The aim of this coursework is to design a new system for a company called Taki casuals importers and exporters. This company imports a variety of textiles from England and the UK and sell them wholesale in Europe, mainly in Italy and France. Currently the company uses a manual based system to manage their finances, this involves using a lot of filling cabinets to store the data and invoices and then calculating the company’s profit or loss. This method isn’t very accurate and it takes along time to make any calculations. The new system I will design will model the company’s finances and will be user friendly so that the user can be efficient.
My new system will model all the information needed to work out if the company is making a profit/loss. Examples of calculations are trade price, duties and tax, freight, selling price, quantity sold, wages, rates, electricity, gas, water, advertising, motoring, telephone etc. the system will include cell-referenced formulas so that if any numerical data changes, subsequent relevant data will adjust automatically.
Using my new system the company will be able to use model situations to find out what amount they need to sell to break-even or how much profit will they make if they sell a certain amount of their product. They will also be able to fin out what effect a price reduction will have on their profit. This can all be done by changing a few quantities or a few prices and the formulas will automatically adjust the profit/loss. With the current system the company is unable to do this because it is impractical and will take a lot of time just to find out the results for one small criteria but with the new system answers to many criteria changes can be found instantly.
The company’s current situation will have to be taken into account, this will be achieved through an interview with the people concerned after which the advantages and disadvantages must be studied.
What are the advantages of having a computer system?
Computers are very accurate.
Computers can work continuously 24 hours a day.
Less paperwork involved, it is all stored and easily accessible from the computer
Low risk of data being erased as it can be stored on various backups.
Not a lot of energy is needed to get data on the computer and saves time, it is efficient
Data can easily be presented in tables, graphs etc.
Changes and corrections can be performed at the touch of a button.
Validation check minimises the chance of any errors.
What are the disadvantages of having a computer system?
* The hardware and software can be very expensive.
* Employees will need to be trained regarding usage of the computer.
* If the computer crashes or there is a power cut, access to data in the computer is not possible.
Planning for the task
There are various steps that I need to go through to accomplish my task:
Research: I will need to investigate the structure of the business, who does what and what how the finances are kept. Also how they sell and buy the goods.
Gather information: I will need to interview the owner/manager concerning sample prices and type of clothes sold by his company.
Enter information: After I find out what the company needs for their system it will be typed onto a suitable spreadsheet.
Test: Once the system has been organised, it will be put into practice, so that I can see if it works properly. For this the finances will be modelled.
Evaluation: Finally I will have make sure that the system meets it criteria, any problems will be solved and any improvements should be made.
I studied the company, so that I could find out how the business was structured. I found out who does what and how the finances are recorded. The owner explained how he runs his business.
The company imports clothes from England and the UK, clothes such as trousers, shirts and jackets both men’s-wear and ladies-wear are imported. On top of the price of the clothes, they have to pay for Freight, be it by air or sea, import duty and clearing charges. The company also employs four workers not taking into account the owner, two are only involved in the ware-house, they are only involved in manual labour and do not have anything to do with the finances.
The other two, phone up shops which would buy their clothes, appointments are made and samples are shown to the buyers. They also go to wholesale “cash and carry” shops around the country and sometimes even to mainland Europe. If any orders are placed they are written down and then processed when they get back to the office. The warehouse workers are told and they take out the quantity of boxes required and deliver them to the buyers. When the buyers receive the goods they sign a delivery note, one copy is left with them and the other is for the company itself. An invoice is written out by hand, and for this again one copy is kept for both the buyer and the company itself. All the invoices are gathered in a file and at the end of the month all the data is added up, there is a file where a record of what has been bought is kept. A tally is kept for how many of each item in each colour has been sold and that is then taken away from the amount bought. He calculates how much he makes in a month and then takes away his overheads.
At the end of the year all additional costs are calculated such as taxes and rates to the council. This is taken away from the total gross profit made in the year. The financing process takes up a whole day and means that stock and company progress cannot be looked at in the middle of the month.
The tasks of calculating the finances is upon the owner, he doesn’t leave it for his employees or hire an accountant.
Interview with the Owner of the business
How long has this business been established?
It started off from home over 20 years ago when just me and my brother starting selling clothes.
What is involved in running your business?
I import the clothes from the east, which are stored in my ware-house while my employees find customers who we supply, or the clothes go directly to my customers who have booked them in advance. If any stock is left over at the end of the season and it is going out of fashion it is cleared at a discounted price. If the delivery is huge we have to use transport companies to deliver the goods, but if the deliveries are small or reasonable we use our own van which is operated by one of the warehouse workers.
How do you record your finances, what is involved and how long does it take?
I give the customers invoices when they are given the goods, and our company keeps a copy of the invoices that are filed. At the end of each month I personally add up the bills and calculate the sales, decrease/increase in stock levels, profit/loss, monthly expenses and VAT. This process takes up the whole day as the sums are lengthy and take up a lot of time. At the end of the year income tax is calculated referring to the profit or loss made throughout the twelve months.
How useful will a computer-based system be to your company?
The computer system will enable my company to keep track of sales, expenses, etc.. This will mean my company can solve any problems (like if our expenses start spiralling out of control) immediately we can adjust the way in which we run our company, with a computer based system I will have better control over my company and its finances.
What advantages and disadvantages do you think a computer system has?
The computer is accurate and will save me a lot of time but I am worried about the cost of a PC and software needed to run my finances, also if anything happens to the computer all my finances will be destroyed.
– Objectives of the new system
The new system must be able to explain to the user the amount of clothes of a certain type he has sold and how much it cost, also his expenses should be shown so that the profit/loss can be worked out. The information will need to be displayed in an organised way so that it is user friendly and the user can access the data easily. For this the information needs to be shown in some sort of order, i.e. it needs to be shown in rows and columns. The system must be able to save the information so that progress can be tracked and any changes made.
– How will the new system perform?
The new system needs to be accurate, as it will perform important calculations. If any mistakes are made then overall profit/loss can become incorrect. It also has to perform quickly, when any of the data is changed, automatically all relevant data should change.
– The information can be put under the following suitable headings:
Type of clothes
Retail price (excluding VAT)
Amount of VAT
Retail price (including VAT)
Total price (excluding VAT)
Total price (including VAT)
Input, Process and Output Requirements
Identified inputs and data store requirements:
– The data that will be inputted will be figures of prices on clothes. This will be up to the system user where he/she gets it from.
– The owner inputs sales data
– Also things like dates, customer details, addresses phone numbers, VAT figures will also need to be inputted into the system. Again this will be from the system user where he/she obtains these.
– The worksheets will store much data. It will store things like prices, customer details and calculation formulas.
Identified output requirements:
The outputs my system has to provide are
– A printed out document of which should be an invoice specifying details of the customer, price of clothing and expenditure.
– A clear means of calculating the data figures, putting them into perspective according to the system.
– I will use need to show the VAT before and after purchase so I will have to multiply VAT (17.5%) to all the prices.
– I will use formulas, mainly vlookup functions to calculate the data.
– I will multiply the quantity with price of the goods.
– I will total prices and sum up other expenses as well.
Evaluation criteria- performance indicators
To test if the new system will work a number of tests will need to be carried out.
1. Easy to use
2. Easy for the user to locate a certain sheet by the use of macro buttons
3. Useful to keep track of products and sales
4. Can change prices of products, using sales and product information
5. Efficient to use and to store data
6. Kept in an organised order, so that it is easy to access
7. Easy to update and copy , delete and edit sheets
8. Data entry made easy and all the formulae is accurate so that no mistakes are made and all data is accurate
9. The system should be easy to use by anyone who has never used the program before or someone who has basic knowledge of the program or a low level of IT skills
10. Should be able to receive the specified sheet with ease
11. User should be able to understand all the given commands
12. User should be able to solve any problems by looking through the manual and being able to fix it with minimum effort
13. If invalid data is entered there should be an error message that appears on the screen
14. The summary of data should appear in a good way so that it can be analysed easily
15. The person who will be using the system for the finances (the owner), will test to see if it is easy for him to use the system and whether it is user friendly to him.
16. I will also have to see if my new system was faster to operate or whether it was quicker to use the company’s old system. To do this the same the owner will test figures, first on the computer and then by hand, this will prove to us which one is quicker and easier. If there are any errors modifications will be made to improve the system.
17. The system must be accurate, test using valid and invalid data to see if the system outputs the correct responses.
18. Easy for user to locate a certain worksheet by the use of macro buttons in five seconds
19. If invalid data is entered then an error message should appear within two seconds
20. Selecting a certain sheet and seeing how long it takes the program to respond to the request. It should take three seconds
21. Should update calculations, copy to invoice, delete and edit the required worksheets in less than ten seconds
The computer I will need for use with the system will need to be of reasonable speed, with adequate memory and hard disk. It will also be ideal if the firm owned a printer so progress can be put on paper. This hardware should be reliable and have minimal chance of technical problems.
I own a Pentium III Processor, 650 MHz computer with 12 GB and 256 MB ram, this is quite fast and suitable for me to design the system. The company also owns a computer that is a Pentium III Processor, 498 MHz with 4.22 GB and 128 MB ram, which is reasonable for use of my system. This computer is where the system will initially be used, it takes twenty-six seconds to log on and enter the spreadsheet package Microsoft Excel. The response to the change of any data was immediate, the time it took to save the data is only two seconds and the time it took for the printer (a Cannons BJC- 240) to respond was only two seconds. The computer took seven second to log off from getting out of Microsoft Excel to switching off the computer. For the computer to save data on a floppy disk it took five seconds.
Both these computers are suitable for design of the system and for using the system because they can do basic tasks at a reasonable speed. The speed of my computer is not important because I will only be designing the system but the company will be using their computer to put the system into practice. If the firm has a computer of good speed it will mean the users time will not be wasted waiting for tasks to take place and also means that the company saves time and also money.
The company has Windows 98, MS Office 97 (which contains Word, Excel, Access and MS Publisher). It contains an operating system, utility programmes (designed to make life easier for the user), Programming Language Compilers/interpreters (used to translate the statements in a programming language into a form the computer can understand). Also has performance monitoring software (monitor and analyse on the performance of the PC and communications software (Internet)).
The company has general-purpose software containing common application packages like Word Processing, Desktop Publishing, Spreadsheet, Database and Graphics Packages.
User’s skill level
The users of the system will be Mr Taki,- the owner and manager of the company and he is computer literate, and can use MS Excel, as previously he had taken an IT course at a near by college, to improve his skills. This was an advantage as he would be able to use the new system with ease. However he said he only knew the basics and therefore would need a very easy to use system to help him do the accounts. He sorts out most of the day-to-day sales data and does all the calculations by hand. He knows how to enter data and perform basic calculations and housekeeping tasks.
The aim of the interview was to find out what the Mr Taki wanted the new computerised invoice system to do. From all the answers that I got, I will concentrate on the most common problems that have arisen and try to amend them in the new system, so that overall it can be made easier, and less time consuming.
Data Capture and Input
There are various ways of entering the information onto a computer so that there are various ways of entering the information onto a computer so that the data can be processed or stored onto the computer. I will take a look at the main ones listed below:
Key To Disk – This is typing the data onto the computer using a keyboard, although this isn’t expensive and is easy to use, it does take quite a lot of time and errors are often caused by this method. But still, this method is practical and simple and can be used for our system.
Barcode Reader and POS – The items can be labelled with barcode labels and be scanned through a machine when the item is sold, and all data
Regarding what has been sold can send to the point of sale system (POS) and there all information is recorded. With the data in the POS the owner can evaluate the patterns of sale and what is selling and what isn’t. The company I am designing a system for sells in bulk and has few customer so there will be no point using this because this is mainly used at retail outlets where they have many customers and have to process material quickly.
Optical Character Recognition – This equipment scans the page containing text and studies each character and compares them with what has been stored. Although some of these can read the text quickly there is an extremely high rate of errors being caused. This will not be used because the equipment is expensive and isn’t reliable.
Optical Mark Reader – This scans marks and converts them into characters. My system consists of letters and numbers and not marks therefore there aren’t going to be any marks to convert.
After looking at all the method I can clearly see that information will have to be typed onto the computer. A lot of data is not going to be repeatedly typed and there isn’t going to any training needed to use this method. This method is easy, cheap and practical and as my company does not need to enter much information onto their system they will not need to use something like a barcode reader which is used for processing large amounts of data at a fast speed.
The company I am designing a model for does not deal with an enormous amount of customers and orders, they already make an invoice every time an order is placed. I have decided to design an invoice on which they can enter all information and a record will be kept, the information from the invoice can then be inserted onto the main spreadsheet easily. All the calculations will be made automatically as formulas will be used, only the ref no. and quantity will have to be entered and the rest will be done automatically.
After the invoice has been written, the user will print it and give it to the customer and keep one 4 himself
Data Verification is checking that what is on the invoice is the same as what has been entered onto the system. Re-checking that the correct data has been entered can do this. You can also get someone else to re-type the information and the computer will check the two against each other. If the data is identical then it will be processed for further calculations and if not then you are told to check it. This can be expensive as two people have to type the information and it takes much longer. This method will be both time consuming and money consuming but proof reading will be useful if done by the same person.