Executive SummaryThe current business world requires business firms to embrace Information Technology to ensure success in the management and decision making. The use of traditional accounting and book keeping approaches, which are manual, leads to delays in updating of information and processing of sales and orders. This may lead to loss of sales and loss of revenue for a company. This has been evident in Pressure Hydraulics, a local company that has been using manual accounting systems. The significance of using Information Technology by introducing automated accounting information systems includes speed and automatic document production.
It ensures quick entry of data in a computer that has stored databases of customers, stock records and supplier details, compared to manual processing (Banerjee, 2010). Additionally, the processing of invoices, purchase orders, statements, credit notes and other documents is fast and accurate. Pressure Hydraulics should install such systems to ensure that there is efficiency, accuracy and reliability. Accounting information is vital in key decision making. Therefore, there is a need for accuracy, and an automated accounting information system reduces the possibility of errors in transactions because only one entry is required.
These accounting systems update accounting records automatically. They also make information available instantly to different users, in various locations (Sofat & Hiro, 2008). The use of accounting information systems in a business lead to ease management of information. This is because they produce information that helps management to monitor and control the organisation. The systems also ensure display of legible figures to avoid poor figure related errors. It should be noted that accounting information systems reduce the time spent by workers in preparing the accounts hence reducing audit expenses because the produce neat, accurate and up to date records.
There is a significant reduction of stress among managers because the systems broaden what management knows. Finally, it allows easy trading in multiple currencies and updates. Pressure Hydraulics requires one such automated accounting information system to solve its current problems in financial information management. This feasibility report delves into the current issues facing Pressure Hydraulics in its accounting system. It analyses these problems and the impact that they have on the company’s financial reporting, customer requirement satisfaction and management decision making.
The report then provides solution objectives for the company. It identifies and analyses the constraints towards the realisation of these objectives by Pressure Hydraulics. Using a computerised accounting system to process accountant data can be an efficient and effective way to control financial information of a business (Gilbertson & Lehman, 2011). The feasibility study outlines development plans of a computerised accounting for the company, potential solutions to overcome the constraints and suggests valid recommendations, such as suitable solution for the accounting and payroll pitfalls for the company to implementation so as to ensure success.
Pressure Hydraulics’ Current ProblemsThe current problems in Pressure Hydraulics include loss of valuable time that the manager or the owner of the company, Allan Taylor, spends each day, at each service centre to monitor its operation. This leaves little or no time for him to continue developing his business. This will be more problematic in case he opens up additional new service centres at Coffs Harbour and Gosford. Loss of valuable time that is meant for management purposes leads to negative effects on the organisation (Pohlman & Gardiner, 2000).
First, the manager falls behind his work because there are different tasks and operations that the manger is required to carry out. Secondly, this leads to loss of organisation. The manager is unable to do what he should be doing at a particular time because loss of time leads to being unorganised. This trend can also lead to the manager becoming overwhelmed, and lose focus and potential income that the company could have gained if the manager had sufficient time to develop his business.