Computer System Integration
Kudler Fine Foods is a client of the accounting firm where you work. Kudler’s management is interested in effectively integrating technology into its business operations. They have asked you to prepare a brief detailing how computer systems might be more effectively integrated to meet their business needs and improve their accounting operations.
Resource: Kudler Fine Foods Virtual Organization found by using the Virtual Business Portal
Prepare a brief of no more than 1,400 words in which you address the following:
Identify Kudler’s key business and accounting information needs.
Analyze the strengths and weaknesses of Kudler’s current computer system and technology use, including hardware and software.
Explain what opportunities Kudler has in terms of technology and provide suggestions for improving Kudler’s ability to maximize these opportunities.
Evaluate the threats that Kudler may encounter given their current systems and offer your suggestions, in terms of using technology.
Overview of Finance & Accounting Systems
The initial Business Plan for Kudler’s included funds in excess of $50,000 to hire a consulting firm to assist in the selection and installation of a comprehensive Retail Enterprise Management System (REMS). Smith Systems Consulting was selected for the contract. After a thorough analysis, a modular and scaleable RMS was selected, purchased and installed in the first and subsequent Kudlers retail stores. Smith Consulting was also contracted on a yearly basis to maintain the REMS.
Finance & Accounting Financial Modules:
General Ledger Module:
• Chart of Accounts
• Transaction detail and roll-up by any number permutations – store, department, product, etc.
• Financial Reporting – Balance Sheet, Income Statement, Cash Flow, Trend Analysis…period over period, store comparisons, department comparisons
• Multiple year reporting
• Budgets and budget reporting down to store department level
• Few requirements for manual data entry
• Non-Financial accounts – square footage (analysis can be done on sales per square foot)…department sales and inventory; department and store headcount
Accounts Payable Module:
• Vendor codes and master files
• Check printing
• Tax and freight allocations
• Multiple bank accounts
• Purchase order module posts vendor orders directly to the AP module
• Handles international addresses necessary because of direct international purchase of items such as wine, olive oil, selected produce and cheeses
• Note…some difficulty with cash purchases…stores sometimes purchase locally grown produce in season and the growers insist on being paid in cash. Therefore each store has an impress fund to handle small purchases…in cases where the purchase is considered large…F & A is notified in advance and the store manager is provided with a check that may be cased at a branch of our bank. Records of such transactions are faxed to F & A…and then manually entered into the system.
• Captures and reports all retail sales in detail…item code, cost, price, time, station, clerk, quantity, store, etc.
• Provides data to directly to several modules…to include the General Ledger
• Handles all credit and debit card transactions to include processing to our electronic payment clearing house and our cash reconciliation module…note, 85 percent of our sales are either credit or debit transactions.
Bank Reconciliation Module:
• Handles reconciling checks, account deposits and account balances.
• Also assists in cash flow analysis by collating data from AP, AR and the Purchase Order Module.
Asset Management and Accounting:
• Module not acquired
• Stores are on long term leases and have been “built out” by the leasing company to our company specifications…to include freezers, display, temperature controlled displays, etc.
• Remaining assets are controlled and amortized using spreadsheet software.
• The power problems plaguing California had a definite financial impact thus all stores and company headquarters have installed auxiliary generators enabling the finance and accounting systems to be supported 7 times 24.
• There are no written policies relative to security of the finance & accounting systems.
• The REMS has imbedded security features…passwords, dollar limits, limited access features…however, there are no formal company policies or audits regarding same.
• Disbursements (checks or cash) over $1,000 must be approved by either the CFO or President. Over $5,000 by both the CFO and President.
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