Impact of Computerized Accounting to Inventory Management
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
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