CASE STUDY

HAPPY SCAPE ADVERTISING

Michael Mathers, Director at Happyscape

Dianne Johnson, Finance officer at Happyscape

Happyscape is a small advertising- printing business located in Cascade Peak. Happyscape is a client of Accountability Now an accounting firm who has a portfolio of micro and small business clients.

You are working as an accountant at Accountability Now, and as part of their role, Accountability Now provide clients with a range of financial services including data entry and preparation and management of financial accounting and reporting.

Happyscapes director, Michael Mathers, has approached Accountability Now and sought the assistance to improve their accounting systems and processes. Happyscape is planning to streamline their payroll, quoting, and invoicing systems to be able to administer these processes from a single application. They also want to be able to administer their all accounts processes from remote locations.

You will be meeting Michael Mathers and Dianne Johnson to discuss their cloud computing needs and the improvements they would like to make in their existing accounting systems and processes.

In this discussion, you will work with Michael and Dianne to:

Identify their cloud computing needs.

Identify the operational improvements that Michael and Dianne would like to make in the accounting systems and processes.

The discussion among Michael, and Dianne and you must be consistent with the information provided in the Discussion Guide below.

Discussion Guide

Happyscape currently uses an old custom built account application called AccountMe. This software installed on two single PCs at their head office. This accounting software is quite limited as Michael and Dianne can only access this in the office.

He currently pays a monthly support fee of $100 per user to access and maintain the software. This doesnt include updates. Michael has looked into getting his AccountMe software updated to meet these needs and determined that for a business his size, this simply isnt feasible. The custom software update would require a new web server as well as huge upfront investment to develop the software.

Michael would also be up for any related expenses in updating the software for future taxation or business changes.

Here are Michael and Diannes needs for the new cloud-based accounting software:

Integrated Payroll for 18 employees, including Superannuation and leave. (See more info below under Payroll)

Automatically import banking and credit card transactions. (See more info below under Bank Reconciliation)

GST, PAYG and BAS- create and Lodge BAS , PAYG and GST reports to ATO

Inventory- Manager Inventory, including purchase and sales prices and know whats in stock and what is on order.

Can handle 5 concurrent users. All users can access their accounting software in the cloud from computers in remote locations. (See more info below under User Access)

Track Project Costs Set up and track project costs.

Integrations with salesforce cloud platform for quotes and invoices , (See more info below under Sales Teams Needs)

They would like to see improvements in the following areas:

User Access

With the expansion of the business, there is a need for various departments to have specific access restrictions to different functions such as sales, accounts, reports and payroll. Michaels immediate user needs are:

Two (2) sales staff must ONLY have access to add customers and create quotes and invoices.

The finance officer requires complete administrator access to be able to access all features and functions. This includes payroll.

Michael wants access to all functions at administrator level and wants that hell be the only one with this access.

Michael wants his accountant to be the ONLY one who has access to the reporting functions.

Sales Team Needs Michael also has two (2) sales staff who produce quotes and invoices in Salesforce, (a customer Relationship Management Application).

These customers, invoices, details and payments are then also transferred to Account Me by the finance officer each month, creating a duplication of tasks. It is eliminated that this unnecessary transfer of data takes the Finance officer 7.6 hours a month at $45 per hour.

Michael wants to ensure that the cloud- based accounting system can integrate with Salesforce to sync their quotation and invoicing data in real time. He believes this will remove the time wasted by duplication of invoicing tasks in his business and create greater efficiency and accuracy. These sales staff will also require access to the new cloud accounting system.

Michael estimates that each salesperson sends around 10 quotes/ invoices per day.

Payroll

The finance officer processes Payroll for 18 people each month. However, the new system will need to be able to scale up to 40 users as the business grows over the next two years. Initial payroll will need to service a minimum of 18 employees to accommodate current payroll needs. All payroll transactions are currently calculated and reported using an Excel Spreadsheet application and then transferred manually through to Account Me. Michael would like the payroll feature to be part of the new Cloud Accounting Application. He envisages that the time savings for his Finance Officer would be around 2 hours per week at $45 per hour.

The business currently employ 15 people, but the business has forecast that over the next two years an expected increase employees to at least 40. The employees will be based on three states (VIC, NSW and QLD). There is a large volume of product which need to be managed in the inventory as regular stocktakes will be necessary to ensure that costs are managed effectively.

Bank Reconciliations

At the moment, the finance officer is manually entering the bank statement information into Account Me. She processes around 300 transactions a month. Michael would like the new Cloud Accounting Application to import info from Bank Statements. Michael believes that this automation will save around 5 hours a month at $45 per hour. He also thinks that the finance officer will need some training on how to use this feature.

Michael contacts you and asks for your assistance in sourcing and introducing a cloud-based accounting System, moving away from the Account Me program they currently use. In this assessment you are going to simulate a meeting with Michael and Diane (your teacher may play this part or may observe you undertaking this meeting with other students)

Based on the information provided above, you will need to prepare necessary notes below, making an analysis of the case and highlighting the possible outcomes of the decision being considered to move from Account Me to Cloud Accounting (assume you are going to recommend MYOB). You need to ensure that you have the required answers to address the questions that will be asked in the observation assessment.

a) What are the special characteristics of the existing system, you noticed in the organisation?

b) Who do you think are the external users of the organisations information?

c) Identify two (2) types of decisions that need to be made on changing the existing system and name the department that make them?

d) What are the future information requirements of the organisation?

e) What critical information that the organisation lacks to make a decision to change the existing system? (In your opinion).

f) Why, in your opinion, is it necessary to change the existing system?

g) What additional information may be needed and assist in making a decision to change?

h) If you were unsure about the characteristics of the system, who might you ask for help?