Question

Scenario Information

BeGood Baking Supply is a small bakery supply company formed as a closely held corporation. The company supplies raw baking materials, paper goods, and equipment to restaurants and bakeries in three states in the upper mid-west. Most of its business, however, is located in a large metropolitan area. BeGood wants to increase its presence in the region and serve five states. In fact, the owners of BeGood would like 75% of their business to come from throughout the region rather than the current metropolitan area. In order to do this, the owners understand they must diversify offerings and lines of business. Currently, BeGood has a phone center where customer orders are taken; these orders are then sent to shipping where the order is filled in its large warehouse and shipped within four days. BeGood outsources its shipping to a local trucking company. Once the order ships, all paperwork goes to the accounting department where it is entered into the accounting system. BeGood still uses the same accounting system it has used since the inception of the company. All aging of receivables and other analysis is done using Excel spreadsheets. Purchasing and tracking of inventory are done solely by the warehouse manager. Invoices for inventory purchasing are sent to the accounting department when goods are received. The owners at BeGood are wondering how they can utilize an online presence and further automate its systems in order to facilitate its growth and diversify its business. The owners may also like to expand into the retail business. You have been hired as a full-time staff accountant at BeGood Baking Supply and have been given the task of evaluating and recommending a viable accounting information system for the accounting and financial data of BeGood in order to facilitate expansion and diversification. As you begin your research, you realize that many departments are involved in the information system, and communication is key.

Instructions

After attending the board of director’s meeting, you learn the company is considering expanding into Canada and becoming a multinational corporation. In a memo to the board chair, discuss how multinational corporations have to set up an AIS with their foreign subsidiaries to provide the accounting information needed to plan, control, evaluate, and coordinate all business activities including government regulations and political climates. Also, summarize the issues that must be addressed regarding the company going multinational, and how that impacts the AIS for the company.

Answer 1

The report is on

• The Value of AIS and how it can benefit Be Good
• Current State of AIS for Be Good followed by it's viability.
• Changes that are required in the current AIS of Be Good and the road thereon.

In order to know that value of AIS we should first understand the features of AIS that makes it different from the traditional accounting system.

• AIS helps a firm to maintain it's books of accounts with ease and without any issues. It acts as a monitoring system of the books of accounts as it gives a fair and clear image of the books of accounts of a firm. Hence Be Good can manage it's resources well without any errors and in an effective manner.
• AIS provides insightful information about operations and to make proper decisions about resource allocation. Be Good can make a comparison of the products in terms of increasing sales.
• AIS provides accurate and reliable information. The outcome of a business is greatly dependent on the level of information that it's books of accounts show about it. Be Good can use AIS in order to grow it's business and sales. It will through light on the faulty areas of the firm and thereby the managers can look into the reason for low figures.
• Cost Effective and Free from errors: Use of computerised systems of accounting is always a plus point as chances of errors of calculation is minimized and effectiveness is increased. AIS is cost effective and hence it does not increases the load of costs on part of the firm.

Current State of AIS for Be Good followed by it's viability.

The accounting records of Be Good are manually maintained and hence to fetch the Current State of AIS is not viable. Also the firm is planning to expand it's operations e commerce can do wonders and act as a good platform for the advertisement of the firm. The current AIS is not accessible as it is manually maintained and there is manual generation of some important reports like the reports on ratio analysis of the firm.

Changes that are required in the current AIS of Be Good and the road thereon.

Be good has to make many changes in it's current AIS some of which are listed below:

• The manual maintaining of the books of accounts have to be given up and Be good has to jump on the computerised AIS system for increased performance.
• Since AIS in the computerised form is an affordable software Be good should definitely go for it.
• Internet connectivity on the end of Be Good should be established because when the firm will expand it's operations to other nations manual maintaining of accounts won't work as important information has to be passed on which cannot be done without internet .
• If AIS in computerised form is adopted then the chances of happening of errors is minimal and if some important entries are to be searched it can be done at an ease.