B Bakery: Cost Reduction & Efficiency Through Accounting Software

This report details B Bakery's project to reduce costs and improve efficiency through the implementation of accounting software. Faced with increasing competition and rising costs, B Bakery hired an accountant and decided to invest in accounting software. The analysis identifies supply chain m...Read More

Business Report
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Executive Summary
This project is about B Bakery after the firm was able to increase its sales it saw that it was
losing its customers because of higher costs. The firm decided that it will hire an accountant
and use an accounting software to reduce costs and improve the overall functioning of the
organization. After analysis, it can be said that the key processes of the business which are
supply chain management and accounts preparation can be improved by using SAGE 100
ERP accounting software. This software will help the firm to reduce its costs, help in
preparation of accounts, improve the managerial decision making and improve the overall
functioning of the B Bakery.
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Contents
Executive Summary...................................................................................................................2
Introduction................................................................................................................................4
1. Define business process......................................................................................................5
2. Develop business requirements..........................................................................................7
3. Determine the system requirements...................................................................................9
4. Software selection............................................................................................................10
5. Vendor Selection..............................................................................................................11
Conclusion................................................................................................................................14
References................................................................................................................................15
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Introduction
The project is about a bakery that is B Bakery. In this project business process of the bakery
has been defined. The business of the bakery is growing but at the same time is facing
tremendous competition from its competitors. The family who runs the business has decided
to reduce its costs using an accounting software, to prevent customers from buying the
products of the competitors which are priced lower than the firm’s products. The
indispensable business processes that are human resource management, Supply Chain
Management,and account preparation and how these help in achieving business objectives is
explained. Further, the project has information about the essential requirements of the
accounting system that is to help the management in better decision making. Finally,
information about the selection of software and vendor has been discussed.
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1. Define business process
a. What a baker does? Discuss the business activities/processes of the organization to
show your understanding of the business.
The individual whose business revolves around baking and selling bread and other baked
products which are baked using an oven or another intense heat source. The place where
baker carries out these activities is called bakery. Items sold in bakery include bread, cakes,
pastries, scones, etc. B Bakery is a family owned business which means it is run by members
of a family. The bakery has around 70 employees. The business is being carried out for the
past 50 years. It sells breeds and other confectionery products to a business, which include
pub chains and supermarkets (Softwareadvice.com, 2018). Over the past few years, the
bakery has seen growth in its sales. The company has lost some of its clients due to higher
prices. The firm needs to reduce its cost of operations and they hired an accountant for it but
realized more was required and decided to make an investment in the accounting software.
The business of bakery focuses on baking products and selling them. The basic products such
as bread are daily use items which have high sales. On the other hand, cakes and pastries are
usually purchased on events such as marriages, birthdays and anniversaries. This makes them
high-cost products and provides the major source of revenue to the firm. There are a variety
of choices available in all the products mentioned which have different prices. This expands
the firm’s product line and helps them to increase their revenue. The B Bakery has a diverse
product line which helps the bakery to ensure that the demand of its consumers are met,
though some of its products have higher costs which need to be resolved.
The business of bakery is growing but to compete with the competitors it needs to build better
systems of cost control to sell the products at lower costs. This will require better
management and collection of information. For this, the family has decided to make an
investment in an accounting software, which will provide the information and help the family
to control the costs and produce the products in an effective manner (Botha, 2016). The
activities of bakery include production unit which produces the products, supply chain
management that is the management of the supply of the products, sales that is selling
products, finance, marketing accounts that is the approach of business marketing based on
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account awareness and helps the firm to increase its sales. So, for running the bakery these
processes are important and need to be performed with efficiency to ensure the firm’s growth.
B Bakery’ s processes are similar to a typical baker.
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2. Develop business requirements
b. What processes are indispensable to be performed?
Each part of the activity mentioned above are important but the core activities of B bakery are
the management of its supply chain that is SCM, accounts preparation and human resource
management. These processes ensure regular sales of the farm's produce, better employee
management which is necessary to carry out activities and accounts preparation which
ensures the firm is not incurring more costs than decided and is meeting its targets. The
account preparation process is so important the firm has decided to hire an accountant for this
and additionally use an accounting software to ensure the firm is able to reduce its costs by
using better accounting techniques (Utepbergenov, et. al., 2018). This will help the firm to
reduce its costs and meet the challenges that it is currently facing from its competitors. The
costs of the firm are rising which makes its products more overpriced compared to its
competitors and due to this, the firm is losing its customers. Additionally, by building better
supply chains the bakery can increase its sales and revenue. Better training and monitoring
the employees increase their productivity and makes them more effective. This will help the
firm to be more competitive and reduce its costs.
c. What outcomes are required for these processes to achieve business objectives?
The basic business objectives are to increase the efficiency of its accounts to reduce costs and
increase the productivity of the firm. Second, invest in accounting software to increase the
efficiency of the accounts that are currently being prepared by the firm. Third, to integrate the
existing business process to make the business more efficient and improve the functioning of
the bakery. Fourth, implementing Enterprise Resource Planning (ERP) and Accounting
System Information (AIS), ERP will help to integrate the business processes which will
improve the AIS.
B Bakery needs above-mentioned outcomes form the processes it performs. The outcomes, in
short, are improved efficiency and effectiveness of the firm, better account preparation that
will help the firm to reduce its costs and increase its productivity and integrating business
activities. This will attract more customer to the bakery because of reduced costs and better
quality products (Botha, 2016). The employees of the firm will gain the goals will be much
more clear and the managers will be able to manage the bakery with far more efficiency using
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the new accounting software and more information. The firm will be able to expand its
operations. All of this together will boost the employee morale, increase the sales, reduce
costs and increase productivity. Thereby making the firm more efficient in its functioning.
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3. Determine the system requirements
a. What are some possible software features or functionalities that the firm should
consider to achieve their IT investment objectives?
To achieve the objectives of the bakery the firm will need to implement ERP and AIS system.
The ERP will integrate all the business process which will make them more efficient and all
of this integrated processes will be visible in the central database which is also available to
AIS (Botha, 2016). This will ensure that the AIS system has access to the entire business
process and will help the system to function better.
The features that a basic AIS provides include an effective AIs system collects information
from the entire organization and records it in the journal which is used to prepare ledger and
then the Final Accounts. This ensures account preparation which is the most important role of
AIS. Secondly, an effective AIS system will provide the management of the firm relevant
information from the analysis of the financial information to important accounting
information for the decision making process. Third, the software will help the management in
internal control of the business that is to ensure that the objectives of the firm are achieved
and there are no deviations. This will help the management of the firm to run the business
effectively and efficiently.
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4. Software selection
a. Visit the websites of accounting software package vendors (e.g. SAP, MYOB, XERO,
etc.). you need to visit at least three software vendor websites
b. Which category of accounting software (low, medium or high end/ERP) suitable for
the firm? Give your justifications in detail.
The selection of software is an important part of accounting as it will be used for making
future management decisions. There are a couple of choices available.
Entry level accounting software
This softwareis suitable for a small company; it provides the managers the basic information
about the firm. It helps the owners to make decisions and makes results simple by delivering
them in a user-friendly manner. They usually do not cost much money. Examples of this
software are XERO, FreshBooks,and Wave.
Small to medium scale accounting software
This software is suitable for small to medium scale businesses. This softwareis able to handle
complex information and make them available for final use in a user-friendly manner. They
provide important information about the business which is necessary for smooth functioning
of the business. These are costly when compared with entry-levelsoftware. E.g. SAGE 100
ERP, Microsoft Dynamics, etc.
Enterprise level accounting software
This softwareis suitable for big enterprises. They offer them in-depth information about the
company and they require a lot of details to carry out its function. The results are complex
and can be understood by technical experts only. E.g. SAP, Oracle, etc.
For B Bakery small to medium scale accounting software will be enough to meet its
requirements.
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5. Vendor Selection
a. Compare and contrast the features/ functionalities of two accounting software
packages offered by accounting software package vendors with your selected category
in question 4.
Among the SMB accounting software the prominent vendors are –
A. SAGE 100 ERP
B. Microsoft Dynamics
SAGE 100 ERP:
SAGE 100 ERP has a number of variations in its software available for SMBs. These include
SAGE 100 Advanced ERP, SAGE 100 Standard ERP, etc. The software can support around
50 users at a time. It provides a diverse range of features which include business intelligence,
HR, manufacturing and distribution management, web services and most important for B
Bakery customer relationship management. The software runs on Windows operating system
and can be used on clients or online server (Softwareadvice.com, 2018). This system will
improve the decision-making process of the bakery. These features will ensure low costs of
production and higher productivity. The software is customizable for different business
processes. Personalization of workflows for different users can also be done. This will help
the business to increase its efficiency and effectiveness.
Microsoft Dynamics:
Microsoft Dynamics also has a lot of software for SMBs like B Bakery. This software is easy
to use and makes the recording of information easier and extraction of information user-
friendly. Microsoft Dynamics SL another variation of the software makes the project focused
on accounting, government contracting and construction business accounting easier. Another
is Microsoft Dynamics NAV It provides firm a good control over the human resource
management, supply chainmanagement, financial intelligence and business intelligence. This
system will help the firm to make better decisions and to govern its business with far more
efficiency. In case of B Bakery, this software will serve the purpose for which the firm is
considering to use the accounting software that is reducing costs and increasing productivity.
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b. Which one would be the most suitable vendor (and accounting software package) for
the bakery business and why?
B Bakery wants a management accounting system which will help the firm to integrate its
various business activities, reduce costs and improve the productivity.
It is recommended to use SAGE 100 ERP as its accounting software. This system will offer
the firm significant advantages. These are –
 This system will provide greater integration of customers, vendors and in-house users
with the business. Better communication will improve the customer satisfaction and
help the fir to increase its sales. It will help the firm to achieve customer relationship
management objective which means the firm will be able to boost its consumer
relations.
 By transforming raw information into important data that can be used by the
managers to take managerial decisions will improve the firm’s functioning.
Additionally, the software has a dashboard where managers can see all the important
information which will constantly remind managers of the sectors where the B Bakery
is underperforming and corrective actions can be initiated.
 The accounting software has an inbuilt CRM module which works as a sales tracker.
It will help the managers in improving product usability, maintenance, stability,and
integration. This will help in improving the consumer satisfaction thus improving the
firm’s market standing.
 The billing and payment system will help in quick payment and invoicefor the sales.
This will end the previous physical invoicing system which will save time for not only
the bakery but also the consumers. This will also ease the recording of the journal
entries.
 Now a day, after the introduction of the smartphones most transactions are carried out
through them. The SAGE ERP 100 System has an inbuilt mobile module which will
make the process of mobile sales easy (Utepbergenov, et. al., 2018). This will help the
firm to increase its sales and also improve the efficiency of the firm as mobile sales do
not require employees. This will also help to reduce costs.
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 After using the software, the company will be able to reduce its costs by ensuring
better management. It will also help the firm to increase the productivity of its
employees which will boost firm’s revenue.
 Management will become easier and time for completion of orders will significantly
reduce. This will help the managers to improve the performance of their B Bakery.
 This will increase the capacity of the bakery of taking orders. The bakery will now be
able to take more orders and this will help the bakery to expand (Botha, 2016). This
will also increase the sales of the firm.
 There are other values added services which are included in the software which will
help the managerial staff in the company to carry out their work more efficiently and
effectively.
This will help the business to grow, improve customer satisfaction and become more
competitive.
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Conclusion
After the completion of the project, the decision of the bakery to hire an accountant and to
use an accounting software is necessary for the firm to face competition. After studying the
details and processes of the bakery and their role in achieving the firm’s objectives. The
guide of selecting the software has been discussed which will help the managers to choose
better accounting software. Also, SAGE 100 ERP will help in supplying the productsat the
lowest possible cost and it will meet the requirements of the firm. They also provide after sale
services which will help the firm to adjust to the new system. Thus, by using the accounting
software the firm will be able to increase its productivity and reduce costs.
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References
 Botha, P.F.S., 2016. Framework for a sustainable ERP license model in an
increasingly competitive software market (Doctoral dissertation).
 Considine, B., Parkes, A., Olesen, K. and Blount, Y. (2012). Accounting Information
Systems: Understanding Business Processes, 4th Edition. John Wiley & Sons.
 ILIE, R. and Ileana-Sorina, R., 2017. COST BUDGETING WITH THE ROMANIAN
BAKERY UNITS. Annalsof'Constantin Brancusi'University of Targu-Jiu. Economy
Series.
 Jaber, M.Y., 2016. Learning curves: Theory, models, and applications. CRC Press.
 Rashkovich, B. (2018). 12 Accounting Tools Every Small Business Needs. [online]
Fundera Ledger. Available at: https://www.fundera.com/blog/accounting-tools
[Accessed 31 May 2018].
 Romney, M. and Steinbart, P. (2014). Accounting information systems.
 Sage Partners. (2018). Sage 100 (MAS 90) | Accounting Software Info. [online]
Available at: http://www.top-sage-resellers.com/sage-100-erp.html [Accessed 31 May
2018].
 Simkin, M., Norman, C. and Rose, J. (2014). CORE CONCEPTS OF ACCOUNTING
INFORMATION SYSTEMS, 13E. Wiley.
 Softwareadvice.com. (2018). Microsoft Dynamics ERP Software | Reviews, Free
Demo & Pricing. [online] Available at:
https://www.softwareadvice.com/erp/microsoft-dynamics-brand/ [Accessed 31 May
2018]
 Utepbergenov, I., Kalimoldaev, M., Skliarova, I., Wójcik, W.,Toibayeva, S.,
Muslimova, A. and Issabekova, L., 2018. Intelligent management system of
production and quality products for the small and medium business enterprises.
Przegląd Elektrotechniczny, 94.
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