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Accounting Systems Technology for the 21 st Century. Presented by Liv A. Watson Today’s Agenda. Accounting systems technologies and future trends There will be two 10 minutes breaks and a 1 hour lunch XBRL Questions and comments are always welcome.

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accounting systems technology for the 21 st century

Accounting Systems Technology for the 21st Century

Presented by

Liv A. Watson

today s agenda
Today’s Agenda
  • Accounting systems technologies and future trends
  • There will be two 10 minutes breaks and a 1 hour lunch
  • XBRL
  • Questions and comments are always welcome
scalable architecture accounting as a system
Scalable Architecture Accounting as a System










2 tier 3 tier and n tier
“2-tier,” “3-tier,” and “n-tier”
  • “A Tier” describes how the computing workload is distributed in a client/server system
  • When you separate the application logic from the presentation and data storage layers, you create a third layer: the application logic later. So 2-tier becomes 3-tier.
  • “n-tier” is used describe those architectures in which there is more than one application logic layer

What is Governments role in the development and operation of the Net?

  • Should (and if so, how) states be able to tax activity on the Net passing through their jurisdiction?
  • Can we effectively eliminate or limit access to offensive material, especially by young people?
  • How can we I improve the security of data traveling on the Net?
enterprise resource planning erp systems
Enterprise Resource Planning (ERP) Systems
  • MRP (Material Requirement Planning)
  • MRP-II (Manufacturing Resource Planning).
  • ERP
    • Human Resources
    • Finance
    • Customer Service
    • Engineering
  • Institute of Management Accountants (IMA) provides a course, “Benchmarking ERP Systems”
The operating system (O/S) is the most important program that runs on a computer:
    • Recognizing input from the keyboard
    • Sending output to the display screen
    • Keeping track of files and directories on the disk
    • Controlling peripheral devices such as disk drives and printers
operating systems can be classified as follows
Operating systems can be classified as follows:
  • Single-tasking
    • Generally supports only one a process at a time
  • Multi-user
    • Allows two or more users to run a program at the same time      
  • Multi-processing
    • Supports running a program on more than one CPU
  • Multi-tasking
    • Allows more than one program to run concurrently   
  • Multi-threading
    • Allows different parts of a single program to run concurrently
  • Real time
    • Responds to input instantly. General-purpose operating systems, such as DOS and UNIX, are not real-time.
introduction and history
Introduction and History
  • 1945 -- 1955
    • Bare machines -- vacuum tubes and plug boards
    • Designed by J.W.Mauchly and J.P.Eckert of the University of Pennsylvania in 1945
    • No operating system
  • 1956 -- 1965
    • Transistors and batch systems
    • Clear distinction between designers, builders, operators, programmers, and maintenance personnel
  • 1965 -- 1980
    • Multiprogramming
  • 1980 to present
    • Personal computers and workstations
    • Network operating systems
network operating systems nos
Network Operating Systems (NOS)
  • Single User DOS Applications:
    • Local workstation only: not written to work on network.
  • Network-Aware Applications
    • Will work on a network, but only for a single user.
  • Multi-user Applications
    • Applications specifically written for networks.
    • Email, Scheduling, Groupware
peer to peer nos characteristics
Peer-to-Peer NOS Characteristics
  • Each machine sends, receives, and processes data files (Client and Server).
  • Simplistic in design and maintenance.
  • Used for smaller number of users (10 to 50).
  • Used when users are in same area.
  • Used when network growth is not an issue.
  • Less expensive (no dedicated server).
  • Slower and less secure than File Server
certificate authorities
  • There are four principal types of certificates:
    • Certification Authority
    • Server
    • Personal
    • Software Publisher
viruses bugs and worms
  • A virus is a program that attaches itself to other files.
    • Viruses can be funny, irritable or destructive.
  • A bug is a flaw in a browser that can be used by a hacker to circumvent a browser’s security functions.
  • A worm is similar to a virus in that it can be destructive or irritating.
    • Makes copies of itself and send them to other users
protection viruses bugs and worms

There are steps that a user can use to protect themselves from these dangers. They include:

  • Know your source of files and messages
  • Use a virus monitoring software to scan incoming files or set the software to continuously monitor activity on your computer or server
  • Only open files after they have been scanned
  • Maintain frequent backups so that you can recover from a crash or other problem
third party assurance services
  • WebTrust
  • Better Business Bureau
e insurance policies
e-Insurance Policies
  • For example, if your company unwittingly spread a virus that wiped out customers’ database.
    • ACE USA
    • AIG
    • Lloyd’s of London
    • Marsh
    • St. Paul
    • Zurich
relational database management systems rdbms
Relational Database Management Systems (RDBMS)
  • A type of database management system that stores data in the form of related tables.
    • The data is integrated into a single conceptual model and a single location
    • The data is independent from the application programs
    • The data is shared
  • Today, most leading accounting software manages data almost exclusively on RDBMS technology
data marts
Data Marts
  • Data marts are workgroups or departmental warehouses, which are small in size, typically less than 10GB
  • Meta Data
  • 1.The technical data
    • contains a description of the operational database and a description of the data warehouse
  • 2.The business data
    • contains a description of the operational database and a description of the data warehouse
relational accounting and transaction triggers
Relational Accounting and Transaction Triggers
  • A trigger is a piece of code stored in the database.
    • Row-level triggers can be executed BEFORE or AFTER each row is modified by the triggering insert, update, or delete operation.
    • Statement-level triggers execute after the entire operation is performed
why would accountants benefit from triggers
Why would accountants benefit from triggers?
  • Recording the name of user who tried to change an account code
  • Recording the data and time a transaction occurred
  • Ensuring that a transaction is in balance before it is posted to the ledger
  • Alerting the accountant to a budget overrun by sending an e-mail
  • Printing out an audit trail
  • Warning a user of unposted transactions before a report is to be run
  • Checking that codes added to one table exist in other related code tables
  • Deleting data from an address table when its customer owner is deleted
benefits of rdbms
Benefits of RDBMS
  • Scalability
  • Transaction integrity
  • Centralized business rules
  • Centralized data allows real-time accuracy in transaction processing since the single data occurrence is always updated
  • Shared data eliminates inconsistencies when data is stored in several places and not updated in all locations    
  • Shared data means that all application programs use the same data   
  • More informed decision making, based on one corporate database
  • Improved cost efficiencies
  • Higher level of customer service
  • Enhanced asset/liability management 
data warehousing
Data Warehousing

Bill Inmon coined the term "data warehouse" in 1990. His definition is:

"A (data) warehouse is a subject-oriented, integrated, time-variant and non-volatile collection of data in support of management's decision making process."

information is stored in files or tables
Information is stored in files or tables.
  • The emerging problem is not how to retrieve data, but how to manage, utilize and optimize the mountains of data our increasingly efficient information systems are collecting. Within this explosion, the challenge of data warehousing has become evident.
  • Terminology:
    • A file is made up of a number of records.
    • A record is made up of a number of fields, each of which has a specific identified name.
what then is a data warehouse
What, Then, Is a Data Warehouse?
  • Data warehouses assemble the data from heterogeneous databases so that users query only a single point
  • Internet and World Wide Web technologies have had a major impact on data management. Many vendors now have interfaced their data warehouses to the Web
  • Intelligent agent technology will play a major role in locating and integrating various data sources on the Web
  • A data warehouse brings together the essential data from the heterogeneous databases, so that users need to query only the warehouse
data warehouse applications include
Data warehouse applications include:
  • Sales and marketing analysis across all industries
  • Inventory turn and product tracking in manufacturing
  • Category management, vendor analysis, and marketing program effectiveness analysis in retail
  • Profitability analysis or risk assessment in banking
  • Claim analysis or fraud detection in insurance
what is business intelligence tools
What is Business Intelligence Tools?
  • Business Intelligence Tools is a kind of software that gives users the ability to access and analyze information that resides in databases throughout an enterprise.
  • IT Systems that are designed specifically to meet the needs of the knowledge workers.
bit v op
Built to enable exploration analysis, and presentation of information

Relatively few inquires which are often wide in scope

Designed to get data out

Used to automat routine, predictable tasks

Large volume of small transactions that are limited in scope

Designed to get data in

the following are three types of business intelligence tools
The following are three types of Business Intelligence Tools
  • Multi-Dimensional Analysis Software - Also known as Multi Software or OLAP (On-Line Analytical Processing) - Software that gives the user the opportunity to look at the data from a variety of different dimensions.  
  • Query Tools - Software that allows the user to ask questions about patterns or details in the data.
  • Data Mining Tools - Software that automatically searches for significant patterns or correlations in the data.
data query and reporting tools
Data Query and Reporting Tools
  • Multi-Dimensional Analysis Software
    • Also known as: OLAP (On-Line Analytical Processing)
  • Is the process of analysis that involves organizing and summarizing data in a multiple number of dimensions.
olap value added decision support
OLAP “Value Added Decision Support”
  • "Think of an OLAP data structure as a Rubik's Cube of data that users can twist and twirl in different ways to work through what-if and what-happened scenarios."

– Lee, The Editor, Datamation (May 1995)

new analytical approach
New Analytical Approach
  • One of the most prominent and pervasive alternative approaches to managing analytical data lies in the relationship between knowledge management (KM) and decision support.
  • The ability of any user, anywhere, to ask any questions of any database, at anytime.
data mining concept and useful terminology i
Data Mining Concept and Useful TerminologyI
  • Data Mining is the process of finding hidden patterns and relationships in the data
  • Data Mart is a database that has the same characteristics as a data warehouse, but is usually smaller and is focused on the data for one division or one workgroup within an enterprise.
data mining concept and useful terminology ii
Data Mining Concept and Useful TerminologyII
  • Data Migration is the movement of data from one environment to another.
    • This happens when data is brought from a legacy system into a data warehouse.
  • Data Mining is the process of finding hidden patterns and relationships in the data.
benefits of bi
Benefits of BI
  • Supply chain management
  • Fraud management
  • Risk management
  • Product management
  • Financial controls
transaction processing1
Transaction Processing
  • Transaction processing means that master files are updated as soon as transactions are entered at terminals or received over communication lines.
  • Batch Processing Versus Transaction Processing
characteristics of transaction processing systems
Characteristics of Transaction Processing Systems
  • Provide fast, efficient processing to handle large amount of input and output
  • Perform rigorous data editing to ensure that records are accurate and up to date
  •  Are audited to ensure that all input data, processing, procedures, and output are complete, accurate, and valid
  • Involves a high potential for security-related problems
  •  Support work processes of large number of people; loss of the system can cause a severe and negative impact on the organization
transaction process monitors
Transaction Process Monitors
  • TP Monitor makes sure that groups of updates take place together or not at all
  • This also supports the four TP requirements:
    • Atomicity
    • Consistency
    • Isolation
    • Durability
1 atomicity
1. Atomicity
  • All transactions are either performed completely - committed, or are not done at all; a partial transaction that is aborted must be rolled back.
2 consistency
2. Consistency
  • The effects of a transaction must preserve required system properties. For instance, if funds are transferred between accounts, a deposit and withdrawal must both be committed to the database, so that the accounting system does not fall out of balance.
3 isolation
3. Isolation
  • Intermediate stages must not be made visible to other transactions. Thus, in the case of a transfer of funds between accounts, both sides of the double-entry bookkeeping system must change together. This means that transactions appear to execute serially (e.g. in order) even if the work is done concurrently.
4 durability
4. Durability
  • Once a transaction is committed, the change must persist, except in the face of a catastrophic failure.
elements of the transaction processing
Elements of the Transaction Processing
  • Accounting cycle
  • Ledgers
  • Journals
  • Trial balances
  • Coding
  • Reports
  • Source documents
imaging processing is the automated technology of
Imaging Processing is the automated technology of:
  • Image processing systems automate and streamline the flow of paper through an organization. Imaging is the automated technology of:
    • Document Storage
    • Document Management
    • Document Retrieval
    • Document Communication.
processing systems are good for
Processing systems are good for:
  • Scanning large amounts of paper-based documents into a computer system and indexing them for quick and easy retrieval.
  • Processing all types of documented information either graphical, full-text of combinations of both.
  • Converts images into a digital format via the document scanner and then stores these images onto a mass storage device, usually a "write-once" optical mechanism.
document image processing within the accounting office

Application Module

Type of Image

General Ledger

Cash transfer and deposit slips, wire transfer request

Accounts Receivable

Sales invoices, checks paid, expense reports

Accounts Payable

Invoices, canceled checks, expense time sheets


Purchase orders, price lists and brochures, agreements


Pictures of items, copies of insurance or title contracts

Fixed assets

Pictures of assets, copies of insurance or title contracts

Human resources

Pictures of employees/applicants, resumes, and professional/educational certificates.

Document Image Processing Within the Accounting Office
  • Saves time by retrieving documents quickly and efficiently at your terminal.
  • Saves time by allowing documents to be shared electronically.
  • Saves money by releasing valuable filing space.
  • Saves money by using electronic forwarding instead of photocopying.
  • Saves money by increasing staff productivity.
  • Enhances customer service by timely and accurate retrieval of information.
groupware and workflow components and concepts
GroupWare and Workflow Components and Concepts
  • Describe a rapidly evolving collection of software tools that have been developed to enable more efficient human collaboration.
  • Groupware aids in the:
    • Creation
    • Sharing
    • And tracking of unstructured information within and between organizations in support of collaborative activity
the major vendors are
The Major Vendors are:
  • Lotus Notes/Domino,
  • Microsoft Exchange,
  • Novell Groupwise, and
  • Netscape SuiteSpot/Collabra
groupware can be said to encompass at least six core technologies
Groupware can be said to encompass at least six core technologies:
  • Multimedia electronic document management systems (EDMS)
  • Electronic conferencing systems
  • Electronic scheduling systems
  • Electronic mail systems
  • Telephony
  • Workflow systems
pitfalls in implementing a groupware system
Pitfalls in implementing a groupware system
  • As the system become functionally broader, they become more difficult to implement in an ordered, logical fashion
  • Expectations of the system
  • Training
  • On-screen graphical flowchart of the module
  • The basic instrument of storage in a groupware system is the document.
  • A document is the abstract “box” that holds all of the unstructured data you will use in the groupware system.
  • A document is the equivalent of the table in SQL databases, except that it holds unstructured (or “semi-structured”) data instead of highly structured relational data.
document databases
Document Databases.
  • Research notes
  • Blueprints
  • Financial statements
  • Vacation photos
  • Videos
  • Voicemails
  • Bulletin boards
  • Faxes
  • E-mails.
electronic conferencing
Electronic Conferencing
  • AsynchronousVersus Real-time
    • Text-based
    • Teleconferencing
    • Electronic whiteboards
    • Data conferencing
internet relay chat irc and usenet
Internet Relay Chat (IRC) and ‘Usenet’

The tools at the disposal of the viewer/participant will usually include:

  • A mechanism to create a new topic or a new thread
  • A mechanism for responding to an existing thread
  • A user/topic/date search utility.
real time conferences
Real-Time Conferences
  • Allow team members to collaborate on a project using near-instantaneously refreshed document replicas, electronic whiteboards, and audio/video communication tools such as teleconferencing systems
electronic scheduling
Electronic Scheduling
  • Electronic scheduling is a means of sharing information about meetings, deadlines, and “To Do” lists between personnel and project members.
  • A project member wanting to schedule a meeting would simply:
    • View the calendars of the desired participants
    • Choose the best time, date, and location for the meeting
    • Write the meeting information directly to the calendars of meeting participants
    • Send reminder notifications via e-mail.
e mail features
E-Mail Features
  • Address Books
  • Automation
  • Document Attachments
  • Group Broadcasting
  • Carbon Copies
  • Security
  • Notification
ad hoc and process oriented workflows
Ad Hoc and Process-Oriented Workflows
  • Ad hoc (or unstructured) workflows are those that give workers maximum freedom in completing their work.
  • Process-oriented workflows (or structured workflows), on the other hand, are used to automate processes that are long-lived, repetitive, and well defined
benefits for future
Benefits for Future
  • Unified messaging systems
    • Computer-telephony integration (CTI)
    • Interactive voice response (IVR.)
  • This is a relatively new area of technology convergence, so we will probably see many new and innovative applications within the next few years as new CTI/IVR applications make their way onto the groupware playing field.
introduction to the distributing computing concepts
Introduction to the Distributing Computing Concepts
  • The trend toward integrated decision support for the extended enterprise .
  • Use databases on meaning rather than just structure.
  • A focus on asset management, cellular design, self-managing applications, and collaborative commerce, to take us beyond ERP systems.
hypertext transfer protocol http
Hypertext Transfer Protocol (HTTP)
  • Hypertext Transfer Protocol or HTTP is a set of rules for exchanging files on the WWW.
  • This represents the application protocol for other protocols (principally TCP/IP) used for the exchange of information on the Internet
advanced hypertext markup specifications
Advanced Hypertext Markup Specifications
  • The language has three important functions, to provide direction as to:
  • What markup codes are allowed
  • What markup codes are required
  • How the codes will be recognized as not being part of the basic text
e commerce and edi
E-Commerce and EDI
  • The term E-Commerce (Electronic Commerce) brings different things to mind depending upon your prospective or the context in which it is used.
  • EDI (Electronic Data Interchange) is a subset of E-Commerce. EDI forms the basis for information to flow between two organizations without paper (or less of it) using a predefined set of parameters
e commerce and edi functions
E-Commerce and EDI Functions
  • Virtual Stores and the Online Gold Rush
  • CustomerRelationship Management
  • Self Service Accounting and Human Resource Applications
    • Customers could check their accounts receivable status.
    • Vendors could check their account payable status.
    • Outside sales people could enter and monitor customer orders.
    • Employees could review their employee benefit accounts – and in some cases make changes in their preferences or elections.
    • Employees could schedule vacation or other time away from the work-site.
online banking and tax payment systems
Online Banking and Tax Payment Systems
  • Some of the types of transactions that might be included are:
    • Transfer of funds between deposit accounts.
    • Transfer of funds between deposit and loan account (and vice versa).
    • Initiate electronic payment to vendors.
    • Query their accounts for activity and to aid in reconciliation.
    • Send messages to customer service representatives and receive replies.
creating a technology plan1
Creating a Technology Plan
  • Get top management committed to the project
  • Do research, make a plan, and create a budget and timeline
  • Need assessment
  • Contact vendors and gather your resources
  • Set up the prototype and choose vendor product
  • Establish policies and best practices
  • Educate the employees on what is coming
  • Roll out the hardware and software
  • Install accounting applications
  • Establish maintenance system, audit test
  • Evaluate and continuous improvement
projected goals and objectives
Projected Goals and Objectives
  • What problem will the new accounting system solve – Where is the pain?
  • Top management needs to understand and endorse the project? How will you achieve that?
  • How technically adept are the participants?
  • Project Manager – who is that person?
benefits vs coasts
Benefits vs. Coasts
  • Is top management aware of the hard and soft benefits and costs of the project?
  • What method will you use to determine the ROI of your project?
  • Will the pilot project be able to demonstrate ROI clearly?
budget for each implementation phase
Budget for Each Implementation Phase
  • Break project into phases
    • 60 days to 6 months
  • Construct a budget for each phase of the project
database and legacy system integration
Database and Legacy System Integration
  • Identify all of your company’s legacy systems and databases.
  • Have legacy security issues been addressed?
  • Are the candidate legacy system interfaces clearly defined?
performance issues
Performance Issues?
  • Have hardware and software platforms been defined?
  • Have you planned for different growth scenarios?
server locations hosting and maintenance
Server Locations, Hosting, and Maintenance:
  • Will you company have a dedicated server to host, or will host the content on a shared server?
  • Who will maintain the accounting application?
implementation time and milestones
Implementation Time and Milestones.
  • Have reporting requirements been fully defined by management?
  • Are there meeting scheduled to review the findings with top management?
staffing resources to maintain and support the project
Staffing/Resources to Maintain and Support the Project
  • Is there a clear policy in place to resolve problems?
  • Are there clear maintenance procedures in place?
  • Are there clear guidelines for implementing upgrades?
  • Have backup procedures been developed?
  • Does an emergency plan exist for system failure?
  • How will ongoing training be managed?
technology projections
Technology Projections
  • Computer systems will be on-line and virtually connected.
  • Distributing intelligence to handle screen layouts, data entry validation and other processing steps
  • Computers sites will harbor intelligent agents.
    • An intelligent agent is a software that waits in the background and performs an action if a specific event occurs.
  • Monitoring systems will focus on exception reporting and will place emphasis on fund transfer systems. Often called “audit by exception” as opposed to auditing actual reporting.
  • Viruses and Hackers will continue to be a growing concern.
future benefits of relational accounting systems
Future Benefits of Relational Accounting Systems
  • Parallel Processing is an architecture within a single computer that performs more than one operation at the same time.
  • The advent of parallel processing leads to dramatic performance and improvements in accounting systems.
distributing processing
Distributing Processing
  • Is the distribution of multiple computers throughout an organization.
  • This structure lets a single transaction span multiple databases by ensuring that the process completes in either all databases or none.
replication functionality
Replication Functionality
  • The ability to keep distributed databases synchronized by routinely copying the entire database or subset of the database to other server in the network.
  • Replication Functionality can be used to publish reports and other accounting data to subscribing servers for dissemination to users via e-mail or the Internet.
object oriented dbms
Object-Oriented DBMS
  • Provides more flexibility than systems designed for relational databases.
  • Object-oriented databases allow for many to many relationships.
  • The ultimate goal of object accounting systems is that it should not matter which source language they were programmed in or in which computer in the network they are running on.
other trends
Other Trends
  • Graphical Accounting
    • Refers to the use of a Graphical User Interface (GUI) to present the accounting systems functions and data users. Today practically all major accounting system vendor has released their accounting software with the same standard GUI interfaces.
other trends1
Other Trends

Spread Sheet Accounting

  • The integration of spreadsheets software with your accounting system.
    • Most client/server accounting packages include direct transfer of data to and from spreadsheets without the need for messy data file export and imports.
other trends2
Other Trends
  • Adaptable Accounting refers to accounting software that can be easily adapted or customized to fit most business processes. Users often see the need for accounting software to adapt to:
    • The different computing platforms used throughout the organization
    • The specific terminology and data capture needs of local business units
    • A variety of business rules in place by governmental bodies and regulatory entities
    • Differences in the implementation of specific business processes
    • The demand for add-on functionality not provided by the software vendor
other trends3
Other Trends
  • Adaptable Accounting refers to accounting software that can be easily adapted or customized to fit most business processes. Users often see the need for accounting software to adapt to:
    • The different computing platforms used throughout the organization
    • The specific terminology and data capture needs of local business units
    • A variety of business rules in place by governmental bodies and regulatory entities
    • Differences in the implementation of specific business processes
    • The demand for add-on functionality not provided by the software vendor
internet accounting client browser architecture
Internet Accounting (Client/Browser Architecture)
  • Allows the users access to accounting related information from any Internet connection via platform-independent desktop Web browser.
  • For example, initiate a transaction, participate in a transaction workflow, run a query, or request a report without having any accounting software on their own PC.

workflow accounting trends
Workflow Accounting Trends

The automatic routing of accounting related data to the users responsible for working on them.

  • System setup workflow
  • Message-based workflow
  • Form-based workflow
  • Transaction-based workflow
  • Web workflow
  • Even-driven workflow
component accounting
Component Accounting
  • Refers to accounting software that works together and cooperate with each other.
    • Voice
    • Video
    • Images
olap accounting
OLAP Accounting
  • OLAP is fast becoming another technology and functional differentiator between accounting systems.
  • The OLAP functionality may be built in to the accounting suite or delivered via integration with third-party products.


Questions and Answers

Liv Watson – Senior Director of Information Technology