DESIGN AND IMPLEMENTATION OF COMPUTERIZED ACCOUNT MANAGEMENT SYSTEM

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Every business company deals on either sales of products or services or both. Whichever the case may be, business transactions take place. Business transaction is more than buying and selling of goods; it also includes rendering of services and more. According to Doyle (2014), business transactions are the interactions between businesses and their customers, vendors and others with whom they do business. This explanation implies that exchange of messages, items, and ultimately money, for the purpose of business all constitutes business transaction.

Business transactions by companies could be in form of sales, expenses, bonuses, discounts, and so on. Proper records of such transactions need to be kept. Keeping such records constitutes accounting.

Reynolds (2009) defined Accounting as “the systematic recording, analysis and appraisal of financial data which results from activities undertaken in pursuit of the objectives of a firm”. Thus, accounting systems monitor revenues and expenditures and quickly establish the firm’s position at particular lines. Furthermore, firms need to know the values of their fixed Assets (Land, buildings, vehicles, plant and equipments), and current assets (stocks, debtors, work in progress, and cash in hand). Because every transaction contributes to an increase or decrease in assets, it must therefore be recorded accurately and stored in easily retrievable form. From the going, accounts should show areas of inefficiency, and reveal the exact cost of all the firms’ activities, as accurate and detailed accounts will make policy formation easier and facilitate the well organized implementation of corporate plans.

Accounting has also been seen by Meigs (2005) as consisting of gathering of financial and other economic data. Just as physical measurements are provided by the metric system, economic measurements are provided by the accounting system, and are stated in financial terms. These economic measurements are put together in reports that carry the information essential for planning activities, control of operations, and for decision making by business units.

Thirdly, accounting provides financial reports that are needed by outside persons who invest in business units, lend money to them, or extend credit to them. It also furnishes reports to be used by government agencies which regulate businesses and by tax authorities such as internal revenue authorities which must ensure that the correct amount of tax is collected. When the unit of consideration is a non-profit organization (such as school, hospital, church or other charitable group), its members and those who contribute to it need to know for what purposes and in what proportions their money is being used. These important pieces of information are furnished by accounting, thereby making accounting a very important aspect of every business.

Thus, accounting can be referred to generally as a set of rules and methods by which financial and economic data are collected, processed, and summarized into reports that can be used in making decisions, relating to the accomplishment of organizational goals.

The major role of financial accounts is the preparation of profit and loss account and the balance sheet. The methods used by a business to keep records of its financial activities and to summarise these activities in periodic accounting reports comprise the accounting system.

Fine Brothers & Co Ltd Abakaliki, like every other profit companies, runs an accounting system. Only a few of these companies run computerized accounting systems; the others rely on manual accounting systems.

The advantages of computerized account management systems over manual ones are innumerable. Manual accounting systems involves hiring an accountant who keeps the company’s accounts, using books and other writing materials while a computerized account management system entails the use of computer programs to keep and maintain a company’s accounting information. Manual accounting systems are characterized by human errors, including mutilation, omission, duplication, miscalculation; wastage of time and energy, data loss, and so on. On the other hand, according to Francis (2014), computerized account management systems are automated, accurate, and fast. Computerized systems can be used to generate reports easily; errors can be corrected easily; data can be backed up on external devices or on the cloud; duplications are automatically detected and data manipulation (especially numerical figures) is easy. Recently, computerized decision making tools have been developed to aid managers in decision making and forecasting, using computerized accounting information.

To solve the problems posed by manual accounting systems, the researcher has embarked on this project which is aimed at designing and implementing a computerized account management system, using Fine Brothers & Co Ltd Abakaliki as the case study company. When implemented, this project will help the company to overcome all the challenges posed by their manual accounting system, including mutilation, omissions, duplications, miscalculations and so on.

1.2 STATEMENT OF THE PROBLEM

Manual accounting systems are characterized by human errors, including mutilation, omission, duplication, miscalculation, etc, as well as wastage of time and energy, data loss, and so on.

Human beings cannot afford writing without errors, so; mutilations are bound to occur when using manual accounting systems. Also, an accountant can easily forget certain debts, dates or schedules while using the manual system of account management. Furthermore, he can duplicate entries; this will, of course, lead to imbalance account at the end of the day; loss of job or taxing of the accountant involved could be the ultimate price. Moreover, when an accounting book is lost, the whole data is lost; creating a back up on the manual system is very difficult. Extra money is also spent is also spent to purchase various accounting books and writing materials.

To solve all these problems, this project is thus necessary.

1.3 OBJECTIVES OF THE STUDY

The broad objective of this study is to design and implement a computerized account management system for Fine Brothers & Co Ltd Abakiliki.

The specific objectives of this study are:

i.                   To eliminate human errors involved in manual accounting like mutilation, omission, duplication, forgetfulness, and so on.

ii.                 To reduce the cost of running accounting systems

iii.              To save time and energy via automation

1.4 SIGNIFICANCE OF THE STUDY

This project will be of immense benefit to the management of Fine Brothers & Co Ltd Abakaliki and similar companies as it will help them in decision making and forecasting. The staff, especially the accountants, of Fine Brothers and similar organizations will find this project helpful as it will help them to keep accurate financial accounts devoid of mutilation, omission, duplication, miscalculation, and so on. The customers of Fine Brothers and other companies that will use this project will be able to sort out their transaction issues easily due to proper record keeping that will be made possible by this new system.

Moreover, government revenue generation agencies and tax companies will benefit from this computerized account management system as it will give them access to accurate and trusted financial statements of Fine Brothers and other companies and thus help them to tax these companies.

Furthermore, any student carrying out a research on same or similar topics will find this project report a useful material for such purpose.

Most importantly, this project will form an inevitable requirement for the award of Bachelor of Science (B.Sc.) in Computer Science.

1.5 SCOPE OF THE STUDY

This study covers the design and implementation of a computerized account management system for Fine Brothers & Co. Ltd Abakaliki. For the purpose of this study, the manual system used by the above-named company was observed over the period of this study, from late 2014 to mid 2015. Unified Modeling Language (UML) was used for the design while Visual Basic 6.0 and Microsoft Access database were the basic tools used for the implementation.

1.6 LIMITATIONS OF THE STUDY

Due to other academic activities, short time frame, economic crunches and other constraints, this study was limited to the design and implementation of a computerized account management system for Fine Brothers & Co Ltd only; other companies were not necessarily taken into consideration for want of time and money. Moreover, Visual Basic 6.0 and MS-Access which are just basic tools for software development were used because of the constraints stated initially. For want of time also, only the basic tools needed to enter, store, manipulate, update and generate reports were added to the software system.

1.7 DEFINITION OF TERMS

ACCOUNT: Account can be defined as record or statement of financial transactions.

ACCOUNTING:  Reynolds (2009) defined Accounting as “the systematic recording, analysis and appraisal of financial data which results from activities undertaken in pursuit of the objectives of a firm”.

SYSTEM: A system is a collection of different but related components that work together to achieve a common goal.

ACCOUNTING SYSTEM: The methods used by a business to keep records of its financial activities and to summarise these activities in periodic accounting reports comprise the accounting system. An accounting system includes every tool and even persons involved in the recording, storing, maintaining and reporting of a company’s financial transactions.

MANAGEMENT: Management is the art and science of planning, directing, organizing and controlling the affairs of something or somebody.

ACCOUNT MANAGEMENT: Account management involves the application of management principles in keeping account. It means the planning, controlling, directing and organization of a company’s financial activities. It also encompasses decision making based on the accounting information of a company.

COMPUTER: Nwachukwu (2007) defined computer as an electronic machine capable accepting data as input, processing it, giving out information as output and also storing such data and information for future use.

COMPUTERIZATION: Computerization is the application of computer in performing tasks. It is similar to automation.

AUTOMATION: Automation refers to the use of machines (e.g. computers) to perform tasks previously done manually, with litt

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