To: Mr. Warren
From: Warren Sports Supply
Date: February 20, 2013
Subject: Suggestion in for Accounting System Warren Sports Supply

Through all the researches, converting our system to a powerful and efficiency system, which is Peachtree, will benefit our company in many ways. Comparing the advantages and disadvantages of the Peachtree and the manual system, it is easy to see that Peachtree System allow us to improve or accuracy and efficiency. Furthermore, Peachtree has more internal control to minimize risky or human error. More importantly, Peachtree is easy to use.

The current manual system requires employee to do every process by hand. One of the advantages is that the bank statement, income statement, and balance sheet will never balance if there is a minor error. Therefore, it is easy to notice that there is error. However, many process in our current account system are inefficient and risky. Firstly, although it is easy to notice errors, it will possibly take an employee hours or even days to find out that single error. Thus, there is a waste in human recourse. Secondly, since all documents are in hand copy, it is easy to lose and damage when writing and filling documents. Thirdly, if a vendor sale invoice is lost, we will very likely forget to do the payment. Thus, we will have to pay late charges. Lastly, it is easy to record wrong number or calculate wrong price for inventories. It is also possible to send billings, payments, and inventories to a wrong address because there is no control on it.

One of the reasons why we should convert our system into Peachtree is that it process data and transactions more efficient than manual system. Firstly, vendors’ name and address, customers’ and address, and inventories’ purchase and sales price can all be stored in the database. Thus, every time when employees prepare a purchase order, they can choose the client’s name address from the field because these data are previously stored in the database. Secondly, since the sales and purchase price of inventory are previously stored in the database, employees only have to type in the quantity of items purchase, and the total cost will be automatically calculated, so it reduce the risk of human error. Thirdly, everything is stored in eclectic form, so employees do no have to worry about losing any file as long as they constantly stored data.

Another reason why we should convert our system into Peachtree is that it has more internal control than manual system. This is because administrators are able to limit employees’ authorities actions. For example, the manager can limit an employee’s right to write a check. Also, company is able to check the Audit Trial Report in order to monitor behaviors of employees. Therefore, employees will know they are responsible for their own actions. Furthermore, Peachtree keeps record of payments due date, so it will remind employees when payments are due. Unlike, the manual system, employees have to login with their user name and password. Therefore, people who do not know password cannot access to the data, so it is more secure.

The last reason for converting to Peachtree is because it is easy to use. For example, there are fewer steps in Peachtree’s flowchart than that of the manual system, because many steps in Peachtree are automated. Moreover, Peachtree is easy to understand and to use. It is accessible for those who are not accounting major.

Although converting the accounting system into Peachtree can be costly, it will benefit the company in the long-term because its internal control, efficiency, and accuracy help the company to save human recourse and minimize risk. It security helps to prevent outsider accessing the system. Therefore I strongly recommend the company to converting into Peachtree System.

Transaction Cycle | Sub Process | SUA Procedure | Peachtree Procedure | Revenue | Sales | NF: Pick items from inventory and fill orderNF: Prepare pre-numbered bill of ladingNF: Prepare pre-numbered sales invoiceNF: Ship customer orderJA: If credit, make entry in sales journal and acc. rec. sub. LedgerInt Cntl: Segregation of DutiesInt Cntl: Approve credit and initials approval on customer purchase.Int Cntrl: Update customer record | NF: Pick items from inventory and fill orderNF: Enter customer purchase order data into Peachtree NF: Enter sales invoice data into Peachtree NF: Ship customer orderInt Cntl: Segregation of DutiesInt Cntl: Approve credit and initials approval on customer purchase Int Cntrl: Automated update customer recordInt Cntrl: Automated system avoid fill in customer information mistakesInt Cntrl: Automated system write sales order sequential numbered ordersInt Cntrl: Automated system check outstanding paymentInt Cntl: Review invoice and support documents |

Transaction Cycle | Sub Process | SUA Procedure | Peachtree Procedure | Revenue | Sales return | RK: Approve request and sign itJA: Complete rt. Side of ret. req. and prepare 2-part credit memoRK: Review documents and initial credit memoJA: Decide credit memo for cash or credit to account1, If credit memo for creditJA: Make entry in sales journal and acc. rec. sub. Ledger2,If credit memo for cashJA: Prepare check. Make entry in cash disbursements journalRK: Review documents, sign and mail checkInt Cntl: Segregation of DutiesInt Cntrl: Compare documents and initial credit memoInt Cntrl: Approve request and sign it.Int Cntrl: Compare documents, sign and mail check.Int Cntrl: Update customer record | RK: Approve request and sign itJA: Enter return data into Peachtree RK: Review documents and approve credit memoJA: Enter the receiving into Peachtree and apply to appropriate invoiceInt Cntl: Segregation of DutiesInt Cntrl: Compare documents and initial credit memoInt Cntrl: Approve request and sign it.Int Cntrl: Compare documents, sign and mail check.Int Cntrl: Update customer recordInt Cntrl: Automated system avoid fill in customer information and credit memo mistakenly | Transaction Cycle | Sub Process | SUA Procedure | Peachtree Procedure | Revenue | Cash receipts | JA: Restrictively endorse customer check.JA: Enter on Cash Receipts prelist.JA: Make entry in CR journal and AR sub ledger.RK: Prepare bank deposit slip. NF: Agree deposit slip to prelist and CR journal.Int Cntl: Segregation of DutiesInt Cntl: Update customer record.Int Cntl: Compare dep rect to prelist and CR journal.Int Cntl: Independence of employee.Int Cntl: Independence of employee.Int Cntl: one person open mail and restrictively endorse and creates prelist, another posts, another takes to bank. Match prelist, CR journal and deposit slip | JA: Restrictively endorse customer check.JA: Enter on Cash Receipts prelist.JA: Enter receipt of cash into Peachtree and apply to appropriate invoice.RK: Prepare bank deposit slip.NF: Agree deposit slip to prelist and CR journal.Int Cntl: Segregation of DutiesInt Cntl: Update customer record.Int Cntl: Compare dep rect to prelist and CR journal.Int Cntl: Independence of employee.Int Cntl: one person open mail and restrictively endorse and creates prelist, another posts, another takes to bank. Match prelist, CR journal and deposit slip | Transaction Cycle | Sub Process | SUA Procedure | Peachtree Procedure | Expenditure | Purchase Order | NF: Prepare prenumbered purchase orderNF: Purchase order approved and signed by KramerInt Cntl: Send a purchase order acknowledgement to oral requestorInt Cntl: Review by Kramer | NF: Input purchase order data into PeachtreeNF: Purchase order approved and signed by KramerInt Cntl: Send a purchase order acknowledgement to oral requestorInt Cntl: Review by KramerInt Cntl: automated system avoids sending wrong vendor addressInt Cntl: automated system avoids calculate wrong total number | Expenditure | Receiving | NF: Prepare prenumbered receiving reportJA: Note and resolve difference in quantities and prices, adjust documents and initial invoiceJA: Make entry in purchases journal and account payable subsidiary ledgerJA: If it is fixed asset, prepare fixed asset subsidiary ledgerInt Cntl: Segregation of DutiesInt Cntl: match receiving quantities with purchase orderInt Cntl: monthly statment | NF: Input receiving inventory into PeachtreeJA: Enter receiving inventory and apply to appropriate purchase orderJA: Enter data and update purchase journal and account payable subsidiary ledger into PeachtreeJA: If it is fixed asset, input fixed asset into PeachtreeInt Cntl: Segregation of DutiesInt Cntl: match receiving quantities with purchase orderInt Cntl: automated system compare compares quantities ordered and receivedInt Cntl: monthly statement | Transaction Cycle | Sub Process | SUA Procedure | Peachtree Procedure | Expenditure | Payments on account | JA: Pull support documents on due date from VT fileJA: Prepare checkRK: Review documents, sign check, write “paid,” check no., data and initials on invoiceJA: Make entry in cash disbursement Journal and account payable subsidiary ledgerInt Cntl: Segregation of DutiesInt Cntl: document filed by due dateInt Cntl: invoice and check review by KramerInt Cntl: bank reconciliation | JA: Pull out data from Peachtree data baseJA: Create checkRK: Review documents, sign check, write “paid,” check no., data and initials on invoiceJA: Input payment into PeachtreeInt Cntl: Segregation of DutiesInt Cntl: automated system reminds payment dueInt Cntl: automated system records payment into data baseInt Cntl: automated system avoids sending check to wrong vendorInt Cntl: automated system avoids paying wrong amount to vendorInt Cntl: invoice and check review by KramerInt Cntl: bank reconciliation | Transaction Cycle | Sub Process | SUA Procedure | Peachtree Procedure | Revenue | Cash purchase and other cash payment | JA: Prepare checkJA: Kramer reviews documents, signs check, writes “paid,” check no., date and initials on invoiceJA: Make entry in cash disbursements journalInt Cntl: Segregation of DutiesInt Cntl: Kramer reviews check and invoiceInt Cntl: bank reconciliation | JA: Create check from PeachtreeJA: Kramer reviews documents, signs check, writes “paid,” check no., date and initials on invoiceJA: Input payment into PeachtreeInt Cntl: Segregation of DutiesInt Cntl: Kramer reviews check and invoiceInt Cntl: automated system avoids sending check to wrong vendorInt Cntl: automated system avoids paying wrong amount to vendorInt Cntl: bank reconciliation |