AIS And XBRL – Designing with Best Practices Essay

AIS And XBRL – Designing with Best Practices
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AIS And XBRL – Designing with Best Practices
The organization I chose to focus on is a small firm dealing with agricultural products. The firm does not have an established accounting information system since it does not deal with many cashflows. The firm is in the grocery line of business, which means that it has a quick cash flow and cash outflow. It only deals with perishable products, and this has increased its need to expand the customer base. Such would reduce the number of losses incurred from damaged goods. It would also increase the firm's cash flow, thus requiring it to implement an accounting system (Muhammad et al., 2019). Its current market position is that the firm is among the best performing in the area. In the recent past, the firm has been expanding its operations due to an increase in demand.
Among the practices that will be implemented in this business is separating personal expenses from the firm’s expenses. Given that the firm is small in size, combining these expenses has been a common case. In some cases, it has resulted in confusion regarding the amounts of profit generated. One individual owns the firm, and they tend to count it as a personal asset, thus making it easy to combine its expenses with personal expenses. If a business is to succeed or be in a better position in the market, it is important to separate the expenses. Such provides the owner with a clear picture of the firm’s performance. As a result, they would make the necessary changes to improve the business's performance.
Another practice that will be implemented is the automation of invoicing and payments. These activities are currently being done manually. As a result, it puts the firm at a high risk of financial errors. If the responsible parties sent the wrong invoice, the firm could incur a loss that would impact its operations in the future. Accounting technology has played a huge role in the reduction of accounting errors. Therefore, the firm can take advantage of such technologies to make the reporting process more effective than it currently is. An example of a technology that can be implemented in the firm is the Billing software. The software is affordable, and it helps in the creation of automated professional invoices for the business. A lot of businesses have used the technology, and proved to be effective in reducing accounting errors resulting from faulty billings. Therefore, the firm will benefit a lot by using this technology.
Implementing various internal controls would also help the firm improve its performance. Such controls will be implemented in the accounting reporting system to help reduce fraud cases and accounting errors. The controls will make it easy for the organization to meet its financial obligations since it will have a plan to follow (Amara & Benelifa, 2017). The internal controls might involve strategies aimed at preventing the firm from wasting revenues. For instance, the firm has been combining personal expenses with business expenses. Such an act has resulted in a wastage of the business money used in settling personal expenses....