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Enterprise Resource Planning, 1 st Edition by Mary Sumner PowerPoint Presentation
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Enterprise Resource Planning, 1 st Edition by Mary Sumner

Enterprise Resource Planning, 1 st Edition by Mary Sumner

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Enterprise Resource Planning, 1 st Edition by Mary Sumner

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  1. Enterprise Resource Planning, 1st Edition by Mary Sumner Chapter 5: ERP Systems: Accounting and Finance © Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

  2. Objectives • Examine accounting systems within ERP • Understand ERP financial systems • Review the interrelationships among business processes supporting finance and accounting © Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

  3. Case: Atlantic Manufacturing • Inaccurate and/or incomplete paperwork produces problems • Exchange of information between departments made manually • Unable to supply quantity discount information to sales force • Lack of coordination between departments © Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

  4. Accounting Processes • Operational management level • Production of transactions • Paychecks, invoices, checks, purchase orders © Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

  5. Management Control Processes • Budgeting • Analysis of allocations, expenditures, revenues • Cash management • Cash flow analysis • What-if analysis • Capital budgeting • Evaluation tools: NPV, IRR, pay-back period • Investment management © Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

  6. Accounting Systems • Traditional • Provide operational-level software • Produce invoices, checks, statements • Financial accounting • Financial statements for external reporting purposes • Management accounting • Information on profitability © Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

  7. Accounting Systems v. ERP Modules • ERP • Information shares integrated database • Provides up-to-date information • Seamless • Creates document flow of transactions • Accounting systems • Manual or separate transfer of information • Multiple platforms © Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

  8. © Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

  9. ERP Financial Accounting Module • External reporting • Set by general accounting standards • Legal requirements • Includes accounts receivable subsystem • Interfaces with cash management • Monitors accounts and updates, handles payments, creates due date lists, produces statements • Accounts payable • Handles payments, applies available discounts to maximize profits © Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

  10. Management Accounting Modules • Internal accounting perspectives for directing and controlling operations • Information on variances between planned and actual data • Key activities • Cost center accounting • Internal orders as a basis for collecting and controlling costs • Activity-based costing of business processes • Product cost controlling for profitability analysis • Profitability analysis by market segment • Profit center accounting of individual areas of organization • Consolidation of financial data for accounting perspectives • Enable management to better allocate resources, maximizing profitability and performance • Central clearinghouse for accounting information © Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

  11. ERP Systems • Provide on-line, real-time data • Operational data • Feedback on quality and efficiency of processes • Information must be timely and specific • Used for real-time operational control • ABC data • Information on profitability and products • Real-time data • Estimates are sufficient • Strategic information • Basis for continuing improvement to operations © Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

  12. © Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

  13. Featured Article: The Changing Landscape of Computerized Accounting Systems • Define each of the “in-technologies and systems”. • What is their relationship to the success of ERP? © Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

  14. Featured Article: The Changing Landscape of Computerized Accounting Systems, continued • New types of accounting software • Fair pricing • Database management standardized • Ease of mobility • PC-based • New markets • ERPs dominate highest end • Mid-levels are SQL-based and non-SQL-based • Low-end systems range from very low end to more robust • E-commerce and e-business drive most mid- and high-level systems, as well as a few low-level © Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

  15. Featured Article: The Changing Landscape of Computerized Accounting Systems, continued • Internet-based commerce • Hottest technology • E-business • Quicken allows remote entries through Web • EDI and EFT • E-commerce • Amazon.com and on-line securities trading • Dell Computer • ERP • Internet additions • Prices decreasing © Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

  16. Featured Article: The Changing Landscape of Computerized Accounting Systems, continued • Best practices • Improve bottom line • Create air of control • Structured Query Language • Database of choice © Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

  17. Summary • Most accounting processes operate at the operational management level • Additional software enables financial and management accounting • Each department or division may operate different software and databases • ERP systems’ integrated database allow for seamless information sharing • Easier reporting • Includes all operational data and ABC data • Coordinates with management accounting modules © Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner