Accounting Information Systems

Table of Contents

Introduction.

Enterprise system..

Accounting system..

Operational areas of the Enterprise system and Accounting system..

The difference in electronic documents.

Recording of transactions.

Storing of documents.

Conclusion.

References.

Introduction to SAP and Accounting System

Accounting records are referred as the key sources of evidence and information that essential to prepare, audit or verify the transactions based on financial statements (Zhang & Wang, 2016). This academic paper aims to analyze the difference between the Enterprise system and accounting system concerning the key operational areas of each system. Recording, storing and other systems used as electronic documents will be discussed in the paper to understand the key differences between the Accounting system and Enterprise system. Each system plays a major role in the business which can be critically analyzed through the research (Zhang, Wang & Lin, 2019).

Enterprise System

Enterprise system or enterprise resource planning (ERP) system is popularly known as a cross-functional information system which is effective for the organization to integrate key business processes and plan distinguished resources of the organization to provide coordination in the internal activities (Schenk, 2015). SAP is an enterprise system which is used to control different business processes. It is also known as enterprise resource planning that consolidates and manages the organizational performance based on the functional environment. SAP represents the Systems Applications and Products in Data Processing (Zhang & Wang, 2016).

Accounting System

An accounting system is known as a system that promotes the organization of financial information. This system can record the information computerized or manually. To keep the track of income, expenses and other business activities, this system is effectively used by the organizations. Regular monitoring of the transactions helps in smooth business operations. Five key characteristics of an accounting system are: easy to use, updated software, comparability, easy to understand and reliability. In business, two types of accounting systems are used by firms which are single-entry accounting system and double-entry accounting system (Ware, 2015).

Operational Areas of The Enterprise System and Accounting System

Enterprise systems are integrated with distinguished protocols, applications and formats. It helps in analyzing the business processes based on accounts receivable, deliveries and sales with the available information of business activities and functions across the organization (Schenk, 2015; Zhang, Wang & Lin, 2019). SAP or enterprise resource planning includes the sales process entirely with sales orders, customer payments, pre-sales activities, billing, deliveries and inventory sourcing. Customer relationship management system, Supply chain management and Enterprise resource planning systems are different enterprise systems. Significant decisions of the firm are based on the distinct information systems with a common centralized database. SAP, Oracle, Ross Systems, QAD and PeopleSoft are some ERP software used by organizations to manage their operations and record the necessary information. Enterprise system includes the operational areas of accounting software including, different tools for warehouse management, contact management, supply chain management, inventory management, logistical requirements and e-commerce (Ekman, 2015).

Accounting systems are used by the organizations to gather, store, manage, process, retrieve and report the financial information which can further be used by managers, auditors, accountants, regulators, consultants, tax agencies, business analysts and consultants. Key operational areas of the accounting system are management accounting, tax accounting, financial accounting, cost accounting, forensic accounting, auditing, governmental accounting and public accounting. An accounting system is usually based on a specific area of business such as financial reporting, banking, basic sales/revenue recording, accounts receivable or payable and tracking of transactions (Wijewardana, 2018; Zhang & Wang, 2016).

The Difference in Electronic Documents

Enterprise system includes different components which are financial management, inventory management system, supply chain management, business intelligence, customer relationship management and human resources. Specific information is maintained by each system wherein specific information regarding the business activity is derived in the form of financial statements (Schenk, 2015; Zhang, Wang & Lin, 2019).

Accounting system includes the information based on journal entries, ledgers and bookkeeping process with a system of debits and credits to process the description. It provides different documents such as production scheduling documents, receiving reports, credit memorandums, income statements, balance sheet, statement of cash flows and other income and expenditure related documents. The output from the accounting system can be identified as invoices, statements and checks (Ware, 2015; Wijewardana, 2018).

Recording of Transactions

Enterprise system such as SAP records the business transactions and other activities with a single integrated system that represents the business information based on production, sales, human resources, logistics and manufacturing. A centralized database supports the business activities and other components of the system. Through ERP applications, different departments in the organization can gather their information based on significant activities (Schenk, 2015; Zhang, Wang & Lin, 2019).

Accounting system includes the information based on business transactions in the form of ledger groups, journal records and other supporting documents. Through the gathered information, the accounting system generates financial statements such as balance sheet, income statement and cash flow statements (Ware, 2015; Wijewardana, 2018).

Storing of Documents

Enterprise system includes the storage of information through cloud application with high availability of data sharing, restoration functions and reliable backup. It can collect the information through multiple paths with centralized administration and remote support system (Schenk, 2015; Zhang, Wang & Lin, 2019).

The information is stored in the Accounting system through the ledgers and journal entries. It also includes different reports based on invoices and checks. Based on the use of software and hardware system, it stores and retrieves information efficiently. Tax information, payroll information, inventory data, general ledgers, check registers, vendor invoices, purchase requisitions, customer billing statements, sales analysis reports and sales orders are stored in the accounting system (Ware, 2015; Wijewardana, 2018).

Conclusion on SAP and Accounting System

It can be concluded that the enterprise system and accounting system both are effectively used by organizations to record the business information and use for efficient decision making. Whereas accounting system in confined with a specific area of business such as banking, financial reporting, accounts receivable and payable, sales tracking and recording. Enterprise system such as SAP is an integrated system which includes the key areas of accounting system besides e-commerce, contact management, warehouse management, inventory management and supply chain management.

References for SAP and Accounting System

Ekman, P. (2015). The enterprise system revisited: how well does it capture the company’s business network?. Journal of Business & Industrial Marketing, 30(2), 208-217. https://doi.org/10.1108/JBIM-11-2012-0163

Schenk, B. (2015). The role of enterprise systems in process innovation. In BPM-driving innovation in a digital world. Berlin: Springer.

Ware, E. O. (2015). Computerised accounting system an effective means of keeping accounting records in Ghanaian banks: A case study of the Ga Rural Bank. International Journal of Research111.

Wijewardana, W. P. (2018). Determinants of Accounting System In Small and Medium Enterprise. he 5th IBSM International Conference on Business, Management and Accounting, 609-620. http://caal-inteduorg.com/proceedings/ibsm5/SME7-127.pdf

Zhang, W. J., & Wang, J. W. (2016). Design theory and methodology for enterprise systems. Enterprise Information Systems, 10(3), 245-248. https://doi.org/10.1080/17517575.2015.1080860

Zhang, W. J., Wang, J. W., & Lin, Y. (2019). Integrated design and operation management for enterprise systems. Enterprise Information Systems, 13(4), 424-429. https://doi.org/10.1080/17517575.2019.1597169

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