Efficiency and Effectiveness of an Accounting System Essay

CHAPTER 1 THE PROBLEM AND ITS SETTINGS Introduction Most of the world’s work is done through organization – groups of people who work together to accomplish one or more objectives. In doing its work, an organization uses resources – labor, materials, various services, building and equipment. These resources need to be financed, or paid for to work effectively, the people in organization need information about the amounts to these resources, the means of financing them, and the results achieved through using them. Parties outside the organization need similar information to make judgments about the organization.

Human beings have limitations. Everyday transactions cannot be retained in the human brain for quite a period of time without confusions and complications. To avoid these, transactions and other important events should be recorded. Such written records serve as reference in the future. As a small business owner you just need to know the accounting basic principles. As your business grows, you can jump into the deep end of the accounting pool with ratios and monetary unit assumptions later. Let’s just get our feet wet first because accounting is one of the most important components of your small business.

Without it you are just setting yourself up for failure. The most basic definition of accounting is the documentation of a transaction. Paying your website fee affects your small business’s financial condition because it would then have less cash on hand. Such an economic event or condition that directly changes your business’s financial condition is a financial (business) transaction. All business transactions can be stated in terms of changes in the three elements of this accounting basic equation which is to the base of all accounting: Assets = Liabilities + Owner’s Equity

However, this format is difficult to use when multiple transactions must be recorded daily. Therefore, accounting basic systems are designed to show the increases and decreases in each financial statement item in a separate record. This record is called an account. For example, since cash appears on the all balance sheets, a separate record is kept of the increases and decreases in cash. Likewise, a separate record is kept of the increases and decreases for supplies, equipment, notes payable and other balance sheet items.

Similar records would be kept for income statement items, such as revenue, wage expenses, rent expenses, etc. A group of accounts which contains all of the balance sheet and income statement accounts is called a ledger. A list of the accounts in the ledger is called a chart of accounts. The accounts are usually listed in the order in which they appear in the financial statements. The balance sheet accounts are usually listed first, in the order of assets, liabilities, and fund equity. The income statement accounts are then listed in the order of revenues and expenses.

Assets are resources you own. Examples of assets include cash, account receivables(money owed by customers (individuals or corporations) to another entity in exchange for goods or services that have been delivered or used, but not yet paid for), supplies, prepaid expenses (such as insurance) buildings, equipment, and land. Liabilities are debts owed. Liabilities are often identified on the balance sheet by titles that include the word payable. Examples of liabilities include: accounts payable (money owed to vendors for products and services purchased on credit), notes payable and wages payable.

Equity is the owner’s right to the assets of their business. Revenues are increases in the owner’s equity. Examples of revenue include sales and commissions. Expenses are assets used up or services consumed in the process of operating your business. Examples of typical expenses include wage expense, rent expense, utilities expense, supplies expense, and miscellaneous expense. A chart of accounts is designed to meet the information needs of an owner’s financial administrators and other users of its financial statements.

Within the chart of accounts, the accounts are numbered for use as references. A flexible numbering system is normally used, so that new accounts can be added without affecting other account numbers. Theoretical Framework of the Study People are most important resource that an organization utilizes. The use of a new machine does not take into account the attitudes and expectations of employees that can reduce productivity and give rise to serious human problems like any other employees in organization that have their individual values, attitudes perceptions and life styles.

When they are unsettled about any of these factors, efficiency on the job will be impeded and cooperation very difficult to obtain. The theory of operations management views all activities necessary to purchase and deliver a product or service desired by customers using a system approach represented by the input-process-output method. The input-process-output sequence in operations management is a useful way to conceptualize productive systems or means by which resource inputs are transformed to create useful goods and services outputs.

The same theory further claims that the effectiveness of the operations functions and the subsequent steps of systems improvement hinges on a careful analysis of inputs, transformation process and outputs of production as well as external environment. Inputs include needs of customers, labor and management information technology, fixed assets that are relevant to the transformation process. The transformation process incorporates planning, operating and controlling of the system. Managing the productive system involves the controlling, the conversion process and all the variables that affect its performance.

Input is the human, physical, material, financial and information resources that enter the transformation process and leave it as outputs. Outputs on the other hand, consist of product and services. Information feedbacks from the customers concerning the outputs are essential for process control. Operations are also influenced by the external factors, such as safety regulations and labor practices as well as information dissemination. The theory of operation management is related in the present study in a way how human factor affects the final output. In accounting system, every human intervention counts.

It is the human mind that thinks, the system that process and the output is whether beneficial or not but as always favor to the company. By understanding the concept of operation management, then we can evaluate that its not merely for manufacturing rather it could be applied in the hotel industry with the topic of accounting system. Conceptual Framework The study assumes that the Bayfront Hotel has efficiently provided the services that it has, based on the existing accounting procedures that sought to undertake as mandated by law. To illustrate the concept, figure 1 shows the framework upon which the study is based. INPUT | |OUTPUT | |Person – related factor | |Level of Efficiency and | |Educational qualifications | |Effectiveness of the Accounting | |Relevant trainings, seminars, workshops | |system in terms of: | |attended | |Collection | |Work – related factors | |Records and Reports | |Material resources as per usability, | |Disbursements | |adequacy and availability | | | |Administrative support | | | Figure 1: Paradigm of the Study The first box represents the independent variable of the study which include the personnel related factors on educational qualification and relevant trainings attended, and the material resources’ usability, adequacy, and availability. The second box in the figure represents the dependent variable which shows the level of efficiency and effectiveness of the accounting system in terms of the services rendered – collection, records, and perception and disbursements. Both of them are connected by a line in the middle which proposes that one influences the other.

Statement of the problem The study aims to look on how will the human and material resources influence the level of efficiency and effectiveness of the Accounting system of Bayfront Hotel. Specifically, the study sought answers for the following questions: 1. What is the profile of the respondents in terms of the following: 1. Person – related factors 1. Educational qualifications 2. Relevant trainings and seminars attended 2. Work – related factors 1. Material Resources 2. Administrative Support 2. What is the level of efficiency and effectiveness of the accounting system in terms of: a) collection b) records and reports ) disbursements 3. Is there significant difference between the perception of the front office personnel and administration office on the level of efficiency and effectiveness of the accounting system? Statement of Hypothesis In connection with the problems of this study, the following null hypothesis has been provided. 1. There is no relationship between the person and work – related factors in the level of efficiency and effectiveness of the accounting system. 2. There is no difference in the perception of the front office personnel and administration officers in terms of the level of efficiency and effectiveness of accounting system of the hotel.

Scope and Delimitation of the Study This study is conducted to determine the level of efficiency and effectiveness of the accounting system of the Bayfront Hotel in Subic Bay Freeport Zone with a total (38) thirty-eight total number of respondents. This study was limited to the hotel’s accounting system, efficiency and effectiveness in collection, records and reports, and disbursements. It covers also the personnel related factors such as: educational qualifications, relevant trainings, seminars, and workshops attended. It likewise covers the work – related factors in terms of material resources in its way of usability, adequacy, and availability.

It was further delimited to the responses on the locally prepared questionnaires in data gathering techniques utilized to assess the level of efficiency and effectiveness of the accounting system. Significance of the Study The researcher believes that this study will be a tool to widen the knowledge of the readers regardingthe efficiency and effectiveness of an accounting system in a hotel industry. The importance of the study can be viewed on the following perspective: Board of Directors: Since most of the BOD of the hotel are Koreans, the findings will guide them in managing the hotel more effectively in the future whether to expand, to make additional improvement and finding to support, the needed human as well as material resources of the department.

Administrative Officers: This study will give the admin officers ideas in which point to strengthen especially in the important reports that they will need in decision making, future planning and control. Front Officers/Service Officers: Guest Service Assistant (GSA) is not necessarily accounting graduate. Thus, this study will help evaluate who needs knowledge of basic accounting principles since most of initial transactions done in front office and point of sale system. Department Personnel: This study may help them to be enlightened about how certain basic procedures are done in the accounting system and through their assessment of its efficiency and effectiveness, strengths and weaknesses maybe determined and perhaps through the appropriate actions from the administration officers, improved services in their part will be realized.

To the Guest: The guest will ultimately benefit in the result of this study in as much as they are the main client of the hotel for the improved services such as collection and records of accounts. They can gain insights on how the money they spend for their education is fairly accounted for. To Other Hotels/Restaurants/Resorts: A study of the accounting system of the hotel may or may not be beneficial to other hotel system in the vicinity. For hotels soon to open, they can adopt the given system which can suit their needs and situation. To the Government: This study will provide our local government an understanding on how the Bayfront’s accounting system works. It also gives the edge of easy auditing especially on the tax remittances and other private sector’s obligations.

To the Educational Institution: This study will give the schools an idea that not only Hotel and Restaurant Management student can be send to the hotel industry as part of their on-the-job training. Mostly, the perception is, hotel industry accepts only HRM student. But with this study, it gives a broader meaning that even accountancy student can have their OJT in the hotel industry provided that they will be in the accounting department. To the Upcoming Researchers: This study will give them an idea on how efficient and effective an accounting system in the hotel industry. It may serve as a guide for them in the future revision especially if the ranking of the hotel is on its peak. Locale of the Study

Subic Bay’s rich history dated back from the 1800’s as a Spanish Port, a full sheltered wharf amidst lush tropical rainforest. Subic Bay became a unique project on the site of a former United States Naval Base. Suffered the devastating eruption of Mt. Pinatubo in 1991 and has since been transformed into a bustling eco-tourism and commercial hub. Subic Bay is highly secured and is covered with dense forests feeming with flora and fauna including rare butterflies and bats. Unspoiled beaches abounds northward facing the China Sea, exceptional scenery, forest trails, water sport activities, coral reefs and ship wrecks to explore. It boasts an ocean park and safari treks, there’s just no stopping this Freeport from creating endless destination to behold.

And since Bayfront Hotel is strategically located in the Subic Bay Freeport Zone, the petite yet influential economic powerhouse is approximately 127 kilometers north of Manila and is only a two-hour drive from the country’s capital. Bayfront Hotel is owned and operated by M&A (Subic), Inc. has been created not only to offer local manpower enhancement, but also to achieve the Company’s primary goal which is to offer. Bayfront Hotel in Subic is a Mediterranean – inspired hotel with a charming, intimate villa set-up. They offer 38 fully air-conditioned rooms with hot and cold water facilities, minibar, IDD/NDD, in room WIFI internet access and much more. Best of all, selected room featuring a spacious verandah that looks out into the beautiful sun-drenched sea. Be pampered by a seasoned masse used.

Take care of your business via fully equipped business center and enjoy a sumptuous meat at their Tong Kyung Am oriental Restaurant. While their facilities are truly world-class, it is still the genuine Filipino hospitality they offer that keeps guests coming. Definition of Terms For clearer understanding, the following terms have been defined conceptually or operationally. Accounting. This pertains to the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of information. Accounting system. This is a special field concerned with the design and implementation of procedures for the accumulation and reporting of financial data.

The keeping maintaining of documents and records to reflect the financial condition and activities of the government agencies and to keep account in such detail which is necessary to meet the financial information needs. As used in this study, it refers to the system used in the collection, records and reports, and disbursement procedure of Bayfront Hotel. Adequacy. The term means equal or sufficient for specific requirement. This operationally refers to the sufficiency of required equipment, supplies and materials used in the accounting office. Availabililty. This refers to the quantity of equipment and amount of supplies and materials present in the accounting office whether purchased, donated or improvised. Collection. It means claims as due and receive payment for or to receive payment.

In this study, it refers to the revenues and income received by the hotel from the guests / clients with contracted rate. Disbursements. As used in this study, these are obligations incurred by the college and disbursement made for such obligations. Also, this constitutes all cash paid out during a given period. Effectiveness. As used in this study, it is the quality of the service rendered in terms of collection, records and reports, and disbursements of the hotel. In layman term, it is doing the thing right. Efficiency. As used in this study, it is the accuracy and timeliness of the collection, records and reports, and disbursements of the hotel. In layman term, it is doing the thing right. Records and Reports.

The term refers to documents maintained and financial statements produced that could explain the agencies financial operation and condition resulting from the economic activities during the period. As used in this study, this means all the required documents and reports being processed and done and are required to be submitted to the Board of Directors and remitting government agencies. Usability. Usability means suitable or fit for use. As used in this study, this measures how usable are the equipment and supplies within the office. ———————– PROCESS Questionnaire Interview Observation Survey Statistical Treatment Documentary Analysis