director
Commercial
Director
Marketing
General
Manager
Finance
Director Engineer
Manager
responsible for
marketing
Admin
HR FSD BRDD
Planning
Purchasing
MIS
Medical
Training
Storing
Samples
Regional
Affairs
Design
Managing
Finance &
Accounts

 To assign overheads
 To formulate company’s budget, for example, purchase budget, marketing budget, sales
budget , production budget and so on
 To formulate documentation, for example, biggest loser report, Product profitability
report, Scrap report.
 Inventory Control
 To identify cost centers
Financial Accounts
The main activity of this department is to maintain financial report of Aspen Pharmacare and the
work can be summaries as:
 External Reporting via financial reports
 Formulating monthly and quarterly reports.
 Maintain a record reporting earnings from export sales
Non-SBU department is responsible to handle the work related to partner companies of Aspen
Pharmacare, whether they are manufacturing partners, raw material suppliers or stationery
suppliers (Syeda, 2011).
Tax and Payroll
This department of Finance and Accounts handles the taxes and other payments for the company.
The main activities involved are:
 Disbursement of salary to respected employees
 Disbursement of salary loan after a clearance from concerned levels
 To maintain activities related to provident fund
 To calculate payable taxes by each employee
 To calculate income tax payable by the firm
Legal Affairs:
This department handles all the legal issues for Aspen Pharmacare firm. The main fucntions
involved are:
 Activities related to land
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 To handle issues related to chemical certificate.
 Looking for renewals permission for Boilers
 To maintain activities related to trademark
 Copyright for the new products
 To handle VAT
 To handle permissions required for International selling of products.
Treasury
Department of Treasury deals with
 Bills
 Cash at banks
The major task is to weekly review all cash flows and to monitor them (Syeda, 2011).
Other Major Departments
The other departments other than Accounts and Finances at Aspen Pharmacare are:
Procurement department: responsible for all the purchases related to the company.
Inventory Control and Planning: responsible for procurement planning, raw material and
production planning etc.
Sales Department: responsible for supplying sales forecast.
3. Business Requirements at Aspen Pharmacare
The accounting system software required for the Aspen Pharmacare is expected to handle all the
functions related to financial and accounts department that has been described in the previous
section whether it be the calculation of taxes for employees or company itself or be it to maintain
a record for all legal issues of the company.
All three functions of accounting: Management Accounting, Cost Accounting and Financial
accounting are the business requirements of Aspen Pharmacare. Hence AIS embedded with all
three accounting functions is the major requirement of the company (Russell, 2013).
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3.1 Business Processes and their Outcomes
3.1.1 Management Accounting Functions at Aspen
It is a financial technique which helps head of the departments and executive managers in
analyzing performances of the ongoing business (Aerts and Walton, 2013). The functions related
to management accounting are mainly cost analysis and budgeting and monitoring cost control.
BP & IOC department of Aspen Pharmacare comes under Management Accounting department
and the outcomes expected for this department after the AIS is formed are to help in maintain
following records;
 Capital Budgeting
 Cost-Volume-Profit Analysis
 Cost Benefit Analysis and Cost Analysis
 Annual Budgeting and Sales Forecasting
 Cost Allocation
 To maintain a record for allocation of various resources
3.1.2 Cost Accounting and Financial Accounting Functions at Aspen
AIS for cost accounting have three major roles within any organization:
 Planning and Decision Making
 Controlling operations and improving them
 Financial Reporting
These functions will help concerned departments to achieve their responsibilities in a better and
enhanced way (Russell, 2013).
3.1.3 Material Management
The task of effectively managing material is essential to achieve (Needleman, 2005):
 Customer satisfaction
 Maximum Efficiency during product manufacturing
 Inventory management
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At Aspen Pharmacare, the task of managing the material is divided into 2 parts: Packing material
and raw material.
These materials whether raw or packing are both purchased either locally or imported from other
markets and countries (Needleman, 2005). There are several steps that are involved in making a
successful transaction which are:
 Purchase order in process
 Material and goods received
 Recording cost disbursement
AIS is expected to able to record all these outcomes and help in easy management of
 Purchasing, Receiving and Storage of materials
 Sales Forecasting
 Depict Actual Material Sale
4. System Requirements
The major objective to incorporate AIS into Aspen Pharmacare is to simplify and speed up
complex tasks and increase their accuracy. It will help to access information quickly and will
enable staff to update necessary information with fewer efforts. The repetitive tasks will be
automated on their own (Aerts and Walton, 2013). Accounting Information System for Aspen is
also expected to help management with sufficient information that would help them in decision
making and sales forecasting. Some of the accounting features that have to be considered by the
firm in order to achieve its business objective are:
 Multi-user login facilities and abstraction of information depending upon the level of
department, for example, department that handles legal issues of the company should not
be able to access features that are related to finances of the company. This will help both
ways: complexity will be decreased on the end of users and confidentiality of the data
will increase on company’s end (Ijiri, 2015).
 Financial Information System that will help to collect and analyze information related
to company’s finances and will further help to design optimal planning and determine
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sales forecasts (Ijiri, 2015). The AIS must be equipped to be able to produce the
following outputs
 Cash Flow Forecasts
 Accounting Reports
 Working Capital Reports
 Trial Balance & P/L
 Balance Sheet
 Interest Calculation and Bank Reconciliation feature to help the tax and payroll
department to carry out their job with less difficulty and more accuracy. This will also
help to maintain a record for what maximum amount of salary loan could be approved for
a particular employee depending upon its other details which could be mapped internally
with the help of accounting software (Ijiri, 2015).
 Sales Tax Registers, VAT returns and Summaries is required for the legal affairs
department of the Aspen Pharmacare Company which would help them to handle VAT
and to handle permissions required for International selling of products and with many
other tasks (Ijiri, 2015).
 Document Printing will enable staff at Aspen to be able to print account vouchers and
Cheque, Payments receipts, Debit and credit notes and so on (Ijiri, 2015).
The other software features that must be included are Stock, Sales and purchase Analysis,
Calculating Doctor’s Commission and company wise margins, ST-IT Auditor Report and
many more.
5. Software Selection
5.1 Category of Accounting Software
Aspen Pharmacare Australia is concerned with serving only national market of Australia. The
currency needs for the software might be multiple based on the purchase of raw material from
different international markets. Also, this is the first time for Aspen Pharmacare to implement
accounting software so there will be a need to train end users, improve existing business
processes and migrating historical data. Low-end accounting software will not be able to
accommodate the requirements such as handling the transactions in multiple currencies,
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