The Theory of Accounting Applied to Software

1. The Theory of Accounting Applied to Software Justin Botillier, Torrey Jacobson, Mindy Konno, Maxine Vang, John Zoller

2. Accounting Software Available • Microsoft Dynamics • Peachtree (Sage Accounting Software) • QuickBooks • Everest Software • GnuCash • Grisbi • Dolphin Accounting Software

3. (formerly Microsoft Great Plains) Project Accounting Software

4. Software Benefits • Financial management • Instantaneous financial analysis • Analytics • Broad range of flexible, customizable analytics, reporting and budgeting options • Business Portal • Built on Microsoft .NET technology. Allows data and processes to be accessed from a Web-based portal

5. Dynamics v. other packages • Integration with widely-familiar applications • Developed by Microsoft which means it is built to work seamlessly with their other products, such as Microsoft Office and Microsoft SQL Server • Microsoft Office-like interface • Pricing/Financing • $5,000 to $500,000. Module type packaging lets a company create their own personal accounting package, eliminate expense on unwanted options • Available from Microsoft Financing to reduce the burden of expensive IT changes • Training • Online e-courses • Classroom training throughout the United States and Canada

6. Dynamics v. MAS90 *http://www.microsoft.com/dynamics/gp/product/mas90comparison.mspx

7. Dynamics Demos http://www.microsoft.com/dynamics/gp/product/demos.mspx

8. GnuCash • Open source software (free) • Runs on Macintosh, Windows, and Linux computers • Keeps tract of bank accounts, stock options, income and expenses

9. Grisbi • Open source accounting software (free) • Runs on Windows, Macintosh, Linux computers • Provides basic accounting reporting/recording such as managing third party finances, expenditure and receipt categories

10. Versions of Peachtree 1. Peachtree by Sage First Accounting *Designed to support small service- oriented businesses 2. Peachtree by Sage Accounting *Add basic inventory features to support retail establishments

11. Versions of Peachtree Cont. 3. Peachtree by Sage Complete *Provides networking and multi-user support, advanced inventory features, online banking, online bill paying, job costing, time and billing, an audit trail, and first-rate fixed asset management features. 4. Peachtree by Sage Premium Accounting *Includes all the features found in Peachtree complete as well as departmental accounting, serialized inventory to assign serial numbers to them, company consolidation to roll up and summarize data, progress billing and employee compensation histories and report customization. *Also comes in industry-specific versions for accountants, manufacturers and distributors.

12. New Features of Peachtree Complete • Now offers online banking – a longtime QuickBooks feature • Download and import transactions from your financial institution directly to Peachtree • Bank list

13. New Features Continued • New online bill payment features • New internal accounting review that removes suspicious transactions and accounting mistakes such as duplicate transactions

14. Accounting Features • The sales section in Peachtree, allows you to keep track of customers, sales, sales representatives and tax codes. You can also update your general ledger and sales journal as well as create an account’s receivable report. • Account’s payable section, known as purchases, allows you to keep track of vendors and writing checks to making payment schedules

15. Accounting Features • Payroll lets you keep track of employee salary and how much your company owes to government. • G/L (General Ledger) section keeps a log of all your transactions for 2 years. There are 13 periods within each year. • Inventory allows for adjustments as well as keep track of how much inventory your business has. • Billing/Time keeps track of which customers are being billed as well as time cards.

16. Accounting Features • Analysis allow your to view how your business is doing as a whole. For example you’ll be able to see a payment aging report that allows you to see what percentage of credit sales are paid on time. • The Company section holds miscellaneous features such as a tutorial on how to use Peachtree and an alarm system that notifies you of important events. It also has a Job Reports feature that allows you to create report by job lists, estimated job expenses etc.

17. Peachtree’s Strength • Fast and smooth download (less than 15 minutes) • Excellent tutorial that walks you through programs • Offers some 145 customized reports • Audit trail- allows you to record and report any changes made

18. Peachtree’s Weaknesses • Expensive - constantly update the software • Only runs on Windows (not flexible)

19. Compared with QuickBooks • Has the upper hand when it comes to inventory. *Lets you track assemblies through manufacturing *Create master and sub-assemblies *Adjust prices by percentages *Apply LIFO, FIFO Weighted Average and more

20. Compared with QuickBooks Continued • Manufacturing firms should highly consider using Peachtree • Those in retail and service businesses that are happy with QuickBooks have little reason to switch because QuickBooks offers an excellent wholesale and retail-specific edition.

21. QuickBooks

22. Basic Information • QuickBooks is an accounting software program • Designed for small businesses • Produced by Intuit • An “off-the-shelf” accounting information system

23. How is QB different from Quicken? • Programs such as Quicken and Microsoft Money are designed to help with personal finances • This often involves little more than bank account activity • QuickBooks and Peachtree are business-oriented • The program is set up around business transaction cycles

24. Versions of Quickbooks • Features offered vary depending on the version you have • Main versions are: • Simple Start • Pro • Premier • Enterprise Solutions

25. Differences between versions • Prices range from approximately $100 to $6000 depending on the level of complexity desired • Simpler versions provide help with tracking bills and day-to-day transactions • More advanced versions offer payroll and inventory functions • Mac versions are also available

26. Using QB • Operation of QuickBooks differs somewhat from textbook descriptions of accounting processes • Use of QuickBooks is modeled around business processes rather than the nuts and bolts of the accounting cycle • This feature may be helpful to users without a strong background in accounting

27. BA 211/317 • Manual accounting cycle: • Journalize transaction • Debit/Credit • Post to G/L • Trial balance • Adjust • Statements • Closing

28. Accounting QuickBooks Style • Major business processes are grouped in the navigators • To enter a transaction, go to the appropriate navigator • Click on the necessary document • QuickBooks generally handles debit/credit issues • Sometimes, a prompt is needed

29. Accounting QuickBooks Style • Each document represents a complete entry or transaction • Transactions are automatically journalized and posted • Reports and financial statements are available at the click of a mouse

30. Financial Statements • With a manual system, financial statements are only available when the books are about to be closed • With QuickBooks, the program will produce reports and statements at any time • So no worries? Not quite…

31. Financial Statements • Beware of GIGO effect: • Statements/reports may not be accurate if important information has not been entered • The system will simply work with whatever numbers it has

32. Drawbacks • Forms and processes are largely fixed • Inventory features are difficult to find and use • Qualifier: the program available to us is the 2002 edition, so this may have changed in recent years

33. Hands-On Features • If necessary, journal entries can be made manually • QuickBooks usually comes with a standardized chart of accounts • However, the user can alter this chart as necessary to meet individual needs

34. Overall • Why accounting softwares are useful now compared to back then? • How is it related to our learning in BA 378? • Internal controls

35. Questions?

36. Bibliography http://www.users.bigpond.com/dunster1/Far%20Side.htm http://www.smallbusinesscomputing.com/biztools/article.php/3520081 http://accounting-software-review.toptenreviews.com/ peachtree-review.html http://www.accountingsoftwareadvisor.com/peachtree/index. shtml http://www.peachtree.com/peachtreeaccountingline/complete/ http://quickbooks.intuit.com/ http://www.microsoft.com/dynamics/gp/product/demos.mspx