Information System - Matts Gardening Mechanics - Case Study Example

University/college: Subject: Student: Semester 2, 2016 Table of Contents Table of Contents 2 Executive summary 3 Description of the problem 4 Solution objectives 5 Constraints 5 Preliminary feasibility study 6 DEVELOPMENT PLAN 7 POTENTIAL SOLUTIONS 8 Recommendations 9 Bibliography 10 Executive summary Matt’s Gardening Mechanics is a small company that was started 3 years ago to provide servicing and repairs for gardening equipment but is showing a great potential of growth. At the moment the management is anticipating to open other new workshop at different arears so as to grow its profits due to the tremendous growth in demand for their services from the market. Matt’s Gardening Mechanics is also planning to introduce the mobile services at all its workshops so as to tap the high profits since this is seen as a premium business. Despite the great anticipations, Matt’s Gardening Mechanics is currently facing various challenges such as the manual operation of the sales and accounting systems that eventually end up leading to mix-ups in the company hence losing some profits. It also lacks an efficient human resource system that can easily help Matt in monitoring the operations of the employees and even help the foreman assign tasks directly to the technicians. Matt’s Gardening Mechanics also lacks enough staff to efficiently carry out the servicing and repairs in the current workshops. Matt’s Gardening Mechanics can solve the challenges by embracing technology in its operation. The existing system should be replaced by an automated system with the following modules: marketing system, purchase system, human resource system, inventory system and the finance system. This help in reducing stock-outs since the inventory will be easily monitored, the assignment of duties to technicians will be very easy with the payroll system, the purchasing system will help in generating quotations as the marketing system will help in tracking the sales and feedback from customers. The finance system will help in the accounting and financial reporting so as for the management to easily know the financial performance of Matt’s Gardening Mechanics (Considine, 2005). Description of the problem Basing on the feasibility study carried out on Matt’s Gardening Mechanics, it was realized that the company is facing the following problems: (i)Human Resources: Matt’s Gardening Mechanics doesn’t have an efficient system to help in assigning roles to the technicians and monitor their daily activities. Again this company does not have a system that can automatically track the number of hours that an individual has worked at a service Centre so as to be able to prepare the payroll for the salaries payment instead things are done manually by the office assistant leading to inefficiency. Matt is also forced to visit all workshops daily in order to monitor what his employees are doing and this wastes most of his time that he could have used in developing and implementing new ideas (Considine, 2005). (ii)Accounting: There is a problem with the accounting system of Matt’s Gardening Mechanics because the invoices are hand written and they are not directly connected to any payment system so as to improve efficiency and mitigate frauds and errors. The journal book is also not well updated due to various changes such as bookings that at time get cancelled and not crossed in a proper way due to huge paper work (Hunton, 2004). (iii)Sales :There is a problem with the sales system in that the price book is often not up to date due to the manual updating of the purchase price of stock making the business to loos most of the profits at times. The customer changes in order dates at times can be received very late causing a mix-up in the operations of Matt’s Gardening Mechanics (Romney, 2006). (iv)Matt’s Gardening Mechanics lacks enough facilities such as computers that will help in automating the existing system and offer a database that will help the office assistant in accessing the price lists easily and updating it in relation to the purchase costs. The current system doesn’t help customers to efficiently book appointments and cancel them without affecting the operations of Matt’s Gardening Mechanics (Romney, 2006). It also does not offer the tracking system of the serving or repairs that are being carried out so as to enable the customer to easily understand the progress of his order. Solution objectives Matt’s Gardening Mechanics main solution objectives are: To efficiently handle the human resource activities. To satisfy the customers fully by developing an efficient and effective sales system To be able to fully tap the increasing demand of mobile services in all regions. To open up other workshops in other different places where the demand is high. Constraints (i)Lack of IT skills: The employees Matt’s Gardening Mechanics lack the information technology skills that will help them in using the new system in operations. Matt will have to ensure that they are trained on how to use the system. (ii)Lack of hardware’s: Matt’s Gardening Mechanics does not have the hardware devices that will support the use of the new system that will be introduced. Matt will be recurred to procure computers for use by the office assistant at the workshops and the smart phones for the other employees like the technicians to help in receiving communications of duties assigned by the foreman (iii)Lack of system: The existing system needs to be replaced with a technological system that will provide controls of frauds and errors, and customer satisfaction. (iv)Lack of enough employees: Matt’s Gardening Mechanics doesn’t have enough employees who will support its anticipated growth. Matt will have employed more technicians, foremen for the new branches and other employees to assist the office assistant so as to improve efficiency. The company also needs some personnel for the managerial position to help matt in administering the workshops. (v)Lack of controls: Matt’s Gardening Mechanic’s existing system does not have internal controls such as proper authorization, segregation of duties and rotation of duties so as to mitigate frauds and errors. For instance, the office assistant does the authorization and payment of which is risky. (vi)Lack of capital: For any expansion of Matt’s Gardening Mechanics, Matt will need input more capital in the stock staff and other resource and at the moment the business does not have enough capital to facilitate growth. Preliminary feasibility study (i)Technological feasibility: Matt’s Gardening Mechanics should adopt a new technology with the latest trends that will solve the problems that are being experienced in the existing system. The new system needs to be very efficient, reliable, relevant, timely, complete and easy to understand (Romney, 2006). (ii)Financial feasibility: The introduction of the new accounting information system should indicate financial benefits. For instance, the introduction of a new system at Matt’s Gardening Mechanics will help the company make more profits than the current profits since it will improve management, accountability, transparency and growth. The new system will also have to be purchased at a reasonable price for it to be financial favorable (Hunton, 2004). (iii)Environmental feasibility: The new accounting information system needs to environmental friendly both internally and externally. The system should be user friendly to the users and should not cause health hazards. The main business activities of Matt’s Gardening Mechanics should not cause pollution to the environment (Romney, 2006). (iv)Legal feasibility: The new accounting information system should not be illegal in that it does not go against the governmental laws .The Company should also not engage in illegal activities (Considine, 2005). DEVELOPMENT PLAN The new accounting information system will have a design with the following features: (i)Purchase system: This module will be responsible for purchases of new stock. It will be used to raise requisitions on sock that has reached the order level, procurement of new stock and updating of the purchase price on the price list database. This system will also help in preparation of purchase reports. Sales system: This is the customer user interface.it will be responsible for taking the customer details, order request, generating invoices for customers ,Issuing quotations from inventory database and processing payments depending on whether the sales will be on credit or cash. In cases of credit sales there will be a subsystem called accounts receivable and I cases of cash there will be a cash payment to cash system (Considine, 2005). (ii)Human resource/payroll system: This module of the accounting system that will be basically carrying out the human resource activities. This system will keep the employees register containing their details, it will manage the time cards, produce the employees cheques to banks for payment depending on the working hours and the rates, produce payroll reports to the management and assign duties to the staff (Considine, 2005). (iv)Finance system: This module will contain the general ledger that is updated by any transaction that has been made. It will help in preparing the financial statements such as the cash flow statement, income statement and the balance sheet for internal and external use. It will also help in reconciling the various accounts (Hunton, 2004). (v)Inventory system: This module will be responsible for inventory management. It will monitor the stock level and alert when the stock limit is reached so as to avoid stock-outs and overstocking. It will be responsible replying to orders made by the customers and issue of quotations since it will be updating the price list (Considine, 2005). POTENTIAL SOLUTIONS With the introduction of a new system with a human resource sub-system, Matt’s Gardening Mechanics will be able to easily generate the employees’ timecards promptly, keep and update information of the existing, new and existing employees of the company, provide payroll checks to employees, and generate essential payroll reports to the office assistant who pays the employees. The purchase system will help in updating purchase prices in the database and automatically update the price list database that will end the problem of undercharging the customers. It will also help in generating requisitions at a very timely manner since it will be linked to the inventory system. Sales system will help in generating accurate quotations to customers, preparing invoices that don’t differ from the details in the invoice, collect customer details and their requests, to reschedule a customer’s order, generate monthly sales statement and reports, link with the inventory system so as to inform the customer on the stock available, and reconcile the sales with the payments at the cashier (Romney, 2006). Inventory system will help in updating the stock that has been received and issued, it will also inform the office assistant when the stock limit is reached so that she can reorder so as to avoid stock outs and generate reports on the inventory (Romney, 2006). Finance system will be the central system linked up with the others to assist in putting controls in place, reconciling the revenues and computing the profits of the company, and making financial decisions. Recommendations Matt’s Gardening Mechanics has got great ambitions of growth and the only more efficient way to achieve the opening of new workshops and huge profit is by adopting a new accounting information system that will replace the existing one, train the employees on the use of the new system so as to achieve efficiency and effectiveness, open other new workshops in different places where there is high demand for servicing and repairs for garden equipment, employ more staff to help in attending to customers due to the growing numbers of customers and also Matt should introduce strong internal controls in the company in order to prevent errors and frauds from happening within the company’s day to day activities (Hunton, 2004). Bibliography Albrecht, ‎. (2007). Accounting: Concepts and Applications - Page 901. New York: Jonh Wiley. Considine, B. (2005). Accounting Information Systems. New york. Damodaran, A. (2010). Applied Corporate Finance - Page 552. New York: Cingage Learning . Ehrhardt, M. (2008). Corporate Finance: A Focused Approach - Page 554. london: Cingage Learning. Hansen, D. (2007). Cost Management: Accounting and Control - Page 255. New York. Hunton, J. (2004). Accounting Information Systems. Thomson. Jerry, W. (2009). Managerial Accounting: Tools for Business Decision Making. London: Jonh Wiley. Romney, M. (2006). Accounting Information Systems. Prentice Hall. Stice, J. (2007). Accounting: Concepts and Applications - Page 891. New York: Cingage Learning . Read More