PPT05
PPT05
PPT05
Chapter 5:
ERP Systems: Accounting and
Finance
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner 5-1
Objectives
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Case: Atlantic Manufacturing
• Operational
management
level
– Production of
transactions
• Paychecks,
invoices,
checks,
purchase
orders
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner 5-4
Management Control Processes
• Budgeting
– Analysis of allocations, expenditures, revenues
• Cash management
– Cash flow analysis
– What-if analysis
• Capital budgeting
– Evaluation tools: NPV, IRR, pay-back period
• Investment management
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner 5-5
Accounting Systems
• Traditional
– Provide operational-level software
• Produce invoices, checks, statements
• Financial accounting
– Financial statements for external reporting
purposes
• Management accounting
– Information on profitability
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Accounting Systems v. ERP
Modules
• ERP
– Information shares integrated database
– Provides up-to-date information
– Seamless
– Creates document flow of transactions
• Accounting systems
– Manual or separate transfer of information
– Multiple platforms
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© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner 5-8
ERP Financial Accounting
Module
• External reporting
– Set by general accounting standards
– Legal requirements
• Includes accounts receivable subsystem
– Interfaces with cash management
– Monitors accounts and updates, handles
payments, creates due date lists, produces
statements
• Accounts payable
– Handles payments, applies available discounts to
maximize profits
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner 5-9
Management Accounting
Modules
• Internal accounting perspectives for directing and controlling
operations
• Information on variances between planned and actual data
• Key activities
– Cost center accounting
– Internal orders as a basis for collecting and controlling costs
– Activity-based costing of business processes
– Product cost controlling for profitability analysis
– Profitability analysis by market segment
– Profit center accounting of individual areas of organization
– Consolidation of financial data for accounting perspectives
• Enable management to better allocate resources, maximizing
profitability and performance
• Central clearinghouse for accounting information
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ERP Systems
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© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner 5-12
Featured Article: The Changing
Landscape of Computerized Accounting
Systems
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner 5-13
Featured Article: The Changing Landscape of
Computerized Accounting Systems, continued
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner 5-14
Featured Article: The Changing Landscape of
Computerized Accounting Systems, continued
• Internet-based commerce
– Hottest technology
– E-business
• Quicken allows remote entries through Web
• EDI and EFT
– E-commerce
• Amazon.com and on-line securities trading
• Dell Computer
• ERP
– Internet additions
– Prices decreasing
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner 5-15
Featured Article: The Changing Landscape of
Computerized Accounting Systems, continued
• Best practices
– Improve bottom line
– Create air of control
• Structured Query Language
– Database of choice
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner 5-16
Summary
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