Chapter-1

Introductory Aspects

1.1 Introduction:

Advances in information technology (IT) have transformed many firms in professional services industries, but perhaps none as much as those in the public accounting industry. Once a slow paced and conservative industry, public accounting underwent tremendous changes at the turn of the millennium, sparked largely by the rapid changes in its IT environment.

Audit software and knowledge-sharing applications are two crucial components of these changes. Automation of audit tasks and use of specialized audit software has substituted IT for labor and changed the structure of audit teams. Equally important is the use of advanced systems to share knowledge bases across different parts of the organization that has enabled professional services firms to leverage their human resources more effectively.With rapid advances in IT, numerous articles have appeared in practitioner-oriented accounting journals that discuss how to invest in IT to keep up with the current technology.

To justify an IT investment, managers need to understand the potential benefits resulting from the investment. Although there is a general perception that IT investment by public accounting firms can improve firms. Productivity, the impact of IT on firm performance is not directly observable. Public accounting firms need to understand how the technology can transform their work and whether such transformation will ultimately lead to productivity gain. While the recent IT research literature documents a positive marginal contribution of incremental IT expenditure using cross-sectional analysis across several firms, empirical evidence at the firm level has not been reported. Longitudinal analysis before and after IT implementation is important to support a causality argument leading from IT deployment to improvement in the firms productivity. This is especially of interest in a public accounting firm where information utilization is the core competence.

1.2 Objectives of the study:

General Objective:

The general objective of preparing this report is the Application of software in accounting transformation to fulfill the requirement of the course through gaining the practical experience.

Specific Objective:

The specific objectives of the study are as follows:

Io gets a general idea about the Accounting transformation.

To study the reasons responsible for application of software in accounting.

To analyze the accounting transformation and its implementation.

1.3 Methodology:

The study has been made only by one month. I tried my best to be acquainted with all the sections and departments of the organization.The relevant data is collected from the secondary sources information.

Secondary Data collected from Printing materials of Articles of various writers Library Study Magazine & Journal Website

1.4 Limitation of the study: This Research Project work was prepared carefully with full concentration to avoid any kind of misinformation or mistakes. But still like all other research work this report may also have some limitations. From my view, some obstacles in this report are given bellow: Informations are not rich enough or many update data are not available in the market. Website in different organization of Bangladesh contains poor information. Due to lack of experience, there is a chance of having some mistake in the report though best effort has been applied to avoid any kind of mistake. Recent data and information on different activities was unavailable.

Chapter 2

2.1 What is Software?

Software meanscomputerinstructionsordata. Anything that can bestoredelectronically is software, in contrast tostoragedevices and display devices which are calledhardware.

2.1.1 Application software:

An application is aprogram, or group of programs, that is designed for theend user. Applicationsoftwarecan be divided into two general classes:systems softwareandapplications software. Applications software (also calledend-userprograms) includes such things asdatabaseprograms,word processors,Web browsersand spreadsheets.Figuratively speaking, applications software sits on top of systems software because it is unable torunwithout the operating system andsystemutilities.

2.1.2 System software: Refer to theoperating systemand allutilityprogramsthat managecomputerresourcesat a low level. Softwareis generally divided into systems software andapplications software. Applications software comprises programs designed for anend user, such asword processors,database systems, andspreadsheet programs. Systems software includescompilers,loaders,linkers, anddebuggers.2.2 Accounting Transformation:Accounting transformations refer to the process of converting transactions or activities, referred to as accounting events, from source systems into journal entries. Source systems may be diverse applications. Source systems are industry specific solutions. Examples of source systems are core banking applications, insurance policy administration systems, telecommunications billing systems, and point of sales systems.

2.3 Accounting Transformation Flow Chart

When using the accounting transformation implementation process: Start with an analysis of current system. Determine which source systems have transactions or activities that need to be accounted and reported. Register the source system transactions and activities which have financial impact in the Accounting Hub to make them eligible for accounting. Create accounting rules that indicate how each of the accounting events is accounted. Group these rules together and assign them to ledgers to create a complete definition of the accounting treatment for the transactions and activities from the source system.The following figure summarizes the accounting transformation process.

2.4 Accounting Software and Integrated ERP:

Gathering all financial information in one place has never been easier withaccounting softwareand business management solutions from Open Systems. You can import all of your current financial and tax information into the system and begin tracking your income and expenses immediately. Whether your business is established or you are expanding, your Open Systems solution can be up running easily and quickly, helping you make more informed buying and selling decisions, improve customer service, save money, and ensure profitability into the future.

2.4.1 Real-Time Accounting Data and Business Intelligence:

The demands and new challenges facing businesses change every day. Whether you need to reduce costs or manage compliance mandates, you need to respond quickly to changes in your industry, all while meeting the demands of your customers. Open Systems offers you complete ERP software with a fully integratedaccounting systems- allowing you to make faster, more knowledgeable decisions by giving you a complete view of your company in real time.

These accounting applications form the core of our accounting software solution, empowering you with the ability to turn data into usable information and to perform effective analysis and reporting.

Powerful and customizable reporting Insight to capitalize onnew opportunities Adaptable applications that allow you to customize them to your business specific needs Maximized efficiency and productivity Interactive dashboards for better decision making A more affordable solution to deploy, adapt to your changing business needs, and maintain2.4.2 Accounting Applications:

The accounting applications are as follows:

Accounts Receivable Accounts Payable Accounts Receivable Payroll Enhanced Payroll Tax Reporting Direct Deposit Banking Bank Reconciliation Fixed Assets

Accounts ReceivableManage your cash, know your customers, and analyze performance and trends with Accounts Receivable. Assign active or inactive status to your customers, use drill-down functionality to see source transactions from inquiry screens, and save time with batch processing capabilities.With Accounts Receivables flexible cash flow management options, you will:

Evaluate your cash discounts program and spot delinquent accounts early. Produce timely reports to identify your best customers and stay on top of sales patterns Track every aspect of your sales and receivables in a timely manner, improve the inflow of cash, and make the most of sales trends.

Accounts PayableTrack obligations to suppliers, control cash flow, and speed data entry with the accounting applications in Accounts Payable. Produce a wide array of predesigned reports, and take advantage of the flexibility to pay all invoices, prepay selected vendors, or split invoices for payment.With Accounts Payable helping you prioritize your payments, you can:

Save time and money with the ability to review outstanding payments by vendor and select which payments to hold or release.

Improve your efficiency with quick entry and defaults on headers.

Manage your expenses efficiently and keep your accounts up to date with user-defined terms, aging periods, and cutoff dates.

Assess your financial position by producing timely reports.

Accounts ReceivableManage your cash, know your customers, and analyze performance and trends with Accounts Receivable. Assign active or inactive status to your customers, use drill-down functionality to see source transactions from inquiry screens, and save time with batch processing capabilities.With Accounts Receivables flexible cash flow management options, you will:

Evaluate your cash discounts program and spot delinquent accounts early. Produce timely reports to identify your best customers and stay on top of sales patterns. Track every aspect of your sales and receivables in a timely manner, improve the inflow of cash, and make the most of sales trends.

PayrollComplete all of your payroll processing tasks with Payroll. Track hourly and salaried employee wages, print checks, manage sick and vacation accruals, and produce timely W-2 reports.With Payroll helping you simplify payday, you can:

Maintain detailed records with clear audit trails, and keep up to date with tax law changes. Analyze payroll expenses and employee productivity to help control costs and review expense distribution. Produce detailed reports to help you plan and generate a budget.

Enhanced Payroll Tax ReportingUse Enhanced Payroll Tax Reporting with your Payroll data to get over 300 certified state and federal reports, along with e File capabilities. Automatically stay up to date with routinely changing forms.With EPTR simplifying your tax form system, you can: Easily update, download, and install new forms automatically. Save time while preparing and filing government reports. Eliminate data entry by importing information directly from your financial system.

Direct DepositSend pay directly to employee bank accounts with Direct Deposit tied into your Payroll system. Create deposits by dollar amounts or percentages, prepare normal paychecks for special circumstances, and use batch processing to post multiple payrolls within a single day.With Direct Deposit keeping employees happy, you will:

Save time by processing multiple payments per employee in one Direct Deposit run. Manage documents by saving PDF or text versions of printed vouchers. Create deposits by dollar amounts or percentages, with the ability to change at any time. Enjoy improved security with Direct Deposit vouchers, the deposit documents employees receive instead of a live paycheck; theres no chance of a paycheck being lost or stolen.BankingFrom ACH transactions to direct deposit of payroll checks, from Positive Pay support to Magnetic Ink Character Recognition capabilities, Banking provides a total solution for secure electronic banking.While taking advantage of Bankings advanced features, you can: Set up a credit card-type bank to simplify statement reconciliation; the bank tracks charges, payments, adjustments, and transfers. Reduce time and accounting errors by automatically clearing transactions with bank-provided reconciliation data.Quickly serve customers and vendors by creating and importing ACH files for delivery of electronic payments and payments received.

Bank ReconciliationReconcile bank statements and general ledger accounts with Bank Reconciliation. Track an unlimited number of bank accounts, void checks before they are sent or after they are posted, and review total debits posted to General Ledger for each period.When you use Bank Reconciliation to streamline your processes, you can: Automatically create entries in General Ledger for adjustment and transfer transactions. Define information for processing ACH payments to vendors and from customers for streamlined, simplified processing. Set up as many base and foreign currency bank accounts as you need, including routing codes for electronic payments, positive pay codes, check formats and other ACH information.Fixed AssetsFixed Assets gives you the power to analyze the tax and cash-flow implications of assets and track their valuation and depreciation. Stay up to date using the provided set of IRS-supplied depreciation tables, as well as MACRS, ACRS, straight line, sum-of-the-year digits, and declining balance recovery method support.With Fixed Assets helping you make capital decisions, you will:

Track the difference between estimated depreciable and actual service life and calculate the cost or proceeds from the retirement of an asset. Use forecasting tools to evaluate leases, amortize loans, and experiment with depreciation strategies. Meet tax reporting requirements with a full range of financial and management reports.

2.5 The Advantages of Using Computerized Accounting Software:

The introduction of computerized accounting systems provide major advantages such as speed and accuracy of operation, and, perhaps most importantly, the ability to see the real-time state of the companys financial position. In my experience I have never seen a business that has upgraded to a computerized accounting system return to paper based accounting systems. A typical computerized accounting package will offer a number of different facilities. These include:

- On-screen input and printout of sales invoices- Automatic updating of customer accounts in the sales ledger- Recording of suppliers invoices- Automatic updating of suppliers' accounts in the purchases ledger Recording of bank receipts- Making payments to suppliers and for expenses- Automatic updating of the general ledger- Automatic adjustment of stock records- Integration of a business database with the accounting program- Automatic calculation of payroll and associated entries

The main advantages of a computerized accounting system are listed below:

Speed data entry onto the computer with its formatted screens and built-in databases of customers and supplier details and stock records can be carried out far more quickly than any manual processing.

Automatic document production fast and accurate invoices, credit notes, purchase orders, printing statements and payroll documents are all done automatically.

Accuracy there is less room for errors as only one accounting entry is needed for each transaction rather than two (or three) for a manual system.

Up-to-date informationthe accounting records are automatically updated and so account balances (e.g. customer accounts) will always be up-to-date.

Availability of information the data is instantly available and can be made available to different users in different locations at the same time.Management information reports can be produced which will help management monitor and control the business, for example the aged debtors analysis will show which customer accounts are overdue, trial balance, trading and profit and loss account and balance sheet.

GST/VAT return the automatic creation of figures for the regular GST/VAT returns.

Legibility the onscreen and printed data should always be legible and so will avoid errors caused by poor figures.

Efficiency better use is made of resources and time; cash flow should improve through better debt collection and inventory control.

Staff motivation the system will require staff to be trained to use new skills, which can make them feel more motivated. Further to this with many off-the-shelf packages like MYOB the training can be outsourced and thus making a particular staff member less critical of business operations.

Cost savings computerized accounting programs reduce staff time doing accounts and reduce audit expenses as records are neat, up-to-date and accurate.

Reduce frustration management can be on top of their accounts and thus reduce stress levels associated with what is not known.

The ability to deal in multiple currencies easily many computerized accounting packages now allow a business to trade in multiple currencies with ease. Problems associated with exchange rate changes are minimized.

2.6 Case Study of Application of Software in accounting transformation in Bangladesh:

Process Automation of Postal Department of Bangladesh

Post Office is committed to provide universal access to basic postal service in the country at an affordable price. Its objectives are to ensure availability of basic postal services in all parts of the country, including tribal, hilly and remote areas and the role of post office is undergoing transformation, as electronic mail and new technology supplement traditional postal activities. Post offices are increasingly adopting new business that helps to optimize its retailing strength, by providing a range of public utilities and new financial services that are relevant to the socio-economic needs of Bangladesh. It is also simultaneously under process upgrading traditional services through induction of technology and introducing new products and services in order to meet the challenges of providing faster, more reliable and more responsive services to the customers in the face of increasing competition from the private courier industry and continuing advances in communication industry.

The present condition of the service delivery process of BPO is very miserable. At present, all the activities of BPO is performed manually. As a result, customers have to form que at the counters. Postal staffs have to prepare long lists and documentation takes a lot of time and records relating to mail receipt, transmission and delivery and further tracking and tracing takes huge time.

This project has four components - Web based Application S/W, Connectivity, Hardware and Software. The proposed web based application software will have Post Office Counter Automation, Automation of Post Office Treasury and Sub-account, Delivery System and Performance Analysis, Accounting Information and other Information Flow Management and Track and Tracing for registered inland and foreign articles modules, which run in LAN and WAN. LAN configuration is required for 84 offices/locations. Each and every office need server, computers with LCD monitor, UPS, printers, switch, AC for server room, receipt printer for counter, table, chair, ribbon / cartage, barcode scanner and barcode label printer for capturing barcode article number and External modem for internet connectivity. These are the minimum Equipments & Machineries for automation of GPOs, HPOs and M&SOS.

Almost all of the countries are now using modern computer technologies for delivering services to the customers and using this computer based technologies is saving substantial amount of man hour in record preservation, tracking and tracing.Against this backdrop, Bangladesh Post Office (BPO) aims at delivering modern postal services at postal counters, postal treasury, postal mail centers, post office savings bank and postal life insurance using customized software and modern technologies keeping abreast of the postal services of the developed world. This project has been prepared for this purpose.

Objectives:

The objective of the proposed software is to provide state of the art software solution to help the Postal Department for computerizing all the activities performed by a Post Office Counter as well as back office. Specially, the aim is to:

i) To improve postal service for business and domestic customers through greater choice, better quality and falling real prices.

ii) To equip the Post Office with technology to meet the challenges of the changing postal market both domestically and internationally.

iii) To support viable network of post office so as to ensure nationwide access to a range of public and private sector service.

iv) Post Office Service Charter into practice.

v) Provide high-secured network.

vi) Provide an efficient software solution based on Client/Server architecture that will reduce the paper work considerably in the Post Office and also eliminate the superfluous data entry.

vi) to enhance tracking and tracing facilities provided by BPO.

vii) Building capacity for large data management and record keeping.

Targets:

i) To improve postal service for business and domestic customers through greater choice, better quality and falling real prices.

ii) To equip the Post Office with technology to meet the challenges of the changing postal market both domestically and internationally.

iii) To support viable network of post office so as to ensure nationwide access to a range of public and private sector service.

iv) Post office Service Charter into practice.

v) Provide high-secured network.

vi) Provide an efficient software solution based on Client/Server architecture that will reduce the paper work considerably in the Post Office and also eliminate the superfluous data entry.

vii) To enhance tracking and tracing facilities provided by BPO.

viii) Building capacity for large data management and record keeping.

Outputs/Outcomes:

After completion of the project, the following outcomes will accrue:

1. Registration time of letter and parcel mails will be reduced.2. Service delivery process to customers will be mechanized and easier.3. Ensuring delivery of mails to customers4. Introduce barcode system on mails5. Money deposited by customers at post offices will be displayed at the counters through computer screen6. Money deposited at postal treasury will be constantly monitored through computer7. All the financial transactions of post offices throughout the country will be included in the records of postal treasury, which will be monitored constantly.8. Fraudulent actions of post offices will be prevented9. Postal service and postal accounting will be performed efficiently for customers and for this purpose other institutional facilities of post offices will be ensured.10. Customers will be able to receive the service within fraction of time now taken to deliver the service11. The accounts of money deposited by customers as postage / fee will be preserved at the postal treasury immediately, which will result in prevention of fraud12. Customers will get computerized receipts13. Where applicable, customers will get bar-coded receipts, which will enable them to track and trace the transmission and delivery of mails from anywhere anytime.14. Service delivery time will be reduced to one third for post office savings bank transactions15. Frauds that occur in the presence of the conventional system will be eliminated16. Accounts will be preserved and kept immediately at different places17. Data will be preserved in the computer data bank, which will help generate information and report of specific formats at any time.18. Accounts of all Head Post Offices will be preserved in the central server through integrated software and all accounts entered into the computers will be accessed immediately and there will be no scope for manipulating these accounts.Besides other facilities will be available after implementation of the project.

Chapter 3

Recommendation: Define a maximum of five segments for a supporting reference. Assign different sources to each segment. Assign only one source from the same accounting event class and application to a supporting reference segment. Assign only supporting references with header level sources to the header level of a journal entry rule set. Assign supporting references with header and line level sources to the line level of a journal entry rule set. Select the balances option in the definition of the supporting reference, to have balances only maintained when the supporting reference is assigned at the line level. For supporting references for which balances are maintained, you can specify whether the balances at the end of a fiscal year are carried forward to the next fiscal year.

Conclusion:The coming changes to accounting will present companies with substantial business challenges. Although there will be no real change to their economic condition, the increase in assets and liabilities may affect some companies credit rating or require changes to loan covenants. Recording and tracking leases will become a greater burden than before in some cases considerably so. Therefore, it would be great if vendors could provide a low-cost, low-maintenance application to help corporations and their finance departments manage leases, reduce workloads and ensure accuracy.

References: www.google.com www.robertkugel.ventanaresearch.com www.docs.oracle.com www.infosys.com www.itbusinessedge.com

Term paper of BBA, Dept: Accounting, PUCPage 9