Improving The Effectiveness Of Accounting Systems In Production Industries
(A Case Study Of Paterson Zechonis Industries Plc Aba)
Improving the effectiveness of accounting systems in production industries requires a multifaceted approach that integrates technological advancements, streamlined processes, and strategic data analysis. Implementing advanced accounting software tailored to the specific needs of production environments can enhance accuracy and efficiency in tracking costs, inventory management, and production expenses. Furthermore, integrating these systems with other operational functions such as supply chain management can provide real-time insights into resource allocation and demand forecasting, enabling proactive decision-making. Additionally, fostering a culture of continuous improvement through employee training and engagement can ensure that accounting processes remain aligned with evolving industry standards and best practices, ultimately optimizing the overall performance of production accounting systems.
TOPIC TYMPOROVING THE EFFECTIVENESS OF ACCOUTING SYSTEM IN PRODUCTION INDUSTRIES IN NIGERIA.
(A CASE STUDY OF PZ INDUSTRIES PLC ABA)
Most of the production industries have actually collapsed because of inadequate and ineffective accounting system in the accounts department of production industries.
The growth of any countries industries depends on the level of her accountability to a large extent to the success of the industries. There fore this project is aimed at identifying and describing the need for an effective accounting system in the accounts departments of production industries.
As a background for the project the effectiveness of accounting system in production industries with particular reference to Paterson Zochonis industries Plc Aba B reviewed.
The project will illustrate the strength and weakness of accounting system in Pz industries Plc Aba to enable us known its effectiveness.
This study is also undertaken to evaluate the accounting policies of this industry with the view of improving their accounting system and control.
The research will be conducted the production manager and other workers in the department will be interviewed for more information. Also through the use of questionnaire which will be prepared and sent to respondents in the selected offices named above.
The constraints to be encountered include money time and cooperation of the employees. The recommendation is to ensure that available resource are used to perform their function there must be proper accountability. This is provided by the accounting system and policies adopted by this industry.
Also staff should computer literate since account department is computerized and it saves time and staffs should be sent for professional training from time to time
The study was organized in five chapter I
In chapter one the researcher introduced the topic under different sub heading such as background of the study statement of problems purpose of the study research question testing of hypotheses delimitation of study and scope etc.
A review of related literature was done in chapter two to find out what other view are on the problem from the research it was revealed that pz industries has an effective accounting system which the maintained.
Her accounting procdutive and principles was based on accrued basis.
Chapter three presented the research methodology employed to achieve the purpose of the study. It discussed the preliminary search for relevant information data collection description of population and sample size instrument used for data collection and method of application design of questionnaires and administration the formation of all null hypothesis
Chapter four dealt with data presentation analysis and interpretation.
Chapter five has to do with restatement of the problem summary of the producers used summary of findings conclusion and recommendation.
Title page i
Approval page ii
Dedication iii
Acknowledgement iv
Abstract v
Table of content vi
List of table /figures ix
CHAPTER ONE
1.0 Introduction
1.1 Background of the study
1.2 Statement of problem
1.3 Purpose of study
1.4 Hypothesis
1.5 Delimitation of the study /scope
1.6 Significance of the study
1.7 Assumption of the study
1.8 Definitions of terms peculiar to the study
CHAPTER TWO
2.0 Literature review
2.1 Introduction
2.2 Definition framework of an accounting system
2.2.1 Conceptual design of an Accounting system
2.2.2 Component of an accounting system
2.2.3 Revenue recognition and income reporting
2.2.4 Nature of revenue
2.2.5 Revenue recognition
2.3 Accounting control in relation to the accounting system
2.3.1 Budgeting
2.3.2 Budget system
2.3.3 Types of budget
2.3.4 Budgeting control system
2.4 Computer accounting
2.4.1 Spreadsheet pages
2.4.2 Application of spread sheet
CHAPTER THREE
3.0 Research methodology
3.1 Research design
3.2 Areas of study
3.3 Population of the study
3.4 Limitation of the study
3.5 Implication of the study
3.6 Instrument for data collection
3.7 Method of data collection
3.8 Method of data of data analysis
CHAPTER FOUR
4.0 PRESENTATION ALAYSIS AND INTERPRETATION OF DATA
INTRODUCTION
4.1 Analysis of number of questionnaire sent out and returned.
4.2 Analysis of research question
4.3 Results of testing of hypothesis
4.4 Observation
CHAPTER FIVE
5.0 Summary conclusion and recommendation
5.1 Summary of findings
5.2 Conclusion
5.3 Recommendation
Bibliography
Appendix I
Appendix ii
INTRODUCTION
Te pre requisite for development scientific advancement and adequate management of any business organization is good information system. It is vary important to note that inadequate information in any production industry can influence its activities. A highly productive and organized industry will ensure that the business continues in existence by providing adequate information system.
An accounting system consist of the personnel procedures devices and records used by an organization to develop accounting information and to communicate this information to decision makers. The design and capabilities of these system vary greatly from one organization to the other. In very small business the accounting system may consist of little more than a cash register checkbook and an annual book to an income tax payer. But in large business like production industries an accounting system includes computers, highly trained personnel and accounting reports which affect the daily operations of every department.
The basic purpose of the accounting system in business establishment is to meet the organization need for accounting information information as efficiently and effectively as possible it is therefore important that every business including production industries with much emphasis on Paterson Zucchinis Aba be evaluated to know if there is proper accounting system or if there is more.
Paterson zochonis since inception has made huge success both in the past and present. Although during the first word war they were faced with a square test as young as they were then but as a result of their royal and commited team of employees the business survived.
This research work objective is delving into the utilization of fund and the general accounting and financial control system of production industries with a view of improving the effectiveness of their accounting system of an industry.
1. The appraisal of the performance of Paterson zochonis industries Plc (pz) and to determiner the use of its accounting and financial control measures
2. Evaluation of the information provided by the accepting system as they are useful for decision making.
3. The evaluation of the information system with the view to identify the sources and measure for investment in thee industry.
BRIEF HISTROY OF PZ INDUSTRIES PLC
The story began in the early 1870, a period many enterprising Europeans started their adventure into the west coast of Africa. George H. Paterson, a high hard Scot and George is zochonis a Greek worked together in the wholesaler ship of small trading company fisher and Randale art scoans Bay free town a sierra Leone. So after their meeting a strong friendship developed between these two people out of shared interest and ambition come to lime light when they set up a trading post of their own. Its official name was simply Paterson zochonis,”
1.2 STATEMENT OF THE PROBLEM
A significant proportion of any company yearly budget allocation is being brought into the development and improvement of the company objective. The main objective or aim of any organization is profit making. It is wise to say that these production industries are established for profit making.
Quite a number of people has seen the ineffectiveness and down fall in the activities of some production industries this may arise as a result of poor management inadequate manpower lack of qualified employees or inadequate funding. Meanwhile much had been said about encouragement of product spending and methods of accounting for the income of these production industries.
This research is of the view that the problem is that of interest organization of these production industries, this must have \much to do with computer operation, accounting system producers and control in line with this, the study will dwell on improving the effectiveness of accounting system and control of Paterson zochonis industries plc Aba.
1.3 PURPOSE OF THE STUDY
Based on the background of study and statement of the problem given above the major objective of this Study will be built around the following
i. To evaluate the accounting and financial control measure of p.z plc.
ii. To analyze the information provided by the accounting system according to their usefulness for decision making that improves the operational efficiency
iii. To evaluate the financial system with the view to identify the sources of measures for investment to meet the increasing need to replace obsolute equipment to meet technological innovated and to examine its effect on financial and budget allocation of the industry.
1.4 HYPOTHESIS
This research focuses on the following hypothesis
H0: There is no functional and properly designed accounting system in P.z
H1: There is functional and properly designed accounting system in Pz.
H0 : Poor financial results by Pz. Is not relate to the abuse of stationers
disregard to the maintenance staff and lack of effective purchasing agent.
H1: Poor financial results by Pz. Is related to the abuse of stationeries disregard to the maintenance staff and lack of effective. Purchasing agent.
H0 : Income generated are not enough to cover over head expenses.
H1: The office are not well computerized
H1: The offices are well computerized
1.5 DELIMITATION OF THE STUDY SCOPE
This research is focused on a case study of Paterson zochonis industries plc Aba due to limited time and the difficulty of data collection in production industries.
The research will evaluate the accounting and financial problem facing the industry with the view to determine the necessary control measure in this area. This study will cover accounting for income revenue reporting budgeting and system of control use of computer system and financial practices of the industry.
1.6 SIGNIFICANCE OF THE STUDY
The researcher strongly believes that much of the administrative failure of most of the production industries as a result of the ineffectiveness of the accounting system of these industries.
This research work is geared toward,
i. Bringing the accounting and financial control problem of the production industries to light
ii. Suggesting a financial structure that suits accounting need of production industries.
iii. Making further research into some other functional areas of production industries
iv. Serving as future reference for researcher
1.7 ASSUMPTIONS OF THE STUDY
The following assumption have been made up by the research:
i. The primary objective of the company are known by the employee.
ii. The benefits which may accrue to the industry chosen as a result of correct usage of accounting system can also apply to other firms in the same industry.
iii. That there is substantial and adequate communication and feedback system flowing from top management to all employees and vice versa, within the industry.
1.8 DEFINITION OF TERM PECULIAR TO THE STUDY
For a better appreciation and understanding of the research the following terms have been defined by the researcher below.
ACCOUNTING SYSTEM
These are the system for collecting and summarizing financial data for use in organizing the affairs of a firm and which is aimed at meeting specific needs of the firm.
APPROPRIATIONS
These are resources earmark in a budget for specific purpose and this is recorded in the books of fund as soon as the budget is approved not necessarily when the resources are needed.
BUDGET
A financial statement of estimated income and expenditure covering a specified future period of time and it is usually done before the period begins. A budget is also said to be a financial or quantitative statement prepared and approved prior to a defined period of time of the policy pursued, during that period for the purpose of attaning a given objective. It may include income and expenditure of capital.
BUDGETING CONTROL
Budgetary control is a system of controlling cost which include the preparations of budget co-ordination the department and establishing responsibility comparing actual performance with that budgeted and acting upon result to achieve maximum profitability. It relates expenditure to the persons who incures them so that actual performance on expense can be compared with budgeted expenses. Thus affording a convenient control.
SYSTEM This is a means by which manger of an organization perform their duties co-operatively towards attainment o goals and objectives of the enterprise.
COMPUTER: This is an electron mechanic device capable of accepting strong processing data information and outputting the result of the processing in such a way people can make use of it.
DATA: These are raw fact and figured about flings ideas and events which have not been processed to form an information it could exist in physical numerical or textual form.
INCOME: An amount of money other valuable benefit received or expected to be received by an accounting entity either from its usual activities or form other sources a part from contributions for capital to the entity loans made to the entity and capital receipts.
INCOME AND EXPENDITURE ACCOUNTS
This is a similar account in the business organization to profit and loss account.
INTERNAL CONTROL SYSTEM
This is the whole system of control financial and otherwise established by the management in order to carry on the business of the enterprise in an orderly and efficient manner ensure adherence to management policies safeguarded the assets and ensure as far as possible the completeness and accuracy of the records.
OVERHEAD EXPENSES
The general expenses of running a business include rent and rates heating lighting etc.
TERM LOAN
This is a money for a fixed period of time
FUND STATEMENT
This is a type of statement sometimes used in financial accounting procedure to provide details of a company investment and the sources of its funds for that investment in a particular period it provides an analysis of the flow of funds through an organization and its working capital.
Improving The Effectiveness Of Accounting Systems In Production Industries:
Improving the effectiveness of accounting systems in production industries is crucial for maintaining financial transparency, optimizing operations, and making informed business decisions. Here are some strategies you can consider:
- Integrated Software Solutions: Implement integrated accounting software that seamlessly connects with your production systems, inventory management, and other relevant departments. This allows for real-time data sharing and reduces the risk of errors associated with manual data entry.
- Cost Allocation and Tracking: Develop a comprehensive cost allocation method to accurately distribute overhead costs to products. This helps in understanding the true cost of production and assists in pricing decisions.
- Standard Costing: Utilize standard costing techniques to set predetermined costs for materials, labor, and overhead. Regularly compare actual costs with standard costs to identify variations and take corrective actions.
- Variance Analysis: Perform variance analysis to understand the differences between budgeted and actual costs. This helps in identifying inefficiencies and areas for improvement.
- Inventory Management: Implement a robust inventory tracking system that ensures accurate valuation of raw materials, work-in-progress, and finished goods. This prevents overstocking, reduces carrying costs, and minimizes production disruptions.
- Activity-Based Costing (ABC): Consider implementing ABC to allocate costs based on the activities that drive them. This provides a more accurate view of the cost of individual products and helps in resource optimization.
- Timely Data Entry: Enforce strict timelines for data entry to ensure that financial information is up-to-date and accurate. Delays in recording transactions can lead to inaccurate financial statements and decisions.
- Employee Training: Train your accounting and production teams to understand the interplay between production processes and financial transactions. This facilitates better communication and collaboration.
- Regular Reconciliation: Conduct regular reconciliations between production records and financial records to identify discrepancies and ensure data accuracy.
- Key Performance Indicators (KPIs): Define and monitor relevant KPIs, such as production cycle time, inventory turnover, and manufacturing yield. Align these metrics with financial goals for better decision-making.
- Data Analytics: Leverage data analytics tools to gain insights from large datasets. Analyze production trends, cost patterns, and other relevant data to identify opportunities for improvement.
- Continuous Improvement: Establish a culture of continuous improvement where feedback from the accounting and production teams is used to refine processes and systems over time.
- Audit Trails and Internal Controls: Implement strong internal controls and maintain detailed audit trails to ensure the integrity of financial data. This is crucial for compliance and fraud prevention.
- Collaboration between Departments: Foster collaboration between accounting, production, and other relevant departments. Cross-functional teams can identify and address challenges from different perspectives.
- Regular Reviews and Updates: Periodically review your accounting systems and processes to ensure they are still aligned with the evolving needs of your production industry. Update as necessary to stay current with industry trends and technologies.
Remember that the effectiveness of accounting systems in production industries relies on the integration of people, processes, and technology. Regular communication, training, and adaptability are key factors in achieving ongoing success.