MBA - Accounting Information System Report: Fitzroy-Nex AIS Analysis

This report provides a detailed analysis of the Fitzroy-Nex Accounting Information System (AIS), a customized system designed for the Fitzroy Health Centre. The report covers the AIS's functionality, which includes efficient data collection and storage, financial report generation, and ensuring report accuracy and reliability. It outlines the technical requirements, including personnel, procedures, software (Sage Peachtree), data, internal controls, and IT infrastructure. The report also discusses the cost of the software system, implementation and training strategies, and annual maintenance costs. Furthermore, it addresses the accounting cycles, such as revenue, expenditure, service, human resource, financial, and accounting transaction cycles, that the AIS will manage. The report concludes by emphasizing the importance of data verification for accurate financial reporting and decision-making.

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MBA -Accounting Information system
The Fitzroy-Nex is a customised Accounting Information System (AIS) that has been
designed for the Fitzroy Health Centre. Fitzroy Health which is a small medical centre will be
run by three doctors and two receptionists. According to its founder, Dr. Freeman, the Centre
will start its operations this year in October and is projected to serve approximately Eight
hundred patients. The Fitzroy-Nex AIS was developed upon request by Dr. Freeman and will
be used to handle the accounting and finance records and transactions for the new medical
centre.
The Fitzroy-Nex AIS will be used by the facility for the purpose of collecting, storing,
managing, processing, retrieving, and reporting its accounting and financial data to be used
by Dr. Freeman, accountants, and business consultant/ analyst to determine the entity
financial performance as well as decision making (State Accounting Guide, 2017, p. 41).
As directed by Dr. Freeman, this report addresses the functionality of the AIS, its technical
requirements, cost of the software system, implementation, training, cost of annual
maintenance and the accounting cycle to be covered.
a) Functionality
The functions of the Fitzroy-Nex AIS will be categorised into three. First, the system will
ensure effectiveness and efficiency of collecting and storing of data for the centre’s financial
activities such as obtaining information on transaction from different sources, Making journal
entries from the transactions and posting data captured in the journals to the ledgers (Doost,
et al., 2011, p. 64). Second, the system will produce financial reports and statements as well
as managerial reports that will be used for decision making. And third, ensure reliability and
accuracy of the financial reports and statements to ensure that management and control of
the organization is in order. In general, the AIS will focus on efficiency, effectiveness,
accuracy, and reliability of the financial and account reporting (Kuruppu, et al., 2015, p. 117).
b) Technical requirements
The Fitzroy-Nex AIS will comprise of six components for its functionality. The components
are also known as the technical requirements are personnel, instructions and procedures,
software, internal controls, data, and information technology infrastructure (Fontinelle, 2018,
p. 33).
First, the Personnel are the system users such as business analysts, accountants, and the
managers among others. The personnel are entailed to ensure the success of the AIS.

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Second, Instructions and procedures refers to the methods and ways that will be used by the
AIS to collect, store, retrieve, and process data. The methods will be both automated and
manual depending with the circumstance under which the AIS is applied (Evans, et al., 2012,
p. 112).
Third, Software refers to the computer programs that will be used in storing, retrieving,
processing and analysing the financial data for the medical centre. Software are chosen
based on the size of the business. The Fitzroy Medical Centre will only serve eight hundred
clients and with less than ten employees, the organizational is consider to be small in size.
Therefore, the Sage Peachtree Accounting software will be chosen for the Fitzroy-Nex AIS
(Evans, et al., 2012, p. 114).
Fourth, data refers to the information that is keyed into the AIS. It will comprise of client
billing statements, account receivables and payables, check register, payroll information,
timekeeping, inventory data, tax information among others (State Accounting Guide, 2017).
Fifth, Internal controls refers to the security measures that have been put in place to protect
data. Both passwords and biometric identification will be used to limit unauthorised access of
data (Fontinelle, 2018, p. 34).
Sixth, Information technology infrastructure refers to hardware component of the AIS. The
hardware items mostly used with the AIS include computers, servers, mobile devices,
routers, surge protectors, mobile devices, storage media and backup power supply
(Kuruppu, et al., 2015, p. 120).
c) Cost of the software system
The Fitzroy-Nex AIS will have a one-time licensing cost of $10,000 for up to 25 users. For
additional users, the company will have to pay $200 per user. Our consultant company will
also provide hardware and database at a price ranging from $ 2,000 to $ 7,000 (if the
company does not have them already) (Spence, 2017).
The features of the software system will include conducting unlimited number of
transactions, unlimited client records, invoices, supplier bills and bank feeds. As explained
earlier, the number of users is unlimited as far as the medical Centre would be willing to pay.
The software can easily be configured in any model of computers and laptops. With liaison
with the system administrator (s) at the medical centre, the system will be up to date with the
current client demand and market requirements. Lastly, there will be an option of backing the
data online for avoid loss and damage.
d) Implementation and training strategy

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The success of the Fitzroy-Nex AIS will depend on the implementation and training strategy
used. The following steps will be applied to ensure successful implantation of the system as
well as training of the personnel.
First, ensure that the AIS conform to the business strategies and requirements. Our system
administrators will work with Dr. Freeman and his personnel to ensure that the AIS is line
with the business requirements.
Second, a pre-implementation phase will be conducted to ensure that the AIS meets the
customer’s deliverables and requirements. This is will be the first testing of the AIS and will
help to determine whether or not it meets the set standards and quality.
Third, the AIS will then be installed and configured with the business needs to test
workflows, security, and execution.
Fourth, users will be trained to ensure that they are well prepared to work with the AIS.
Likewise, users will be provided will system templates for future reference.
e) Cost of annual maintenance
Likewise, the implementation cost will be 15% of the licensing cost per annum while the
annual maintenance cost will be 20% of the licensing cost. Lastly, two system administrators
and an accountant (to be employed by the company) will be trained for one month. The
training cost is already included in the implementation cost. However, the company will have
to pay $300 per head for additional personnel to be trained for a period of five weeks
(Spence, 2017).
The costs of acquisition, maintenance, implementation, and training has been summarised
as shown in the table below;
Costs Calculation Amount ($)
Acquisition 10,000
Maintenance 20% of 10,000 2000
Implementation 15% of 10000 1500
Training 0 0
TOTAL 13,500
The business will incur a cost of $ 13500 to have the Fitzroy-Nex AIS in place.

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Accounting cycles, e.g. revenue cycle, expenditure cycle in accounting system is presented
as below;
Source: Doost, et al., (2011, p. 117)
Revenue Cycle: This cycle will handle all the activities related to any sales conducted by the
business as well as payments collected from such sales.
Expenditure Cycle: This cycle will handle all the activities related to purchases made by the
business as well as payments for the goods and services used by the business.
Service Cycle: This cycle will handle all the activities related to provision of treatment
services that will leave the customers’ satisfied. I will cover the moments when patients
report at the reception to the moment they are discharged or are have received adequate
services (in the case of outpatients) (Evans, et al., 2012, p. 121).
Human Resource Cycle: This cycle will handle all the activities related to hiring of employees
and making payments to them.
Financial Cycle: This cycle will handle all the activities related to borrowing the required
funds to run the business, making loan payments and distributing dividends to the
shareholders.
Accounting transaction Cycle: This cycle will handle all the activities related to daily activities
towards running the business. It will entail entering the information previously captured in
General Ledger and Reporting System
Revenue Cycle Expenditure
Cycle HR Cycle
Financial
Cycle
Accounting
transaction
Cycle
Service Cycle

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purchase orders, receipts, sales invoices, and job tickets into the system (Evans, et al.,
2012, p. 123).
The information from the six cycles will be captured in the General Ledger and Reporting
System and can be retrieved from time to time generate financial reports and statements
showing the business' financial position and profitability. The information will also be used to
business decision-making process. However, data should be cross-checked and verified
before making a final entry into the AIS to ensure reliability and accuracy of the results
(Evans, et al., 2012, p. 123).

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References List
Doost, R., McCombs, G. & Sharifi, M., 2011. The State of Teaching Accounting Information
Systems: Is There a Gap?. Review of Business Information Systems, pp. (7)3, pp. 61-70.
Evans, E., Burritt , R. & Guthrie, J., 2012. Emerging Pathways for the Next Generation of
Accountants, The Institute of Chartered Accountants in Australia and Centre for Accounting
Governance and Sustainability, Australia: University of South Australia.
Fontinelle, A., 2018. Introduction To Accounting Information Systems, Washington:
Investopedia.
Kuruppu, N., Oyelere, P. & Al-Jabri, H., 2015. Internet financial reporting and disclosure
practices of publicly traded corporations: evidence from Sri Lanka. Accounting & Taxation,
7(1), pp. 75-91.
Spence, D., 2017. How Much Should Small Business Accounting Software Cost?. [Online]
Available at: http://www.zrilo.com/blog/how-much-should-small-business-
accountingsoftware-cost
[Accessed 05 07 2018].
State Accounting Guide, 2017. What are Accounting Information Systems?. [Online]
Available at: https://www.accountingedu.org/accounting-information-systems.html
[Accessed 05 07 2018].