Managing the Move to the Cloud Analyzing the Risks and Opportunities of Cloud-based Accounting Information Systems

MIS320 Group Case

1.Which cloud-based accounting information system should Pia select and why?

Pia should select system 3 because unlike the other two systems it has high level of efficient interface and it can integrate upon request. System 3 offers a big monthly price among the three systems but the good thing is there is no transaction fees which would suitable for pia. As pia would not be able to afford paying increased fees it would be a good fit for pia to select system 3 as her cloud-based accounting information system. Pia would not be able to afford paying increased service fees and accounting companies have multiple customers many of which are much larger and more interesting than her pharmacy. Pia is also getting 2 hours of accounting services in this monthly package.

2. Should Pia be worried about possible lock-in with either accountant or system provider?

No, as pia is choosing system 3 as her cloud based AIS it would be very good for her business because this system is tied with accounting services and pia would easily manage the services as accountant as well. This system is pretty old and trusted for many years and the best part it has zero transaction cost. As pia would be the one who will use the system there is no chance of lock-ins if she hired an accountant as the system is automated there will no big problems or lock-ins in the future as well.

3. How should Pia mitigate the possible data security risks?

If pia selects system 3 and uses an accountant she would have much time to monitor what the accountant is doing .She should ensure all the accounting transaction raw data are stored in one single place and she could re-check it everyday to make sure the accountant is doing the way she wants .If all the data are stored in house and there is no internet connection the data will be pretty safe. If she uses the internet often Pia can use a good antivirus in her transaction computer to make sure the data is safe and locked from outside theft. She also can install a CCTV camera to make sure all the data is recorded by the accountant without any interruptions.

4.yes price is an important factor when choosing the system. Because business growth has to effect on the efficiency of operations. If pia adopts the cloud based AIS that should think about is it cost efficient or not. On a business there must be concern about benefit and cost when choosing the system. There were fixed fees, software licenses and basic monthly service fees and some hidden costs. Over all, the fee should always fair and beneficial to the company. Along with price it is important that should also be user friendly. So, user can easily work with it. The company should think about decision which system the should purchase which will be beneficial from other according to cost and efficiency.

5. What is the optimal division of work between Pia and the accountant? Should Pia outsource all the accounting tasks, use selective outsourcing, or keep all tasks to herself? Evaluate each accounting task on their suitability to outsourcing in the cloud context. Use Table A1 provided in Appendix and discuss the implications of your choices.

Pia should manage payroll and payments and the accountant should manage sales, purchases and reporting. In the payroll section pia will do Personnel register maintenance, Basic payroll data maintenance, Payroll calculations. And in the payments, she should be able to manage Periodic VAT payments Salary payments, Payments for purchases, travel and other expenses, Monthly payroll tax payments which I assume she already does this activity by herself. Sharing the sales accounting responsibilities like:

Client register maintenance

Product register maintenance

Sending sales invoices

Handling of sales invoices

Sending note of complaint

Sales ledger maintenance

And Purchasing, Reporting responsibilities like:

Supplier register maintenance

Receiving purchase invoices

Handling purchase invoices

Handling purchase, travel & other costs

Purchases ledger maintenance

Preparation of balance sheet and income statement

Preparation and sending of VAT

Preparation and sending of annual salary reports

Preparation and sending of annual pension insurance reports

Can be done by the professional accountant. Sales, purchasing and reporting should be done in house because this activity can complex when done using cloud computing if there is an error in software or there is an interruption in internet connection all the operation will be on hold so its better of using an offline system where all the data and all the input is done in-house. As an owner pia has already managing much of her business activities as an accountant so it’s a good idea if she manages the payroll and payments section and she can do that using the help of cloud computing Very easily.

6.when it is important to ensure a good fit between the selected system and the work arrangement. first of all, to define whether the system is effective or not. Then relate to the work system with if the business as well as effect on the efficiency. Arrange the work step by step in the system. Before arrange the work in system concern about user oriented and must set of critical decision concerning the task. Because in accounting there have several tasks and sub tasks, adding complexity of the problem. Mainly, set the work with the system integrate them properly according to business.

Answer to the Question No: 7

❖Transaction fee is Euro 0.95/transaction ( charged for sales & purchases invoice and monthly salary payments).

❖Accounting services cost approximately Euro 65/hour.

Answer to the Question No: 8

In long term Pia will observe the benefits of moving to the cloud accounting system, as she adopt it for getting more time. Where she will able to focus more on management and strategy development of her pharmacy. By implications of this cloud accounting system she will be free from accounting. As she wish to move cloud accounting system because she found herself more costly and getting more time to spend on management and strategy development, but if this system will not provides her enough benefit as she expected she can shift to another cloud accounting system or if she found moving to cloud accounting system is not abling to help her then she can abandon it.