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Current Role Accounting Information Systems

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Discuss About The Current Role Accounting Information Systems?




B bakery is the family owned business organisation that is indulged in producing the bakery items such as cakes, pastries, breads and other items of similar nature.  The business is in existence for more than 50 years and has a workforce of around 70 people. It also has a drastic growth in sales due to increased demand of its products in the market. The firm has only one accountant to handle all its accounting related operations. Therefore, it is looking forward to the implementation of accounting information system in the business. AIS is the software program used in managing the accounting and other related functions of the business without any manual intervention. These systems assists the business with its accuracy and efficiency of operations. There are number of accounting software available in the market these days but the bakery organisation has to select an appropriate program for its business on the basis of its needs and size of business.


All about baker and bakery business processes

A baker is a person who is involved in the business of preparation of bakery items such as cakes, bread, pastries, cookies etc. These items are then sold and distributed in the potential markets such as departmental stores, confectionary shops, restaurants for their ultimate consumption. A baker can also sell his bakery products directly to the ultimate consumers in the case when he is carrying on the business on retail basis. There are a number of activities involved in the bakery business such as requisition of raw material and the other necessary items, production process, selling and distribution activities etc. However, there is no specific set of activities that are undertaken in the bakery business. The activities and processes that forms part of bakery business varies depending upon the size and nature of business. Few processes that could commonly be recognised in every bakery business whether it is conducted on small medium or large scale are explained below:

  • Supply Chain Management:

It involves purchasing and storing the raw materials that are necessary to prepare cake and other bakery items. Along with raw material a bakers also requires machines moulds and other types of equipment to run their business.

  • Production Activities:

It involves conversion of raw materials i.e. the ingredients into final products such as cookies, cakes etc. using different recipes and techniques of production.

  • Packaging Process:

Once the production process is completed the produced goods are required to be packed in the suitable containers and boxes so that proper distribution of bakery items could be made.

  • Branding and labelling:

Brand helps the business in providing it the unique identification in the market. The bakery items produced by any bakery organisation needs to be stamped by its own brand in order to be recognised differently from its competitors. Labelling includes putting up necessary information about the products on the packages such as the description of its ingredients, the quality mark, the price of the items, management and expiry date etc.

  • Logistic management process:

It is the process which includes the storage and warehousing of produced bakery items and also includes practices to support order management.

  • Selling and distribution process:

To sell whatever manufactured and produced is the ultimate motive of bakery business. Hence, it sells out the produced bakery items in various target markets using different channels of distribution.

  • Marketing activities:

Marketing is undertaken to create awareness among the potential customers about the new bakery products that the company produces. It is sometimes done with the motive of promoting the existing product in the market so as to gain a competitive edge over competitors.

  • Human resource management process:

The human resource management process is undertaken with the objective of recruiting and training the employees for the company and managing their payroll functions.

  • Accounts and finance:

Accounting process includes recording of all the significant accounting related data in an organised form to be represented as relevant information. It also includes arrangement and deployment of the funds to run the basic operations of bakery business. Accounting operations include management of accounts payables and receivables, maintaining the fixed assets and calculation of depreciation there upon etc., payment of various expenses such as utility bills and rents bank interests.

  • Research and development:

This process is undertaken with the aim of exploring the possibilities of business expansion with new bakery products and the new markets. It also covers defining new product recipes and techniques to prepare bakery products.

  • Administrative process:

It includes all the back office functioning which are miscellaneous in nature. Like maintaining the petty cash, conducting meetings etc.

The processes that are indispensable to be performed in the bakery business are as followed:

  • Purchase of raw materials and machines:

Without ingredients a bakery business cannot start its basic functioning of producing different bakery items. Hence, this process is indispensable for every bakery business.

  • Production of bakery items:

Producing the required bakery items is necessary as without producing them the business would not have anything to sell and distribute.

  • Packaging of bakery items:

As the produced items are edible in nature, they require proper packaging so as to preserve and protect them and for the effective transportation thereof.

  • Branding and labelling

This process enables the business in delivering the appropriate information to its potential customers it is necessary to be performed.

  • Selling and distribution:

This is the important process as it involves the sales function for all the output produced by the bakery organisation. The distribution is carried out through various mediums depending upon the suitability of business.

  • Logistic management:

When the business produces certain range of outputs there arises a requirement for their storage so as to keep them readily available anytime when demand arises. The manufactured goods are thus stored in the company’s warehouses where they are kept safely. This process also helps business in determination of appropriate level of inventory to be maintained by the bakery operations in order to avoid excessive warehousing and other costs of carrying inventories.

  • Human resource management

As bakery organisation may involves few or more workforce to handle the bakery operations such as the chefs, deliveryman and the other necessary personnel. This process is important for their recruitment and trainings and to manage their payroll functions (Rosemann & Brocke, 2015).

All the above mentioned processes are interdependent to each other and hence requires to be operated in harmony (Jeston & Nelis, 2014). If failure occurs in the functioning of a single process, the overall performance of the organisation will be hindered. Hence, the business manager must strive to promote coordination among all the key processes of the organisation in order to take the business to the next level of growth and success (Jeong et al., 2013).


Outcome required from the above explained processes

Outcomes are the ultimate results delivered by the business processes. Every process in the business is carried out for some goals and targets. Following are the desired expected outcomes from the processes of the business:

The purchase function is aimed at obtaining the top quality raw materials and other items necessary for the bakery business on time so as to initiate the production process on time. Moreover the purchases must be made in the cost effective manner without excessive deployment of funds of company. Purchase function must enable the business in anticipating the product demand before ordering the raw materials from the suppliers. It will also identify the potential suppliers of ingredients required by the organisation.

Production process must be able to produce the required items on the timely basis with the minimum possible cost. The process of production must be undertaken in such way that it avoids the excessive wastage of necessary resources of business. It has a goal of effective and efficient utilisation of company’s resources while converting inputs into outputs.

The logistic management process must enable the business to determine the correct and economic level of inventories to be maintained by the bakery organisation so as to avoid unnecessary carrying cost of the bakery items and the stock-out positions.

Marketing and promotion process must help the business in identifying the target market and to make the business able to reach the potential customers of bakery products.

Selling and distribution must bring in the maximum revenue for the bakery business by selling the produced items in the most profitable manner.

Accounts handling process must be provide the business with the necessary record maintenance with accuracy so as to fulfil its financial reporting requirements. The finance process must make the deployment of right amount of funds in the right place at the right time so that with the least cost of finance highest returns can be earned (Toth, 2012).

Human resource function should bring the competent and skilled personnel to the business so that their efforts can contribute the organisation’s success.

Accounting Software Features

Possible features an accounting software must possess to achieve the enterprise’s I.T. investment:

The accounting software must provide the accuracy in whatever functionality it performs. As it processes the accounting data which may be sensitive to the organisation, it must provide the secured enough to carry the information that is critical to organisation’s success. Moreover, the accounting software must be sufficiently compatible for the devices of the company so that the functions performed by it would not get hampered by the company’s use of different devices (Dimitriu & Matei, 2014). These software program must be easy to implement, use and maintain for the user so that they do not have to invest so much of time and efforts for to understand and work on these programs. Furthermore, the functions provided by the accounting software must be performed on time by speedier transaction processing in real time so that the relevant and significant actions and decisions could be taken on time (Ghasemi, et al., 2011).

Automated invoicing: This feature enables the business with automatic invoice issuance to the customers whenever the payment is due from them. This feature will help in avoiding delayed collection of receivables from the debtors of the company.

Payment reminders: This feature works as an alarm by reminding the business managers on regular basis for all the payments due on them either via e-mails or messages so that timely payments could be made without any penalties and interests.

Bank reconciliation: This function plays an important role as it enables the business managers to tally the account balances which involved banking transactions with the bank statements on a regular basis.

Payroll functions: It is used to calculate the basic wages and salaries to be paid to the employees of the company. It also maintains the records of attendance as well as leaves taken by the employees of the company.

Reporting and analysis: This feature helps the businesses in adhering to the financial reporting requirements as prescribed by various regulatory bodies. The accounting software follows the basic rules of accounting while processing the accounting data. This feature also enables the business in making the analysis of all the relevant data so that proper comparison of company’s financial results can be made.

Tax calculators: It is used to report to various fiscal bodies like income tax department, service tax department etc. about the tax obligations of the firm. With the help of this feature a business manager can comply with all the statutory requirements with accuracy. This features calculates the tax amounts under various statutes in accordance with the amended tax structures.

Budgeting and projections: This function is used to make projections about the subsequent periods for the business in order to comply with the terms and conditions of providers of finance. Budget functionality helps to provide the business managers an estimation of cash outflows and inflows a business would make based on the previous trends followed by the business.

Depreciation calculator: This feature will assist the business managers in determining the correct amount of depreciation required to be charged to entity’s fixed assets to provide for the obsolesce and wearing out of various machines and equipment. Accounting software calculates the depreciation in accordance with the recent most reforms in this context.

Payment processing: This feature automatically updates the account balances when the amounts are directly paid or received in the bank accounts by keeping track of all the banking transactions thereby avoiding the risk of misstated account balances.

However, there is no inclusive list of accounting features that a software must provide in order to be called as appropriate one. The business managers must analyse its own requirements bearing in mind the business it is dealing in and in accordance with the demands and requirements of the business they must select a suitable accounting software for their business.


Category of accounting software that is suitable to the business of B Bakery:

Accounting software are the computer programs that aids the business in handling its accounting operations by the innovative and robust features that works on automated basis. In general, there exists three categories of accounting information software (Baxter & Thibodeau, 2011). First one is the entry level software which is suitable for low level enterprises, second is small to medium sized software which is suitable for middle sized firms and the third is enterprise accounting software which is suitable for large sized firms (Romney & Steinbart, 2012).There are various factors on the basis of which the accounting software are so bifurcated in the three categories (Al-Hiyari, Mashre & Mat, 2013). Few of them are: the size of the firm, the number of users, preferred functionalities, and the cost of the software (Ismail & King, 2014). As given in the case, business of B Bakery involves around 70 employees and generating a revenue of more than $13.5 million per year hence it can be said that its business is small to medium sized and therefore medium level of software will be appropriate selection for B Bakery. Small to Medium level accounting software allows up to 25 users to work on the software system simultaneously. It performs the financial functions as provided by the entry level software and along with that it additionally performs non-financial functionalities such as inventory management, management of purchase and sales functions, human resource management etc. The medium level software are more costly than the low level accounting software but much cheaper than high end Accounting information system (Gelinas, Dull &Wheeler, 2011). As the business of B Bakery does not only require financial functions relating to revenue generation, to be performed but also requires other functions like management of payroll, inventory, accounts payables and receivables together with the sales and purchase functions. However, since the size of the firm is not too large it must not invest its funds in paying for the unnecessary features as provided by high end accounting software (Salehi, Rostami & Mogadam, 2010).

Comparison Table of XERO & MYOB

Comparison of XERO and MYOB accounting software for small to middle sized firm:




Better option


Invoice is sent directly to the customers and provides the features of customisation to the invoice formats.

Invoice is sent directly to the customers and provides the features of customisation to the invoice formats.

Both performs almost similar functions However, invoice customisation is more flexible in XERO.


It can run multiple reports at a time.

Only one report can be processed in one go.

Therefore, XERO is better than MYOB.

Inventory management

It includes functions like basic tracking of inventory and its management thereupon.

It only provides basic inventory tracking features. Management of inventory is provided merely in the case of Account Right MYOB.

XERO is better as it offers integration with the third parties which makes it more flexible than MYOB and also it is user specific in terms of needs.

Foreign currency

Multicurrency is supported by XERO on the basis of premium subscription.

MYOB does not support multicurrency transactions.

XERO is preferable.

Technical online support

It provides online documentation, user training videos and online community to resolve the queries.

It also provides the online training videos, user manual documentation and online community.

XERO is preferable than MYOB as XERO has simplified tier structure which makes support more helping and understanding.

End of financial year Data Rollover

For XERO data is perpetual and hence need not to be closed for every financial year.

For MYOB Account Right data requires two separate roll over functions at the end of every financial year. One for accounting and other for payroll (P?curari & Nechita, 2013).

XERO is preferable as the rollover requirement of Account Right MYOB is quite cumbersome.

Employee login

It includes a feature called ‘my payroll’ which allows employees to enter their timesheets, request for leave sanction, view their own play-slips (Walther, 2013).

MYOB provides a featured called ‘your pay’ which also allows them to enter timesheets, can request for the leaves and also can view the pay-slips.

But MYOB Account Right provides no employees login.

XERO is better.

Selection of suitable accounting software:

On the basis of above comparison XERO can be selected:

As accounting operations does not form part of revenue generating activities of business, these functions can be handed over to such software since they provide the best business solutions with the help of artificial intelligence (Darvasi et al., 2011). The accounting information software requires investment of considerable amount for one time so as to receive its benefits for the long term. Therefore, the business managers must make a detailed study of all the possible software before selecting one (Ivancevich, Ivancevich & Elikai, 2010). Accounting software for small to medium sized firms must be able to perform functions relating to the financial transactions such as general ledger functions, management of accounts payables and receivables, payroll functions, maintenance of adequate level of inventory etc. (Christauskas & Miseviciene, 2012) (Warren, Reeve & Duchac, 2013). B Bakery can consider investment in XERO software as it is suitable for its key business functions. Following are some prime reasons to select XERO:

XERO is developed and designed in such a way that the new users would not find it difficult to work on this software. It also provides the best technical supports also to answer the queries of the users of the software (Pulakanam & Suraweera, 2010). Hence, the employees of the company does not require heavy trainings before starting to use such software. Thus XERO helps in avoiding the huge training costs for the novices.

XERO helps in simplifying the complex information by interpreting it easily. Complex data is difficult to be understood by the users of financial information thus the accounting software removes the complexities of data by processing it appropriately (Soudani, 2012)

Inventory of the business could also be managed adequately by using the XERO accounting software. It assists the business in tracking the inventory that is kept in various warehouses of the company (Lim, 2013). So that the business may account for the total stock that is lying in its stores. This function enables the business manager to avoid the overlapping cost of inventory maintenance by controlling the multiple stocking of the inventories.

The invoicing process of XERO software is also easy as it provides the facility of invoice layout customisation as per the needs of the business (Seethamraju, 2012).

Financial reporting and other business reports can be drawn with an ease as XERO prepares easily understandable reports. The reports are prepared using the raw data provided by the entity (Grabski, Leech & Schmidt, 2011).

Bank reconciliation feature provided by the XERO accounting software will enable the business managers to match the account balances with the bank statements by identifying the reasons of deviations and making corrections thereon.



From the above research about the business of B Bakery it can be well concluded that the business is small to medium sized keeping in mind the level of revenue and the number of employees it has hired. Hence, it is difficult for the firm to continue with the manual system of accounting using the services of a single accountant. The firm therefore requires an appropriate accounting information system for its business. However, implementation of such software program involves due consideration of several factors as it is a one-time investment which entails long term benefits. B Bakery must make a detailed study of suitable software available in the market and select the one which is best suited to the business of bakery.



Al-Hiyari, A., AL-Mashre, M.H.H. and Mat, N.K.N., 2013. Factors that affect accounting information system implementation and accounting information quality: A survey in University Utara Malaysia. American Journal of Economics, 3(1), pp.27-31.

Baxter, R.J. and Thibodeau, J.C., 2011. Does the use of intelligent learning and assessment software enhance the acquisition of financial accounting knowledge?. Issues in Accounting Education, 26(4), pp.647-656.

Christauskas, C. and Miseviciene, R., 2012. Cloud–computing based accounting for small to medium sized business. Engineering Economics, 23(1), pp.14-21.

Darvasi, D., Badescu, A., Dobritoiu, C., Molnar, F. and Slavici, T., 2011. Accounting Software Using Expert Systems. In Proceedings of the fifth Wseas International Conference on Business Administration (ICBA'11) Puerto Morelos, Mexico (pp. 97-102).

Dimitriu, O. and Matei, M., 2014. A new paradigm for accounting through cloud computing. Procedia Economics and Finance, 15, pp.840-846.

Gelinas, U.J., Dull, R.B. and Wheeler, P., 2011. Accounting information systems. Cengage learning.

Ghasemi, M., Shafeiepour, V., Aslani, M. and Barvayeh, E., 2011. The impact of Information Technology (IT) on modern accounting systems. Procedia-Social and Behavioral Sciences, 28, pp.112-116.

Grabski, S.V., Leech, S.A. and Schmidt, P.J., 2011. A review of ERP research: A future agenda for accounting information systems. Journal of information systems, 25(1), pp.37-78.

Hall, J.A., 2012. Accounting information systems. Cengage Learning.

Ismail, N.A. and King, M., 2014. Factors influencing the alignment of accounting information systems in small and medium sized Malaysian manufacturing firms. Journal of Information Systems and Small Business, 1(1-2), pp.1-20.

Ivancevich, S.H., Ivancevich, D.M. and Elikai, F., 2010. Accounting software selection and satisfaction. The CPA Journal, 80(1), p.66.

Jeong, J.S., Jeong, H.N., Ko, K.H., Moon, J.H. and Kang, H.G., 2013. Success Factors of Paris Baguettes Bakery financial Business. Asia Marketing Journal, 15(2), pp.1-27.

Jeston, J. and Nelis, J., 2014. Business process management. Routledge.

Lim, F.P.C., 2013. Impact of information technology on accounting systems. Asia-pacific Journal of Multimedia Services Convergent with Art, Humanities, and Sociology, 3(2), pp.93-106.

Mageto, J., 2017. Accounting Softwares in Australia. An Overview.


P?curari, D. and Nechita, E., 2013. Some considerations on cloud accounting. Studies and Scientific Researches: Economic Edition, 18, pp.193-198.

Pulakanam, V. and Suraweera, T., 2010. Implementing accounting software in small business in New Zealand: an exploratory investigation. Accountancy Business and the Public Interest, 9(64), pp.98-124.

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Soudani, S.N., 2012. The usefulness of an accounting information system for effective organizational performance. International Journal of Economics and Finance, 4(5), p.136.

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