The purpose of converting the SUA system to Peachtree is to see the differences between the systems and to choose the better system for the company. We can convert the SUA system to a computerized accounting system, and we strongly recommend adapting Peachtree as our accounting system. In the following pages, we show flowcharts and tables for revenue and expenditure cycles to compare both manual and Peachtree systems.
Advantages:
- Peachtree is an easier process compared to a manual process. Almost all professional accountants know how to use Peachtree. It is a system that takes a difficult and complex process and redesigns it into an easy process.
- Less time and labor is consumed. In the purchase order, Peachtree could automatically create a Purchase Order or Sales Invoice and fill in the prices on it, whereas we’d have to manually duplicate a PO or Sales Invoice and then calculate the prices.
- It is more accurate than the manual process. The Peachtree software always ensures that all the entries go to the correct general ledger or subsidiary ledger. In the cash receipt process, the SUA system requires all entries to be written, and journals to be filed. Peachtree provides an automated system that’s easier to record and follow. In the SUA system, on the other hand, it is easier to record incorrect data.
- Less paper work and less chance of losing data. Peachtree helps prevent lost data. Most of the files are stored in the computer.
- Physical inventory is controlled. In the shipping and billing process, the SUA system required employees to pick inventories and manually file documents, but Peachtree provides customer purchase orders before picking inventory, which decreases the risk of having inventory stolen. Peachtree sets up a system that matches all documents automatically, and batches total sales for the company.
- Another control risk – authorization or duty of segregation. In Peachtree, employees can only open their own accounts, and have limited access to other documents. With sales returns and write-offs, only authorized employees can clear customer accounts.
- Preformatted data entry makes data entry more efficient. Peachtree will not forget to give discounts to customers who meet discount criteria. In the manual system, the chance of forgetting to give a sales discount to customers is higher.
- Its security system is more secure than a locked drawer.
Disadvantages:
- Peachtree is a computerized accounting system, and even though it is easy to work on, we need to get our accountants trained to use it.
- The system is expensive to install. Considering the savings to labor and time, it pays for itself.
In conclusion, we recommend using Peachtree as our accounting system. Peachtree is less time and labor consuming. It is more accurate than the manual system, and the limited access secures our data.
|Transaction Cycle |Sub Process |SUA Procedure |Peachtree Procedure |
| |Cash Receipts |JA: restrictively endorse customer check |JA: restrictively endorse customer check |
| | |JA: enter on Cash Receipts prelist |JA: ENTER ON Cash Receipts prelist |
| | |JA: make entry in CR journal and AR sub ledger |JA: enter receipt of cash into peachtree and |
| | |RK: prepare bank deposit slip |apply to appropriate invoice |
| | |NF: agree deposit slip to prelist and CR journal|RK: prepare bank deposit slip |
| | |Int Cntl: segregation of duties |NF: agree deposit slip to prelist and CR |
| | |Int Cntl: update customer record |journal |
| | |Int Cntl: compare dep rect to prelist and CR |Int Cntl: Segregation of duties |
| | |journal |Int Cntl: update customer record |
| | |Int Cntl: initials on documentation |Int Cntl: compare dep rect to prelist and CR |
| | |Int Cntl: lockbox systems |journal |
| | |Int Cntl: restrictively endorse and daily |Int Cntl: lockbox systems |
|Revenue | |deposits of checks received |Int Cntl: data encryption |
| | | |Int Cntl: restrictively endorse and daily |
| | | |deposits of checks received |
| |Shipping and Billing |NF: pick items from inventory and fill order |NF: input data |
| | |NF: prepare pre-numbered bill of landing |NF: picking inventory |
| | |NF: prepare pre-numbered sales invoice |NF: edit sales data and fill out sales invoices|
| | |NF: ship customer order |Int Cntl: physical counting inventory |
| | |Int Cntl: limit checks |Int Cntl: user training |
| | |Int Cntl: pre-numbered doucments |Int Cntl: ratio analysis |
| | |Int Cntl: insurance and bonding |Int Cntl: insurance |
| | |Int Cntl: physical counting inventory |Int Cntl: documents matching |
| | |Int Cntl: ratio analysis |Int Cntl: backup of computer files |
| | |Int Cntl: internal control | |
| |Accounting and Bad Debt|JA: make entry for credit sales in sales journal|JA: match and compare documents |
| | |and acc. Rec. sub. Ledger |JA: process data and update databases |
| | |RK: make entry in general journal for bad debt |JA: inquiry processing system |
| | |allowance |Int Cntl: documents matching |
| | |Int Cntl: initial on documentation |Int Cntl: ratio analysis |
| | |Int Cntl: documents matching |Int Cntl: monthly statement |
| | |Int Cntl: ratio analysis |Int Cntl: firewalls |
| | |Int Cntl: check sales order file weekly |Int Cntl: user training |
| | |Int Cntl: monthly statement |Int Cntl: authorized other people who do not |
| | | |have access to cash |
| | | |Int Cntl: backup of computer files |
| |Sales return |RK: approve request and sign it |RK: approve request and sign it |
| | |JA: complete rt. side of return request and |JA: complete rt. side of return |
| | |prepare 2- part credit memo |request and create credit memo |
| | |RK: review documents, approve and initial credit|RK: review documents, approve and initial |
| | |memo |credit memo |
| | |JA: make entry in sales journal and AR sub |JA: prepare check for cash return |
| | |ledger for credit, prepare check and make entry |RK: review documents, sign and mail check |
| | |in cash disbursements journal for cash |Int Cntl: firewalls |
| | |RK: review documents, sign and mail check |Int Cntl: approval and signature |
| | |Int Cntl: approval and signature |Int Cntl: documents matching |
| | |Int Cntl: limit checks |Int Cntl: update customer data |
| | |Int Cntl: ratio analysis | |
| | |Int Cntl: documents matching | |
| | | | |
| | | | |
| |Purchase Order |NF: Prepare pre-numbered purchase order |NF: count and record quantities of goods |
|Expenditure | |RK: purchase order approved |received |
| | |Int Cntl: adequate documentation |RK: purchase order approved |
| | |Int Cntl: approval on documentation |Int Cntl: physical security |
| | |Int Cntl: have someone from other department to |Int Cntl: firewalls |
| | |double check |Int Cntl: approval on documentation |
| |Receiving |NF: prepare pre-numbered receiving report |NF: count and record quantities of goods |
| | |NF: prepare receiving report for purchase or |received |
| | |returned sale |NF: input data |
| | |Int Cntl: pre-numbered documents |Int Cntl: physical security |
| | |Int Cntl: internal audits |Int Cntl: firewalls |
| | |Documents matching |Int Cntl: backup of computer files |
| |Accounting |JA: note and resolve difference in quantities |JA: note and resolve differences in quantities |
| | |and prices, adjust documents and initial invoice|and prices, adjust documents and initial |
| | |JA: make entry in purchases journal and AP sub |invoice |
| | |ledger |JA: input data into peachtree |
| | |JA: prepare fixed asset sub ledger record if |Int Cntl: initial on documentation |
| | |acquisition is a fixed asset |Int Cntl: firewalls |
| | |Int Cntl: initial on documentation |Int Cntl: backup of computer files |
| | |Int Cntl: documents matching |Int Cntl: update customer files |
| |Payments on Account |JA: pull support documents on due date |JA: prepare and print check |
| | |JA: prepare check |RK: review documents, sign check, write “paid”,|
| | |RK: review documents, sign check, write “paid”, |check no, date and initial on invoice |
| | |check no, date and initial on invoice |JA: update data |
| | |JA: make entry in cash disbursement journal and |Int Cntl: authorization |
| | |AP sub ledger |Int Cntl: documents matching |
| | |Int Cntl: limit checks | |
| | |Int Cntl: adequate documentation | |
| |Cash purchases and |JA: prepare check |JA: prepare and print check |
| |other cash payments |RK: review documents, sign check, write “paid”, |RK: review documents, sign check, write “paid”,|
| | |check no, date and initial on invoice |check no, date and initial on invoice |
| | |JA: make entry in cash disbursements journal |JA: update data |
| | |Int Cntl: limit checks |Int Cntl: limit checks |
| | |Int Cntl: authorized other who do not have |Int Cntl: authorized others who do not have |
| | |access to cash |access to cash |
Revenue Cycle
Shipping and Billing
(NF)
Kramer approved
``
Accounting (JA) Bad Debt(RK)
Sales Return
Authorization (RK) Accounting (JA)
Cash
Credit
Cash Receipts
Receipt of Cash (JA)
checks received
for cash sales
Adams is assisted
here by Ford
Deposit (RK)
Deposit Validation (NF)
Expenditure Cycle
Purchase Order (NF) Receiving (NF)
Accounting (JA)
Cash disbursements
Payments on Account
(JA) (RK)
Cash Purchases and Other Cash Payments (JA)
-----------------------
Picking inventory
Purchase Order
Customer
In put sales data
Edit sales data & fill out sales invoices
Shipping
Sales invoice 3
Sales invoice 2
Sales invoice 1
Sales data
1
Mail to customer
Purchase Order
1
Identify uncollectible accounts receivable
Enter data to customer invoice, write-off
Match and compare documents
Process data and update databases
Sales
marketing
General Ledger
Inventory Database
Account receivable database
Customer account status
Inventory status
Inquiry processing system
Sales analysis
Receive return request
Approve request and sign it
Complete rt. side of ret. Req & create credit memo
Return request 1
Return request 2
To customer
Review documents, approved and initial credit memo
Return request 1
Credit Memo 2
Credit Memo 1
To customer
A
A
Prepare check & print
Is credit memo for Cash or Credit sale to account
Cash disbursements journal
Kramer review documents, sign and mail check
Sales marketing
To Customer
Return request 1
Check
Credit memo 2
Receive check
Restrictively endorse check
Customer PO
Check
Enter on cash receipts prelist
1
Check
Inventory database
Cash receipts prelist
Process cash receipts
Enter receipt of cash into Peachtree and apply to appropriate invoice
Customer database
2
Cash receipts prelist
1
Check
To bank, each day cash is received
Bank deposit slip
Check
Prepare bank deposit slip for each day’s receipts
Received validated deposit receipt from bank
Deposit receipt (validated)
Agree deposit receipt and prelist
Deposit receipt (validated)
Cash receipts prelist
Prepare for bank reconciliation
Receive goods from vendor
Received oral requisition
Supplier
Approved P.O. 1
Approved P.O. 2
Purchased order approved and signed by Kramer
P.O. 1
Input Vendor P.O.
Count and record quantities of goods received
Count and record quantities of goods received
Input data
P.O. 2
Receiving report for purchase
1
Receive invoice from vendor
1
Receiving report
Vendor invoice
Approved purchase order 2
Note and resolve differences in quantities and prices, adjust documents and initial invoice
Input data
Vendor invoice
Receiving report
Approved P.O. 2
To vendor
Approved P.O.2
To vendor
Check
Review documents, sign check, write “paid”, check no, date and initial on invoice
Check
Vendor invoice
Receiving report
Approved P.O.2
Vendor invoice
Receiving report
Approved P.O.2
Prepare and print check
Vendor invoice
Receiving report
Cash disbursements
Vendor
Update data
Vendor invoice
Check
Edit and print check
RK reviews documents, signs check writes “paid”, check no., date and initials on invoice
Check
Vendor invoice
Receive invoice from vendor 