Impact of Computerized Accounting to Inventory Management

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CHAPTER 1
BACKGROUND OF THE STUDY
Introduction
Advances in Information Technology (IT) have enabled companies to use computers to carry out their activities that were previously performed manually. The ongoing revolution in IT has had a significant influence on accounting information system. Today, almost all organizations are using computers in their daily business. As computers become smaller, faster, easier to use, and less expensive, the computerization of account ting work will continue.

Accounting activities that were previously performed manually can now be performed with the use of computers. That is, accountants are now able to perform their activities more effectively and efficiently than before. On the other hand, every organization constantly strives to maintain optimum inventory to be able to meet its requirements and avoid over or under inventory that can have an impact on the financial figures. Because inventory is always dynamic, its management requires constant and careful evaluations of external and internal factors and control through planning and review. Inventory management is a very important function that determines the health of the supply chain as well as the impacts on the balance sheet. Effective inventory management is all about knowing what is on hand, where it is in use, and how much finished products result. According to Donald Reimer, CMC & Ravi Nayar, CMC, industry averages suggest that a 20 percent reduction in inventory is achievable with computerized inventory control system. For a company with yearly sales volume of $ 1 million, such a reduction would result in savings of $14,400 per year and would free up $48,000 of new dollars for reinvestment (http://www.growingsmallbusiness.com/News/content_inventory.html). The research work has focused on Quick Serving Restaurants (QSR) because these establishments were wide spread in the market locally and internationally. Simply because food businesses are ninety-five percent profitable than any other kind of business. People always eat, anytime, anywhere and at any cost. You can skip buying a new pair of shoes or fancy clothing in a mall but you can never skip dining inside your favorite fast food restaurant. When you’re on a road trip, you always drop by any drive thru or when you’re lame at home, a pizza delivery is just a call away. After almost 90 years from the sale of the first hamburger and root beer, the global fast food market has grown to over US$201 billion in total revenues in 2009, with growth rate of 3.1 percent, according to Datamonitor. On local front, total family expenditure for food consumed outside the home reached PhP 196 billion, accounting for six percent of the total family expenditure, based on the 2009 Family Income and Expenditure Survey (FIES) (http://www.ats.agr.gc.ca/ase/5991-eng.html). To make quick service possible and to ensure accuracy and security, many fast food restaurants have incorporated hospitality point of sale systems. This makes it possible for kitchen crew people to view orders placed at the front counter or drive through in real time. Wireless systems allow orders placed at drive through speakers to be taken by cashiers and cooks. Drive through and walk through configurations will allow orders to be taken at one register and paid at another. Modern point of sale systems can operate on computer networks using a variety of software programs. Sales records can be generated and remote access to computer reports can be given to corporate offices, managers, troubleshooters, and other authorized personnel. An optimal implementation of Computerized Accounting System (CAS) by QSR means adapting more successfully to a changing environment and shows a high degree of competitiveness, thus enhancing the dynamic character of a company. Conceptual Framework

The use of computer systems help businesses manage their inventory by providing a quick and easy access to detailed inventory and ordering information....
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