Radisson hotels and resorts - Essay Example

Accounting Systems Accounting plays a very crucial and essential role in every trade, business and A lot of people is under the assumption that accounting is similar to book-keeping, but in actual sense, book-keeping is just a subset of accounting. So, what is accounting Accounting is a system that provides quantitative information about finances. ("The Free Dictionary" by Farlex). Accounting covers a wide range of tasks from updating and maintaining of accounting records; recording of business transactions; accounts balancing and reconciliation; accounts reporting amongst others. An accounting system is in short, an information system that facilitates the process of accounting: bookkeeping (recording), classification, reporting and interpretation of business transactions. In the conventional form of accounting (manual accounting), multiple books are being kept for different tasks/different accounts and this resulted in data duplication. As with data duplication: increased data means increased possibilities of errors; updates to data has to be ensured that all the matching records are updated- otherwise it will result in data being out of synchronisation. Manual accounting is a very labour intensive and time consuming process. However, the modern day technology has brought about various accounting systems that optimise the accounting process, resulting in greater efficiency and increased effectiveness. The automated accounting systems also promote a higher level of accuracy and tighter security. This paper is written based on the implementation of SAGE ACCPAC accounting system by the Radisson Hotels and Resorts. Brief Overview: Radisson Hotels and Resorts (Carlson Hospitality Worldwide) Radisson Hotels and Resorts operates, manages and franchises over 430 hotels and resorts, in 59 countries. It is part of Carlson Hospitality Worldwide whose parent is Carlson Companies, Inc., one of the largest privately owned corporations in the United States. As their hotels and resorts were using a wide variety of accounting systems, it resulted in reduced efficiency and higher operational cost. It was also more time consuming and staff intensive to consolidate the financial data from the different systems. These prompted Radisson to sought for a better solution to integrate their financial systems. (ACCPAC International Inc, 2002) SAGE ACCPAC ERP (formerly known as ACCPAC Advantage Series ) Sage ACCPAC ERP is a sophisticated, robust accounting and operations system. Radisson opted to implement the Sage ACCPAC with ACCPAC online. The ACCPAC Online provides the same power and flexibility as SAGE ACCPAC, and has an additional benefit: complete accessibility to the accounting system through a standard web browser. Because Sage ACCPAC ERP is very robust, its capability can be extended to be more than just an accounting system. Sage ACCPAC has built their software solution in a modular design, which means, customers can 'mix and match' the modules to fit to their needs. Radisson's customised solution is a combination of the following Sage ACCPAC modules: General Ledger Accounts Payable Accounts Receivable Inventory Control Module Purchase Orders Module Payroll Module General Ledger Module The General Ledger module is the main module (foundation) of any accounting system, and therefore, understanding the capability of this module is the most important. This ACCPAC General Ledger module fully integrates with the other ACCPAC advantage Series modules. It offers a flexible account structure, and budgeting capabilities. It is also used to generate financial reports, and provides the ability to drill down to originating transaction in other modules such as Accounts Receivable and Accounts Payable. Accounts Payable Module The Accounts Payable module provides a set of accounting and reporting features to manage the detailed information such as vendor record, transaction processing, flexible cash disbursement and full check reconciliation. The database is designed in a way where user can access the Accounts Payable from General Ledger with ease. Accounts Receivable The Accounts Receivable module allows the management of outstanding balances. It has powerful flexible invoice and cash processing, and is also fully integrated with Bank Services for complete bank reconciliation. The database is designed in a way where user can access the Accounts Payable from General Ledger with ease. The effects of information systems on internal controls Internal controls are accounting procedures designed to promote efficiency, or procedures to assure the implementation of a policy to safeguard assets or avoid fraud and error. ("The Free Dictionary" by Farlex) In the case of conventional manual accounting: here's a typical scenario. The management will have the following: different bookkeeping and accounts personnel designated to particular books or records. These books/records will be kept under locked cabinets and can be accessed by the certain personnel. The advantage is that only a restricted group of people have access to the data, but it also makes it harder to monitor for 'abnormal' account activities (fraud/embezzlements) or to create an audit trail as it is very labour intensive for manual consolidation of accounts. This is not effective where the companies have branches, subsidiaries, and the accounts are being managed in various locations. Because accounting is a very complex process and involves huge volume of data, many a time, accounting crimes (like fraud and embezzlements) does not get detected till it is too late. The high tech information systems, however, is a more 'open' system. It is 'open' in the manner that data can be accessible at any time, regardless of geographic location. The data are real-time, report can be generated quick, data are easy to trace and follow. The following are some examples of the internal control that are only available for information systems. Accessibility control: No companies want their financial data to be 'too accessible', and controls can also be built into the systems - for example, personnel needs to log into the system with their account and password to access the data. Also, control can be set such that type of data to be accessed can be control by the authority/rights assigned to the different group of users. Restriction of usage: Information systems can restrict what can be accessed, viewed and/or printed. The reports can be tailored such that only the required data are printed. Restriction of accounting task: Information system allows you to set the permissions on tasks: for example, who is allowed to create, modified or delete the data. Any changes in records can be time-stamped and logged for accountability and auditing purposes. This provides an audit trail for all transaction records. Business Rule control: In a manual accounting system, human errors are sometimes difficult to detect: say an accounts clerk entering $50000 instead of $500.00. In an information system, you can have in-built business rule, such that a notification alert is triggered off when it detect anything that falls out of the business rule. As with any change in work processes, there will be effect on the internal controls. It is highly dependent on what controls are available and how they are being implemented. Before a company implements an information system, it is important be aware not only about the benefits it provides, but its effect on the internal controls. It is never safe if you lock your front door while you leave the back door open. References ACCPAC International Inc, (2002) ACCPAC success: Radisson Rests Easy with ACCPAC online Retrieved 16 March 2006, from http://www.sageaccpac.com/products/success/radissonFNL1.pdf SAGE Software, Inc Sage Accpac Accounting and Operations Retrieved 16 March 2006, from http://www.sageaccpac.com/products/accounting/ FARLEX, The Free Dictionary Retrieved 16 March 2006, from http://www.thefreedictionary.com/accounting Read More