Memorandum
Date: September 30, 1998
To: Anthony Iovino, Vice President
From: Matt Summers, Network Administrator
Subject: Proposal to investigate and form a plan of action to eliminate paperwork bottlenecks in our operations by implementing a new computerized accounting system.
Branstrator Corporation has been in business for nearly 80 years. During that time, people and product have changed a great deal. However, the accounting system has changed only superficially. Although the current network and accounting package are an integral part of day-to-day operations, it lacks certain necessary features. It is slow, awkward, and no longer supported by the author. In addition, many accounting procedures are duplicated—once on the computer and once again on paper. This is due to two reasons; a lack of features of the accounting package and a reluctance to rely completely on electronic methods. In effect, this nullifies most benefits that are gained from the automation and accuracy of a computerized system. It would seem that it’s only advantage is a convenient way to produce reports.
Specific examples
follow:
1) All invoices are first entered into the computer system and the original is filed away into storage. This alone would be sufficient but when it comes time to pay the invoice, the accountant must find the original and attach a copy of the check. The paperwork is now re-filed into the vendor’s master invoice file. Another copy of the check is placed into a separate file, ordered by check number. When the original checks are returned from the bank, they are filed in an entirely separate location.
2) Accounts receivables suffer from the
same inefficiency. There is an excess
amount of backup paperwork involved.
Nearly five times the amount of effort is required to perform an
equivalent task. When an invoice is
printed, two copies are sent to the customer with the invoice. The third copy is filed alphabetically by
customer name and the fourth is filed by the date billed. When an invoice is paid, the two halves must
be found, and stapled together. The
invoice is “paid-out” in the accounting system. Next, the accountant writes “paid” and the current date on the
two copies of the invoice. Finally, the
copies are split up again. One is flied
in the customer master file, and another is filed in the salesmen commissions
file. Commission tracking is provided
by the accounting system but it is not used because management doesn’t like the
format of the reports.
3) Order entry is extraordinarily time
consuming and tedious. First the
customer faxes in an order. Two copies are made. The original paper is filed in
the customer’s temporary order file while one of the copies is given to the
order entry clerk. The drafting
department may use the third copy to design a layout for the product. After the order is finalized, the order
entry clerk re-types the order to give to the factory supervisor for the
creation of a pick-list. Finally, the
order is entered into the computer system as an order.
4) Managing the Bills of Material (BOM) is another exceptionally tedious task. The task of updating a single item in a product line should be simple with a computerized accounting system, however that is far from the case. Often it will take a data entry clerk a day or more to make a simple modification. This makes it very difficult to modify our product line, either extensively or as a small modification. Errors in data entry cause lost time when supplies are not ordered and money is lost when our product is not priced correctly.
The objective of my project will be to prepare a report that investigates and discovers the major bottlenecks in our current operating procedures. The report will specifically point out the costs and benefits of implementing a new computerized accounting system and local area network to eliminate these redundant operations. Additionally, it will examine the issue of duplicating data entry, which costs time and labor and destroys accuracy.
PLAN
1) Interview employees to discover the tasks that they perform that are the most redundant and time consuming. Determine which tasks would benefit the most from streamlining and automating the process.
2) Review the operations that require the most attention and determine how they might be improved by the appropriate accounting system. If the bottleneck involves duplicate paper work, determine how it can be eliminated.
3) Review our accounting needs and select the accounting package that provides the most features that we require. Attention will be paid to:
· Ease of use
· Features
· Ability to be customized to our needs
· Support
· Manufacturer’s support policy
4) Layout the network topology to maximize data throughput and to minimize costs of an upgrade path for future expansion.
5)
Examine the need for training seminars, workshops, etc.
October 9, 1998: Interviews with employees in the accounting department
October 16, 1998: Determine how the most time consuming
tasks may be simplified by either a procedural change or by a new accounting
system
October 20, 1998: Compile a primary list of accounting
software packages
October 30, 1998: Narrow list of packages-- a thorough
investigation of the resources provided will be completed.
November 8, 1998: Meetings conducted with accounting
department to determine if the software does provide the functionality that
they require
November 10, 1998: Final decision of software
November 12, 1998: Design of network complete
November 25, 1998: Submission of final report
Few resources will be required to prepare this report. Aside from the labor costs associated with the accountants and me no other costs will be incurred.
The report is
intended to examine inefficiencies in current operating procedures involving
the accounting department. Branstrator
Corporation will then know what areas need improvement and a possible plan of
action will be presented. Given this
knowledge, we will have the ability to decrease overhead, increase accuracy and
customer satisfaction, and maximize profit.
1)
Interview with Branstrator Corporation accounting department
employees:
Nichole Summers, Teresa Williams,
Keith Menze
2)
Network Plumbing:
Routers, Proxies, and Web services
Anthony Northrup, IDG Books, 1998
3)
Financial Accounting
Harrison & Horngren, Prentice Hall, 1996
4)
Employee Procedures:
Order Entry, Invoicing, Accounts Receivable
5)
Current accounting system
Great Plains Accounting