HARDWARE AND SOFTWARE SELECTION 2 Hardware and Software Selection The accounting cycle boils down to a set of rules used to ensure the accuracy of financial statements filed or submitted by those in an organization responsible for filing said statements. Mathematical errors have been significantly reduced thanks to the use of computers and related software applications. Both hardware and software are essential for integrating the accounts receivable process into the automated system. From sophisticated computers with large hard disk drives (HDD) to memory to high definition computer monitors for displaying many colors within graphs, presentations, and training modules. In this forum, we will examine what information that may need to be shared between the different cycles. Information such as who will need access to the information, what controls will need to be in place for the integration to be successful and transparent to customers, what types of reports will need to be generated once the integration is complete and what information should be available through the corporate intranet and Internet. Many people and groups need access to information contained in the accounts receivable ledger. Some of these include customers, account managers, executives, investors, and auditors. Customers demand anytime access to their account information online, including amounts owed, available credit, and recent account activity. Account managers need access to accounts receivable data to make decisions on credit extensions and debt collections. Executives make short-term business and strategic decisions based on the accounts receivables input to the general ledger. Riordan’s Accounts Receivable ledger contains detailed information about credit sales transactions occurring in the revenue accounting cycle. The accounts receivable ledger
RIORDAN MANUFACTURING 2 Riordan Manufacturing Incorporated is proclaimed to be an industry leader in the market of plastic injection molding. With facilities throughout the world Riordan can design and create unique and innovative plastic products that add value to a company’s promotional marketing strategy. Throughout this paper the subject is to focus on Riordan Manufacturing’s business processes. The subject of this paper will also identify the five accounting cycles used by Riordan and provide in-depth process analysis for the accounts receivable cycle and discuss how the company performs this accounting cycle. Another topic of analysis for this paper is to review the strengths and weaknesses of the internal controls built around the accounts receivable cycle. After the accounts receivable cycle for Riordan is explained and controls have been reviewed this paper will theorize how this accounting cycle can be adopted and integrated into an enterprise accounting information system along with identifying the impacts that could be expected on interfacing systems as a result of this integration. Five Accounting Cycles and Use of Accounts Receivable According to Riordan Manufacturing’s website the company has three independent manufacturing sites with their own accounting operations in each of the domestic sites. Each site engages in accounting activities associated with the General Ledger, Accounts Payable, Accounts Receivable, Payroll, and Financial Reporting (The Apollo Group, 2006). For the purposes of this paper the topic of analysis will be the Accounts Receivable cycle. Accounts receivable is the process of accounting for payment owed to the company for products sold. In Riordan’s case the sale and delivery of product to a customer will result in that company being liable for payment of goods rendered.