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.
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 report. And last section provides a reference to all the authors and papers that has been consulted in order to complete this report.
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).
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.
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.”Hierarchical Structure at Aspen Pharmacare
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
Summary and Findings
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
- 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
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
This department handles all the legal issues for Aspen Pharmacare firm. The main fucntions involved are:
- Activities related to land
- 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.
Department of Treasury deals with
- 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.
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).
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
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).
The task of effectively managing material is essential to achieve (Needleman, 2005):
- Customer satisfaction
- Maximum Efficiency during product manufacturing
- Inventory management
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
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 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.
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, supporting higher volume of transactions. And high-end accounting software will make it too complex due to its add-on management functions and also high-end accounting software are used when business size is required to serve more than one nation. Depending on these factors Mid-Level Accounting software is best suitable to accommodate all the requirements of Aspen Pharmacare Australia.
- Vast number of active, concurrent users are supported
- Able to handle large volume of transactions simultaneously
- Ensures security and integrity of the company’s confidential important data
- It delivers complex, specialized features, for example, multi-language and multi-currency capabilities, supply chain management & human resources, warehousing & distribution & wide-ranging inventory requirements, for example, bill-of material-processing and multiple costing methods.
- Creates influential business intelligence and reporting system.
All these features are the primary business requirements of Aspen Pharmacare thus it can be concluded that mid-level accounting software is best suitable according to the needs of the company (Needleman, 2005).
To fulfill the mid-end category of accounting software required for the Aspen Pharmacare a search was conducted for best software solutions provider to accommodate company’s requirements. Based on the research following vendors are best suitable for processing mid-end category needs.
MYOB is a competitor in the business of accounting software providers and within a short span it has gained sufficient growth. Their goal comprises to provide users, ability to measure business performance and accomplish goals along with tracking business financial transactions (Csebfalvi, 2012).
Their main customer focus is for mid-level category software and the major products are MYOB Revenue Management, MYOB Resource Management and MYOB Financial Management.
NetSuite, a software vendor pioneer, delivers ERP solutions and accounting solutions which could easily be customized depending upon company’s requirements (James, 2015).
NetSuite has a major focus on small to mid-end category companies and their main products are NetSuite Small Business and NetSuite ERP (James, 2015).
DacEasy provides the most diverse range of accounting solutions in business software’s industry and this makes DacEasy is one of the largest accounting software vendor company. Also, its extensive lineup of products can sometimes be intimidating and confusing. But 24 hours support provided by the company overcomes all the confusion.
DacEasy‘s customer focus is from small to mid-end category companies and some of the major solutions provided by the company are DacEasy MAS 90/ DacEasy MAS 200, DacEasy Business Vision, DacEasy Business Works Accounting and DacEasy age Accpac.
Comparison between MYOB and DacEasy Software Vendors
MYOB and DacEasy, both of them are highly popular accounting software packages which are used by various small scale and mid-scale companies in Australia. MYOB and DacEasy software are comprises of four divisions: Payroll, Inventory, Accounts Payable and Accounts Receivables wherein MYOB additionally supports the production of various MIS reports which is not supported by DacEasy (Aerts and Walton, 2013).
An evaluation process has been conducted to compare both of these software packages on the basis of following features:
Ease of Use: This is a major concern in cases when there is scarcity of resources to be allotted for the training purposes. DacEasy is easily operable and allows users navigation from one segment to another and users are free to customize the number of toolbars to be accessible on the home screen while there is one drawback that there are no descriptions attached to the icons on the toolbar (Flanagan and Juchau, 2013).
MYOB, on the other hand is structurally intuitive, the commands attached to every icon makes it easy to identify the function of each item on screen. Also the installation process of MYOB is much easier then compared to DacEasy and there is a navigation bar attached on MYOB software that provides easy access to general tools from every section of the software (Flanagan and Juchau, 2013).
Cost and Scalability: Both MYOB and DacEasy software has versions that support both networks i.e. single user at a time and multiple users at a time and the difference in cost of these software packages in about $650. DacEasy is slightly costly then MYOB (Flanagan and Juchau, 2013).
Account Receivable: DacEasy does not allow its users to email invoices or create estimation for shipping items, yet they can create backorders, invoices and manage customer lists. With MYOB users can directly email invoices to respected customers, however like DacEasy, MYOB also does not support shipping tools that can help to create estimation (Flanagan and Juchau, 2013).
Accounts Payable: Various payable tools are present in DacEasy such as Banking, Form Filling, Purchasing and Periodic MYOB supports electronic payments and helps in paying bills. There is no customization option for vendor Cheque, quotes and purchase orders in DacEasy while the only tool which is absent in MYOB is building vendor credit memos (Flanagan and Juchau, 2013).
Payroll: The sub-divisions for DacEasy Payroll category are Tax-Deposit, Management, Employees, Month, Quarter and Year-End. Payroll could be administered by the user and direct deposits could be set up for employees. MYOB supports all these subdivisions and include direct deposits set up for employees but it does not mention the status of an employee as active or inactive (Flanagan and Juchau, 2013).
Overall, both MYOB and DacEasy are proficient, but the latter would be more suitable for a small-end business. Also it does not support some of the functions which are main requirements of Aspen Pharmacare Accounting System. So, MYOB would be the best Accounting Software Package to be incorporated for accounting needs of Aspen Pharmacare (Csebfalvi, 2012).
It is user-friendly and also aids the creation of extensive variety of MIS reports. Implementing costs of this software are reasonable too and overall rating on the working of this product is quite good. Also, this is Aspen’s first time when they will be including an AIS into their systems so it is must that software is easy to use and user friendly so DacEasy could be little effort making task for the users while MYOB with its extensive user friendly interface would attract employees attention (Moehrle, and Reynold, 2011).
The processes and functions ensued by Aspen Pharmacare are of professional level and it ensures good quality and management but there is always a scope to do better and as per my understanding of the company I recommend following advices to Aspen Pharmacare:
- The format company is using for reporting costs of goods sold doesn’t look user friendly and as they are planning for an automatic system now to generate reports it is must to have it user friendly. So the company can work on it to make it little user friendly
- After an AIS system has been chosen and installed into the company, instead of expecting end users to expect to learn it on their own company must arrange proper training sessions for the staff to get friendly with the software.
Aspen Pharmacare is trying to ensure better quality and management within the organization and good and suitable AIS would help the company to achieve its business objectives. Through the study about the company it has been found that the staff at Aspen Pharmacare pursues sheer professionalism and is ready to learn new software that the company is planning to introduce to them. Implementation of this accounting software package will ensure more enthusiasm amongst its workers as it will definitely ease their work and would help them in their future endeavors.
The market today is highly competitive and to ensure a strong foot in the business it is obligatory requirement for the management to have quality information for decision making purpose. And it is believed that MYOB accounting software package is the answer to achieve all these objectives.
Aerts, W. and Walton, P. (2013). Global Financial Accounting and Reporting, Principles and Analysis, Retrieved on 17th September 2018 from https://www.workday.com/en-us/applications/medium-enterprise-applications.html.
Csebfalvi, G. (2012). Hungarian Accounting Standardization Effects, International Journal of Accounting and Financial Reporting, 2(1), pp. 83-98.
Elizabeth, K. and Richard, C. (2007). Developments in International Standards Setting: Equity Based Compensation, The CPA Journal Online, Online Issue, pg-21-24.
Flanagan, J. and Juchau, R. (2013). The Core of the Curriculum for Accounting Undergraduates An Australian Study, Accounting and Finance, Vol 23, No 2, pp. 67-80.
Ijiri, Y. (2015). New Dimensions in Accounting Education: Computers and Algorithms, Issues in Accounting Education, pp. 168-173.
James, T. (2015). Cost Accounting: A Managerial Approach, Prentice Hall, Inc.; 12th Edition.
Moehrle, S. and Reynold, M. (2011). Say Goodbye to Pooling and Goodwill Amortization, Journal of Accounting, Online Issue.
Needleman, T. (2005), Entry-level accounting provides lots of bang, Accounting Today, New York, Vol. 9(10), p. 26.
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