Accounting expert systems

Part A: Executive Summary

In many years that come by and left professional accountants have shown considerable interest in adapting and enhancing various types of accounting expert systems with the help from the computer science academicians and practitioners. The main objective of this project is to research and understand the various advanced existent expert system in the field of accountancy out there, most likely it is a semi integration that is helpful for us the accountant to be to theoretically come into terms with such software packages. Such an advanced expert systems have given other professional accountants in their field of work an upper hand in executing their task with ease and in much more proficient manner.The scope of work consists of the introduction of the accounting expert system, finding its merits and its demerits at the same and drilling deep on a real life example.

Breif prorogue

The field of accounting is distinguished by many if not by all of the intellects , academicians, scholars and managers as a crux in any business organization whether it's a manufacturing or a consulting service industry. For any company to succeed in its market segment whether it's in a global arena or domestic one it requires a quite fair intelligent and excellent accounting department. With this kind of understanding and acknowledgment of the domain accounting, a dire need for an expert system which would be artificially made came into existence. A system that in its best would help the accountants to be more effective and efficient in the sense of having accurate financial records on a daily basis of all business transactions that are conducted for that particular corporation or firm.

Expert systems are amongst the many artificial intelligence softwares and programs developed and designed to impersonate the human thinking and expertise in the various fields of interest whether it's in accounting, administration, project management, marketing and finance, and the rest . The development of expert systems started back in the late 1970's with the newly emergence of computers to the world. Many corporations considerably developed a dreadful need to have an accounting expert system with their acknowledgement of such a domain being the core rather than a peripheral role of their business organizations. With that being said, the expert system were developed as a means of integrating computers within the framework of management's decisions makings. They are wholly designed to approach problems and solve them using a standardized numerical or quantifiable data oriented analysis and qualitative breakdown.

Definition

With all that being said, defining an expert system is inevitable in our research, a bottom line definition is somewhat dubious but a little but not far wide general definition would be probable.

So the urban dictionary defines it as "A type of artificially intelligent software system, which stores expertise concerning some subject matter in a knowledge base and attempts to".

The problem-solving aptitude of this program sprouts from the domain knowledge, not just from the formalisms and logic approach it uses.

Background Check on Expert system

Expert system grew up from research trial products which started in the mid 70's, with later on major publications and research grew on enhancing the already developed accounting expert systems. Many professionals accountants joined hands with the fellow experts in the fields of computer and information technology to craft a high quality automated systems which would have more efficient and consistent performance. The specialists thrived in having a system which became a more valuable in the fuzzy domain of information more precisely in the help of noticing and capturing a recurring task or errors caused by the entry of the user. Up to date they have developed an artificial intelligent system that can impersonate the human thinking In the various fields of accounting such as, the financial analysis, taxation and planning, and most outstandingly in auditing.

Types of expert system

The expert systems vary from one to the other depending on their functionality. Their operatives and functional modules ranges from rule based, to logic based, to induction based, to object oriented and the hybrid systems. A handful of the accounting expert system come in software packages and they are found in plenteous for the interested parties . The selection of a certain software package depends with the individual users -firms and their accountants- scope of work and the managerial decision making that they need to tailor their needs with that specific software package. The list of different types of expert system software packages which have been categorized into different types of firm's scope of work are as follows.

  1. Small business accounting softwares : Peachtree's, Quick Books online and the small business manager by Microsoft.
  2. The low-end accounting softwares : Vision point 2000, ACCPAC Pro series, Business Vision 32.
  3. Middle Market accounting softwares : Great Plains by Microsoft MAS 90 and MAS 200, Navision also by Microsoft, SYSPRO.
  4. High-End Accounting softwares: E-Business site (Oracle), MAS 500, Solomon, ACCPAC advantages series Enterprise edition.

Advantages /merits of the accounting expert system.

Without any doubt the accounting expert system comes along with many merits and demerits, but first we would focus on the merits with later on touching the demerits.

  • Permanent Documentations: The experts system provides the managers with a permanent and long term documentation of the entries made. Previous records are undying and the decision process taken will stay there for long term. The human experts forget whereas the system won't forget unless its personally altered.
  • The level of consistency is high in expert systems, similar transactions are most likely handled in an equivalent manner. The system makes an analogous and parallel recommendations for any situation relevant and most of the time doesn't have a disproportionate influence unlike the human experts.
  • The efficiency level is of another major merit the experts comes with, without any doubt the level of success in firms using accounting experts system isn't the same as those not using it. It mainly increases the quantity and the data input at the same time eliminating the cost to be incurred by a full room of clerks and accountants. One human experts can do the job perfectly instead of having two or three recurring the same task.
  • Timelessness and less fraud is committed- The experts systems runs 24 hours seven days a week and 365 days all year long. Secondly and the most important is less fraud and swindle schemes of embezzlement occurs.
  • Less risk and high business success: The risk is very much low due to existence of permanent documentations and the level of consistency. i.e It keeps record of track for any contract entered, whether there is retention or not and the amount of prepaid amounts.
  • Completeness and the duplicability of the system: Given a short span of time the expert system can review almost all the transactions dissimilar to an individual expert whom might take days and even weeks to review all of the transaction by a certain supplier. Where else the duplicability is where the system has the ability to make many copies as possible in a short period for the different departments related. i.e the action done by the procurement on certain purchase order can be copied to the disbursement section if necessary for releasing the retention or pending it.

Disadvantages / Demerits / limitations:

The disadvantages of an accounting expert system, are mainly from the difference between humans and computers or systems. So, the next problems or disadvantages arise from this difference:

Sense of logic: even though the massive amount of artificial logic is an advantage considered for the accounting expert system, it lacks the sense of logic and common sense.

Learning system: an accounting expert system, is based on specific rules or logics, they all together form a "solid" system that operates on certain footsteps. The changes that are happened in the environment can`t be learned by the system, like a human can, it must be updated (the system) for any change comes up.

Lack of creativity: this point appears when facing unusual situations that are uncommon in accounting process, situations that could happen once in lifetime. Humans can respond to this situation with a creative solution, while the expert system can`t.

A Real life example with AccountMate

In order to show a real life example we will be using the accounting software named Accountmate to show the different functions it conducts when its in use.

Account mate is a software which is designed for business corporations who desire the stability and speed of SQL Server instead of having the expense of SQL Server licenses. This flexibility allows AccountMate products to be highly customized in order to be applicable to the business processes and adjust the business grows.

Features

  • Powerful desktop tools and easy access to your favorite Microsoft applications
  • Up-to-the-minute bank balances and instant view of unreconciled transactions help manage your cash flow
  • Drill analysis permits instantaneous viewing of account details
  • Ability to attach supporting documents to transactions and account records
  • Multi-currency features enable transactions in any currency
  • lingual capabilities to support global operations
  • Over 20 modules to fulfill your accounting, payroll, inventory, manufacturing, and other business requirements.

Accounts Payable

With AccountMate, the account payable module, can avoid duplicated invoices and late payments to those of which discount exists and require new invoices. The software simplifies the transactions of credit card and check issuance directly when they take course.

Accounts Receivable

With AccountMate's Accounts Receivable module, the software provides you with accurate invoicing, receivable, clients and inventory management system, which provides customers with promote services. The Sales Order, Pricing Control, Customer Inventory Manager and Inventory Specification modules can be integrated with Accounts Receivable to create a complete order entry, billing and receivables system, providing better customer and inventory management.

Bank Reconciliation

This module allows you to keep track of your cash flow of your business. With this module you can record mixed disbarments, other bank receipts and transfers, to indicate which transactions have cleared your banks and then reconcile their book entries to the bank statements. Moreover, this module keeps you informed of your company cash position by reviewing your last reconciled bank statement.

Inventory Control

With AccountMate's Inventory Control module, you have the absolute grasp of a complete reliable inventory management. This module provides accurate classification of inventory such as cost method applied , measuring unit, warehouse or storage and final stand location. It also records time consumed , and level of quantity in hand. Moreover, inventory count can be done at any time without interrupting other ongoing process. Inventory module can integrate with different module to provide better services and functionalities such as , Accounts Receivable, Sales Order, Purchase Order and Manufacturing modules. Inventory Control can also integrate with the Pricing Control, Upsell Management, Inventory Specification, Kitting, Lot Control and Customer Inventory Manager modules.

Payroll

With AccountMate's Payroll module, you are able to set a salaries of employees hourly , and independent contractors. Pay them in different period according to their working status . you can also link deduction or write the off to employees, while on the other hand bonuses can be assigned to employees and paid on the same time or by check. The system accrues paid leave hours, calculates worker's compensation liability, allows users to customize check printing and supports assignment of multiple state and local tax codes to employees. It can also calculate payroll tax. Using the Payroll module, employee and federal tax deposit payments can be made electronically.

Reference:

  • Internet FAQ Archives www.faqs.org ,
  • T&D Magazine www.electricity-today.com,
  • Journal Articles Excerpt: http://www.questia.com/googleScholar.qst;jsession, , Ezine Articles:
  • http://ezinearticles.com/?List-Of-Top-Accounting-Software-For-Your-Business&id=395741

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