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Case study: sample company

Introduction

More informationNowadays enterprises meet the challenge of computerization of their business environment in a more specified manner. Entrepreneurs value their employees’ time and accuracy of data more and more and this has created an increasing demand for software that would meet their particular needs and consequently make their work more cost-effective. Special attention is paid to accounting software: every undertaking has particular needs namely in this area.

Problems that arise at the process of introduction of new accounting software can be overcome only with the cooperation between the selling and purchasing firm during the development of the program.

The topic and the aim of this information is the description of the process of introducing new accounting software, seen through eyes of both the selling and the purchasing company and to demonstrate the problems that arise at the introduction of new accounting software.

The process is structured as follows:

Eeva multi-language software

Database Management System Organization

Before going deeper to face with problems company has and how “Eeva” software can solve them the following chapters describe the procedures in the field of software development and define some accounting terms to understand better the operations of accounting programs.

Every software company chooses the way of composing programs in particular type of Database Management Systems (DBMS). There are three most common types of DBMS: hierarchical, network and relational. Fields and records of the hierarchical database are structured in nodes. Nodes are similar to branches of a tree. Each entry has one parent node, which may have several child nodes. To find specific data one has to start from the stem and select the parent nodes and child nodes until the desired information is reached.

The network database is quite similar to the hierarchical database – one has to start the search for data again from the stem. The difference between the two databases lies in parent and child nodes – child nodes can have several parent nodes in the network database.

The relational database has different tables, each of which consists of rows and columns for data elements.

“Eeva” software is designed on the basis of a DBMS relational database, described more closely in the following sections.

Relational Database

A relational database is most frequently used for the development of accounting software as, compared to other DBMS databases, it is easier to insert and view information in a relational database.

Table 1 shows the connections and fields of a classical relational database. The table of “Customer” consists of buyers’ information (name, address, phone number, etc.), the table of “Invoices” has the consolidated data (number, date, total etc.) and the table of “Detail” has the rows of invoices (item name, quantity etc.). The table of “Office” is similar to the table of “Customers” and “Salesman” but it contains only the data of company’s sales departments. Information about items is inserted into the table of “Parts”.

The lines show connections between the tables. The table of “Invoices” is connected with the table of “Customer” (CNO), the table of “Details” (ONO), and the table of “Salesman” (SALESMAN) because invoices must contain the customer and sales office, and the item’s name. The table of “Office” (ONO) is connected with the table of “Salesman” and with the table of ”Customer” because salesmen and customers may belong to certain sales offices. The table of “Parts” gives detailed information on an item, it has a connection with the table of “Detail” to fill in the rows of the item’s name. These connections between tables increase the amount of hard disk space required for data maintenance and changes made in one table affect other tables automatically.

Table 1

The Structure of Classical Relational Database

CUSTOMER INVOICES DETAIL
CNO INO INO
COMPANY CNO LINE
CONTACT IDATE QTY
ADDRESS ITOTAL PNO
CITY SALESMAN PRICE
STATE   LTOTAL
ZIP    
PHONE SALESMAN PARTS
ONO SALESMAN PNO
YTDPURCH ONO DESCRIPT
LAT NAME ONHAND
LONG YTDSALES ONORDER
  ADDRESS PRICE
OFFICES CITY COST
ONO STATE YTDUNITS
YTDSALES ZIP YTDSALES
ZMIN PHONE  
ZMAX NOTES  
ADDRESS    
CITY    
STATE    
ZIP    
PHONE    

Types of Databases

Each DBMS four kinds of databases: individual, company, distributed, and proprietary.

  1. The individual database or microcomputer database consists of the set of files, which is used and controlled just by one user and in case of local area networks (LANs), metropolitan area networks (MANs) or wide area networks (WANs) other users cannot access to this database.
  1. The company, or shared, database works in the networks of LANs and MANs to share the data between users. The information may be stored in the mainframe and managed by computer professionals, known as database administrators.
  2. The distributed database allows storing the data in several locations. Local and regional offices may have different database servers on a client/server network, which is linked between each other. Top-level managers could have access to servers’ information only.
  3. The proprietary database is a huge database, which may provide information services to the public or selected individuals for a fee.

“Eeva” software is constructed to work in the individual, company, and distributed databases.

Information Systems

Basic functions of organizations’ activities, which depending on the services or products are accounting, production, marketing, operations, human resources, and research.

  1. Accounting is the information systems, which tracks all the company’s financial activities and compiles the financial statements for public and management. The main accounting reports of sole proprietorship are following:
  1. Income statement- summarized revenues and expenses usually monthly, quarterly or yearly basis.
  2. Statement of owner’s equity- summarized changes of owner’s equity during a month, a quarter or a year.
  3. Balance sheet- the value of assets, liabilities, and owners’ equity at the end of a month, a quarter or a year.
  4. Statement of cash flows- summarized cash receipts and cash payments at the end of a month, a quarter or a year.
  1. Production is the process of conversion of material into finished products by using machinery and labor.
  2. The ones of the most essential positions in manufacturing companies are operations managers. There are many tasks to fulfill in this field. First, operations managers have to plan for the future, control operations, and schedule. Planning is the part of the forecast to estimate the flow of products and workers input into transformation process in fixed period. Secondly, operations managers have to control material flows from supplier to the points of destination, especially warehousing, shipping, and distribution of products. Scheduling involves assigning specific tasks, jobs, and work for equipment, facilities, and human resources in accordance with a timed planning. Scheduling is one of the most important activities in operations management, because its minimizes inefficiencies, which can rise from late shipment and weak customer service. It is very essential to focus on reducing time and cost via Just-in-Time delivering.
  3. Marketing is using pricing, promotion, and distribution of ideas, goods, and services in the process of business activities to achieve the company’s goal.
  4. Human resources is the department, which hires people and handles with the situations of sick leave, retirement benefits, compensation and training.
  5. Research and development, which does product research and provides new ideas and technologies to marketing.

“Eeva” software satisfies almost all abovementioned functions except research and development. “Eeva” software stores exact information about inventory, production, sales, payroll, assets on daily basis and enables to summarize data at the end of each month or year to make decisions about bonuses paid to employees and providing discounts to favorite customers.

As figure 1 shows that an accounting area is one of the most important transaction processing systems for any company, which covers six activities:

  1. The sales order processing activity, which determines how many products to ship after the sales orders from customers.
  2. The accounts receivable activity, which determines how much money is received or owed by customers.
  3. Inventory helps to keep an account for each type of finished goods in warehouse and how many items to purchase to keep required inventory.
  4. Accounts payable indicates how much money company owes to its suppliers for materials and services received.
  5. The payroll activity calculates paychecks according to hours, days or months worked and deducts taxes levied by government.
  6. The general ledger summarizes all transactions, which is the source for financial statements.

 

Figure 1

Transaction Processing System for Accounting

Eeva multi-language software

Managerial and Financial Accounting

There are two types of accountings, financial and managerial, used to provide information to different interest groups.

  1. Financial Accounting. Financial accounting information is revealed to outside the company to external users, mainly to shareholders, creditors, government agencies, management, and the general public. Financial accounting information is revealed for monitoring the activities occurred in the past and evaluating the position of the company’s welfare. Financial statements are reported periodically and must be made in accordance with standard of generally accepted accounting principle (GAAP). GAAP is used for comparing financial statements of different companies with the same standards. For example, investors can compare the financial indicators of different companies by the GAAP standards to decide the investment opportunities between countries, industries or companies.
  2. Managerial Accounting. Managerial accounting information is revealed for monitoring historical activities and planning future operations periodically or as needed. This information is not shared with public and therefore the way of composing reports is not determined by accounting standards. Managers according to management needs of different departments, divisions, projects, products, territories or levels use these reports in any useful format.

Eeva multi-language software

“Eeva” Software

Eetasoft produces the production, sales and accounting software package “Eeva”, which meets the requirements of most small and middle-sized businesses. “Eeva” software is an accounting program that is designed to automate a company’s bookkeeping, it enables to store records by accounts, clients, objects or documents.

Eetasoft started its business in 1991 and now it is a successful company providing full service to thousands of customers. The software package “Eeva” enables to find solutions for almost any accounting problem customers might have. Many customers approach Eetasoft to adjust the standard package “Eeva” to their specific requirements. Every change in the accountancy law is also taken into account in the previous and present versions of “Eeva”. The major changes concern the calculation of remuneration.

Furthermore, “Eeva” software enables to insert foreign currency by adjusting it to main currencies if needed. The currencies are inserted to the table of exchange rates, which is used in the calculation of foreign exchange rates.

The Connection of Modules

“Eeva” software consists of nine modules and the connection between these modules is shown in figure 2. Each modules can operate stand-alone, or in conjunction with other modules.

Figure 2

The Connection between Modules

General ledger aggregates all modules into one table. Documents are connected with bank connection because of the bill payments to the banks. “Eeva” software issues the file by the export command, which is later sent to the bank through network programs provided by banks.

Storage is linked to manufacturing and retail outlet modules. Manufacturing has three inventories – materials, work in process and finished goods inventory. Materials inventory is connected to manufacturing process having the costs of direct materials, direct labor and factory overhead. Some products are completed and some are not during the process of manufacturing. Uncompleted products are left to work in the process of inventory and finished goods move to the finished goods inventory where they are ready for transport to the retail outlet.

Payroll is the most changing module in the “Eeva” software. Almost every year internal revenue service changes the forms and estimates, which must be programmed and changed in the programs of customers. Payroll has a subsystem of personnel, where is indicated the personal information and constant salary of every employee. The last module of “Eeva” software includes fixed assets, which calculates the value of fixed assets every year according to depreciation rates, determined by the accounting law.

The Usefulness of “Eeva” Software in Planning

Planning is one of the most important factors in the success of company’s activities. There are three types of planning: strategic, intermediate and operational. Strategic planning determines long-term goals with available resources, which may last from one to ten years. Strategic planning is dictated by top-level management to estimate future profit and growth potential and tools to achieve the competitive advantage over other companies in the same industry. Middle-level managers set the intermediate plans, which may last from six months to two years. They are concerned with what has been called subsystem decisions. They are responsible for departments where they belong and the people and activities within it. Lower-level managers run operational plans to accomplish specific tasks with available resources within one-year horizon.

Every level of management can adjust “Eeva” software according to their tasks. Top-level managers can see summarized information by viewing financial statements or summarized sales by customers, products or classifiers to make long-run plans. Middle-level managers can see both summarized and detailed data about changes of sales figures or other estimates of their departments. Lower-level managers can insert and view specific entries to make short-term decisions. “Eeva” software enables to choose the suitable period according to level of management obtain to find suitable information.

Eeva multi-language software

Main Activities in typical retail company

As sample mentioned company sells Chrysler and Jeep cars and spare parts and provides service. If a customer wants to buy a car, he or she has to consult with salesmen who describe the features of the cars in the shop or of the cars, that can be ordered. After a mutual agreement the customer has to pay a prepayment of half of the car’s price in case of a purchase order. The purchasing staff order the car or car parts from different Chrysler Corporation subsidiaries, the ordered car or car parts are usually delivered in about half a year. The employee of the purchase order department takes orders of service. After the orders are received, the employees of the sales department inform the service department about new orders and details to be replaced or work that has to be done to the car. The employees of the service department inform the employees of the sales order department about due dates and available spare parts. The employees of inventory control have to inform the employee of the purchase order department about required the spare parts, which have to be ordered. When the customer receives a car from service, the next step is to control and accept the changes made to the car and to receive the invoice from the cashier. Managers can see all these activities at the same time and make decisions for past periods.

The Development of “Eeva” Software between Departments

The “Eeva” is standard software for all people who have to insert and see data of company’s activities. Usually the customers of Eetasoft ask help to adjust the “Eeva” software according to their personal needs. It depends on the policy of the company how exactly they need to run the program and what operations should be done in the fields, records and documents of the program. The following sections describe the specific requirements of each department in company that had to be adjusted in “Eeva” package.

Sales Order Department

Sales order department is responsible for receiving the service orders from customers, informing service department and getting feedback for determining due dates and costs of fixing the cars. The sales representatives have to view and fill the following tables:

  1. Table of customers
  2. Table of classifiers
  3. Table of orders
  4. Table of items

First sales representatives have to insert data about customers to the table of customers. The table of customers contains information about natural and legal persons, with whom the firm does business.

Most of the company customers are regular buyers and it is recommended to insert customers directly to the table of customers before filling in any order or invoice. Some companies may have both casual and regular buyers. In this case sales representatives do not want to insert the customers who were casual buyers to the table of customers because of irrelevant and aggregative data, which may become confusing and time-consuming for further business activities. Therefore information of customers can be inserted into the field of text in the detailed table of invoices, which is printed to the invoice and is stored in the specific documents not in the table of customers.

As table 3 shows, the table of customers consists of customers’ names, addresses, telephones, codes, banks, terms of payment, discounts and other informative data.

Table 3

Table of Customers

Name

Type

Area

Street

Bank

Telephone

Discounts

Terms of pay

Code

First Brand

Buyer

N.Y.

Toome 63

767

25036312

5%

10 days

Maks

General Motors

Supplier

Chicago

Tamme 2

767

27412685

10%

5 days

Toolv

Chr Parts AS

Buyer

N.Y.

19th avenue

767

6503322

2%

15 days

Uspart

The table of customers does not consist of data about cars and cars’ owners because some customer can have several cars but there must be only one record per each buyer. There can be two or more names per same company but the field type must be different in the table of customers. For example, one customer may be buyer and supplier at the same time. As table 4 shows that the data about cars and their owners of cars are inserted into the table of classifiers from where employees can select the cars corresponding to customers. There are six types of classifiers used in “Eeva” software, these differentiate departments, branches, materially responsible persons, contracts, projects and other details, for which the user want to keep separate records. These types are called objects, subjects, sources, budget articles, functions and projects. company uses the type project for specifying cars and their owners. Cars are distinguished by registration numbers because of identical cars owned by the same owner.

In addition to information of registration number, classifier type and car owner, the table of classifiers consists of VIN-codes, mark and mileage data.

Table 4

Table of Classifiers

Type

Number

VIN-code

Mark

Owner

Mileage

Project

49 ZAU

1C3HEB6F1SH548352

Chrysler Vision

Toome 63

25500

Project

36 FDS

1FACP52UONA131930

Jeep Wrangler

Tamme 2

40200

Project

89 GLK

1P4GP44RXTB333515

Grand Voyager

Loode 19

10000

After filling the fields of classifiers the sales representative fills in the detailed table of orders. This procedure is most important for the sales representatives because the table is used all the time and therefore it must be accomplished quickly and correctly.

The requirements to change standard “Eeva” software in the detailed table of orders were specified by sales representative:

  1. Information about customers and their cars should be included in a table from where it is possible to view the last visiting dates, car mark, VIN-code, mileage and year of construction.
  2. How to differentiate the orders according to the terms of payment, and in particular, in the field of guarantee and current repair?
  3. How to make it easier to insert the names, cars and services of the customers to the detailed table of orders?
  4. How to get information from the service department for informing customers about prices, due dates and available materials for fixing the cars?

The damages of cars, which are insured and have undergone an accident, are compensated by insurance companies who pay the cost of spare parts and service. However, there is certain amount of the expenses is paid by the customer in the form of retention. The customer does not have to pay for guarantee repairs – these are compensated by company. To make easier to differentiate between the different the terms of payment the program should automatically calculate the amounts according to the codes. The next solution is provided to company:

As table 5 shows, the terms of payment are inserted in the field on the top of the detailed table of orders field: “J” for current repairs and “G” for guarantee repairs. In case of compensating damages by an insurance company the employee has to insert the insurance certificate number and leave the terms of payment field empty.

Table 5

Detailed Table of Orders

Number 28   110000
Date 05/01/00 Client First Brand
From Warehouse Car GR. CHEROKEE
Insurance act no    
Guar-run G Total $4 458.15
 

Item

Subject

Name

Unit

Quantity

Price

Sum

G0073574   Absorber

Pc

5

$91.65

$458.20
G0073619   Absorber

Pc

2

$490.30

$980.60
HX35RK5   Molding

Pc

5

$88.85

$444.30
HY39PS6   Cap

Pc

4

$388.75

$1 555.00
T0017 I. Vutt Locksmith

Hr

2

$170

$340.00
VAT   $680.05

As table 4 shows, all the information about customer is inserted into one table. First the data about customer are filled in the head of the detailed table of orders and then the term of payments, which may have symbol of “J”, current repair, or “G”, guarantee repair, are indicated.  

Table 6

Detailed Table of Orders

Number 28   110000
Date 01.05.00 Client First Brand
From Warehouse Car GR. CHEROKEE
Insurance act no 45823  
Guar-run   Total $3 278.16
 

Item

Subject

Name

Unit

Quantity

Price

Sum

G0073574   Absorber

Pc

5

$91.65

$458.20
G0073619   Absorber

Pc

2

$490.30

$980.60
HX35RK5   Molding

Pc

5

$88.44

$444.30
HY39PS6   Cap

Pc

4

$388.75

$1 555.00
OV001   Retention      

$ -1000

T0017 I. Vutt Locksmith

Hr

2

$170

$ 340.00
VAT   $ 500.06

Table 6 shows that the insurance certificate number has to be inserted to the head of the detailed table of orders when certain documents are received for insuring the payment by insurance company. Retention has to be deducted from insurance compensation.

Purchase Order Department

Company purchases cars and their repair parts from Chrysler Corporation. Orders are made after in-stock balance has reached to a minimum level or when the cars are ordered and the prepayment made by customers. Orders are written in English and on a different order form than “Eeva” software provides in its standard version. Another task for the purchase staff is to make up an initial estimate of costs and deliver it to the companies or individuals that have made a request. In case of insurance compensation, insurance companies want to see the estimated cost of spare parts and service to give their final acceptance for compensating damages

The purchasing staff views and fills in the following tables:

  1. Table of customers
  2. Table of classifiers
  3. Table of orders
  4. Table of offerings
  5. Table of items

The Purchasing staff has an additional task to fill in the table of offerings and send the corresponding documents to the customers.

The employee of purchasing staff specified the requirements of his department:

  1. How to fill in the corresponding forms of estimates, which will be sent to company customers?
  2. How to fill in the corresponding forms of orders, which will be sent to Chrysler Corporation by changing automatically the inserted order number, customer name, customer code, customer order number, date, item number, part number and quantity?
  3. How to differentiate a detailed table of orders from a sales order table and leave out irrelevant and interrupting information?
  4. How to control in-stock balance minimum quantity?

As mentioned above, the estimates are mainly sent to insurance companies to show the calculated cost of details and service needed to insured and damaged cars.

The form shows that estimates consist of the basic information and are quite identical compared to an invoice, only the conditions and headings are different.

There are two types of order-forms, one is sent to Chrysler Corporation and another to local customers. Local order-forms consist of item codes, numbers, and filled and unfilled amounts. Order-forms, which are dispatched to Chrysler Corporation, correspond to the international standards and are written in English.

Purchase orders are accomplished in the detailed table of purchase orders, which has the same fields as the table of sales orders. “Eeva” software enables to insert options to show the fields differently in the same table between users, who log in with their user names and passwords. According to this method the employees of purchasing staff see fewer fields than the employees of sales representatives. As table 7 shows, the purchase order department needs only the number of order, the name of the customer to whom this order is directed and the date. Item names, units and quantities are described in the rows of items and prices are left out because prices are determined by Chrysler Corporation.

Table 7

Detailed Table of Purchase Orders

Number 28
To Chrysler Corporation
Date 05/01/00

Item

Name

Unit

Quantity

G0073574 Absorber

Pc

5

G0073619 Absorber

Pc

2

HX35RK5 Molding

Pc

5

HY39PS6 Cap

Pc

4

Purchasing staff keeps an eye on in-stock balance and has to order items, which have reached to minimum quantity. As table 8 shows that “Eeva” software enables to insert the minimum quantity of every item to the table of items and look the report of purchase recommendation. The purchase recommendation form consists of item names, codes and quantities, which have reached to minimum level.

Table 8

Table of Items

Item

Name

Unit

Cost

Sales price

Min. quantity

G0073574 Absorber Pc

$ 300.00

$ 458.20

2

G0073619 Absorber Pc

$ 500.00

$ 980.60

5

HX35RK5 Molding Pc

$ 200.00

$ 444.30

4

HY39PS6 Cap Pc

$ 1 000.00

$ 1 555.00

4

Service Department

Service department receives its orders from sales order department, which is indicated in the detailed table of orders. The sales representatives insert the data gathered from customers and service department can see this information at the same time to be prepaid.

Service workers described the following problems and tasks to be designed to the “Eeva” software to accomplish the work of service department more efficiently:

  1. How to change and add sales order details in the detailed table of orders?
  2. How to inform automatically the sales order department about completed work?

The service workers can change the details added to the detailed table of orders by sales department until they have marked the permission check-box, which is shown in the table 9.

The permission check-box is the informative symbol in the detailed table of orders to indicate the completed work. After the permission check-box is filled in the employees of sales department can contact with customer to inform about the state of the repair of the car. The permission check-box is visible only to service workers and sales staffs, other departments do not see it because it contains unnecessary information for them.

Table 9

Detailed Table of Orders

Number 28   110000
Date 05/01/00 Client First Brand
From Warehouse Car GR. CHEROKEE
Insurance act no 45823  
Guar-run   Total $ 3 278.16
Permission  
 

Item

Subject

Name

Unit

Quantity

Price

Sum

G0073574   Absorber

Pc

5

$ 91.65

$ 458.20
G0073619   Absorber

Pc

2

$ 490.30

$ 980.60
HX35RK5   Molding

Pc

5

$ 88.85

$ 444.30
HY39PS6   Cap

Pc

4

$ 388.75

$ 1 555.00
OV001   Retention      

$ -1000

T0017 I. Vutt Locksmith

Hr

2

$ 170

$ 340.00
VAT   $ 500.06

As mentioned above that other departments, besides service workers and sales representatives, do not see the permission check-box and now it is questionable how sales department can understand whether the work is completed or not. It is very annoying to insert to detailed table of orders to control the permission check-box. The “Eeva” enables to view the orders comprehensively from the field of permission as shown in the table 10. After the permission check-box is filled in the detailed table of orders the character “T” appears to the table of orders. The logical symbols “T” or true and “F” or false mean that the work is either completed or not. Also the sales representatives can see the updated information of the date, customer, total cost and completed or uncompleted work.  

Table 10

Table of Orders

Number

Date

Client

Total

Permission

Car

29

01/10/00 Benefit Ltd.

$ 500.00

T

Grand Voyager

30

01/12/00 M&V Ltd.

$ 48 500.00

F

Chr.Stratus

31

01/15/00 Consum Ltd.

$ 1 200.00

T

Chr. Voyager

32

01/15/00 Remedia Ltd.

$ 8 000.00

T

Jeep Cherokee

Cash Department

Cash department is responsible for compiling invoices or selling in cash.

Cashier was interested in the following:

  1. How to create the invoice from the table of orders?
  2. How to view simplified information about customers, and items on the invoices and ignoring unnecessary data (fields of accounts determined by accountants), which could come from the detailed table of orders or are in the standard table of invoices?
  3. How to view the information of prepayments?
  4. How to view the warehouse position and minimum level of quantity in cash department and main warehouse?

“Eeva” software enables transferring data from one table to another. After the service workers have completed the work and sales representatives have informed customers to call for their cars, the cashier compiles the invoice. For compiling the invoice cashier has to select the customer from the table of orders and create the invoice by switching the button “F7”, which opens the table of options. The table of options enables to create any document from present one. After the procedure of transferring data from one table to another is finished, cashier may look at the table of invoices to be sure that new document has emerged. When the customer wants to buy extra goods from cash department or does not accept the quality of service then “Eeva” software permits to make changes to the data transferred from the detailed table of orders as shown in table 11.

Table 11

Detailed Table of Invoices

Number 28 Client Toolvark O
Date 05/01/00 Car GR. CHEROKEE
From Warehouse Total $ 3 278.16
Guar-run G    
 

Item

Subject

Name

Unit

Quantity

Price

Sum

G0073574   Absorber

Pc

5

$ 91.65

$ 458.20
G0073619   Absorber

Pc

2

$ 490.30

$ 980.60
HX35RK5   Molding

Pc

5

$ 88.85

$ 444.30
HY39PS6   Cap

Pc

4

$ 388.75

$ 1 555.00
OV001   Retention      

$ -1000

T0017 J. Smith Locksmith

Hr

2

$ 170

$ 340.00
VAT   $ 500.06

As it was described in the section of purchase order department, “Eeva” software enables to switch off some fields, which is irrelevant by some departments because data may be irrelevant and confusing. Every issued invoice has to be recorded in the table of records for viewing and printing financial documents. In this case “Eeva” software enables to switch on the option of choosing accounts from invoices or switching off this option and choosing accounts determined in the table of documents’ records. The table of documents’ records describes how to create the records to the general ledger.

The table of documents’ records may determine prepayment accounts or accounts may be inserted to the detailed table of invoices. There are three ways of compiling the activities of prepayments:

  1. First, selecting a prepayment invoice from the detailed table of invoice and inserting the sum prepaid and the sum of VAT of prepayment symbolized with letters “LM” (prepayment VAT). After paying to the cashier or receiving the payment order the information is inserted to the table of bank receipts or to the table of cash earnings. Finally when the customer pays for the final invoice, the cashier has to compile the usual invoice where the prices of items and services, prepaid VAT (“LM”), elimination entry of VAT of prepayment (“LY”), and VAT (“KM”) are inserted.
  2. The second way of compiling a prepayment invoice consists of basically the same procedures as in point 1, only the prepayment invoice is left out. First, the data is inserted to the table of bank receipts or to the table of cash earnings and the final invoice is compiled.
  3. The last and easiest way of compiling prepayment invoice is to insert the data to the detailed table of orders. After all prepayments have paid, create an invoice from the table of orders and close it to transfer the activities to the general ledger.

When the customer, who has paid prepayment, receives the products, the final sum is automatically calculated and the remaining prepayment is left to the future periods.

There are three warehouses in company – the main warehouse, suppliers’ warehouse and cash department warehouse. Products are transported from the main warehouse to cash department with internal sales documents because there are no payments between warehouses and company’s total in-stock balance remains the same. Only the in-stock balance in the main warehouse and cash department warehouse is changed according to quantities. “Eeva” enables to keep different warehouses in the same company and automatically deduct sold and chargeable products from the initial warehouse position in every warehouse separately.

Suppliers’ Department

company sells its products to customers directly and indirectly through resellers. company transports its products to resellers by using its own suppliers. Like cash department, the suppliers receive the products from the main warehouse with internal sales documents. In this case the situation is somewhat different compared to the activities of cash department warehouse. Suppliers transport the products to resellers and resellers must remit or pay the company invoice according to the terms of payment. The chief accountant specified the problems of suppliers’ department:

  1. How to calculate the supplies position between main warehouse and suppliers’ warehouse?
  2. How to recognize the sales and the change of in-stock balance between different departments?
  3. How to deduct the quantities and amounts from one and the same internal sales document, which may have many invoices written to resellers?

The products are dispatched by trucks to the resellers and suppliers are filling the invoices at the points of destination and these invoices have to be inserted manually again to the “Eeva” software after suppliers have shown corresponding documents to their accountants. Suppliers may have one internal sales document, which corresponds to different invoices. When invoices have been manually typed into the “Eeva” software then the amounts, which were received by an internal sales document, are deducted. In this case “Eeva” software enables to insert objects and subjects to the fields of “objects” and “subjects”. Warehouses have to be inserted to the table of classifiers under the type of objects and employees under the type of subjects to determine warehouses and suppliers in the documents of internal sales and invoice.

Service Department Payroll

The service workers are paid on piece work and regular pay basis. Piece work sums, which are paid to service workers, are calculated directly from invoices.

The standard “Eeva” package does not calculate piece work payment automatically after the invoices are closed and therefore data should be inserted manually to the table of piece work. But the standard “Eeva” package enables to make changes, accomplished in company for the calculation of piece work in the table of payroll after compiling and closing an invoice. As table 10 shows, the invoice has the field of subject where the name of the employee who has completed work can be inserted. Before the order has changed to an invoice by switching the button “F7”, the owner of the car controls the service made to the car to accept it. Piece work sums inserted to the table of orders do not affect the table of payroll.

Table 12 shows that the service workers get certain per cent of the service sum and after compiling and closing invoice, the piece work sum goes directly to the payroll table and income taxes are deducted and social taxes added. Piece work figures are inserted to the table of items.

 Table 12

Piece Work Figures

Type

Name of service Price of service per hour Per cent Piece work sum per hour

1

Maintenance

$ 330.50

25%

$ 82.63

2

Engine diagnostics

$ 423.70

35%

$ 148.30

3

Engine repair

$ 330.50

30%

$ 99.15

4

The repair of electrical devices

$ 423.70

35%

$ 14830

5

Transmission repair

$ 330.50

30%

$ 99.15

6

Fore axle repair

$ 330.50

25%

$ 82.63

7

Fore axle regulation

$ 296.60

30%

$ 88.98

8

Axle regulation

$ 423.70

30%

$ 127.11

9

The repair of steering wheel mechanism

$ 330.50

25%

$ 82.63

10

The repair of cooling system

$ 330.50

25%

$ 82.63

11

The repair of brake system

$ 330.50

25%

$ 82.63

12

Tinsmith work

$ 254.25

35%

$ 88.99

  Tinsmith work 1

$ 254.25

35%

$ 88.99

  Tinsmith work 2

$ 254.25

35%

$ 88.99

13

Painter work

$ 262.70

35%

$ 91.95

  Painter work 1

$ 262.70

35%

$ 91.95

  Painter work 2

$ 262.70

35%

$ 91.95

14

Locksmith work

$ 330.50

25%

$ 82.63

23

Under the car wash

$ 42.40

25%

$ 10.60

24

Car wash

$ 84.75

25%

$ 21.19

As mentioned above, the table 13 shows the piece work and regular pay added to the payroll table. The payroll table consists of the employees’ and employers’ names, and payments received. The employers of company receive fixed salaries.

Table 13

Payroll Table

January 2000

Number

Name

Position

Receivable

8

Branson Service worker

$ 4 278.00

38

Jameson Accountant

$ 8 000.00

       

Payroll

Sum

Calculated

 
Salary

$ 1 000.00

$ 1 000.00

 
Piece work

$ 4 500.00

$ 4 500.00

 
Income tax  

$ 1 222.00

 
Social tax  

$ 1 815.00

 

As the example in table 13 shows, Mr. Branson receives $ 4 278.00 in January 2000, which consists of salary, piece work and deducted income tax. In case of disagreement between accountant and a service worker about incorrectly calculated piece work, “Eeva” software enables to show the reports about detailed piece work by invoices to correct the mistakes.

Eeva multi-language software

Additional Management Reports

Guarantee invoices may consist of products and services, which are totally compensated by company. To view the expenses occurred in these invoices the requirements of managers were followings:

  1. How to view the current and guarantee payments separately between workers?
  2. How to calculate the profit or loss from service?

As table 14 shows, data about workers, customers and service are gathered together to view the desired results. The table consists of the following fields:

  1. Name of worker.
  2. Date of invoice.
  3. Name of customer.
  4. Type of service.
  5. Total sum for the service.
  6. Current service- the piece work sum received from the sum of service multiplied by the per cent of the piece work determined in the table of items.
  7. Guarantee service- the piece work sum received from the percentage sum of service multiplied by the per cent of the piece work determined in the table of items.
  8. Social tax- current or guarantee piece work sum multiplied by social tax (33%).
  9. Profit from service- it depends on the fields of current or guarantee service because it determines the profit or loss received by company. When the field of guarantee service is filled, the company receives expenses, which are calculated by the following formula: guarantee service plus social tax, because the company pays the social tax. When the field of current service is filled, the company calculates the revenues: the sum of service minus current service minus social tax.

Table 14

The Calculation of Profit or Loss from Service

February Profit or Loss from Service

Worker

Date

Client

Service

Sum

Current

Guarantee

Social tax

Profit from

Service

Branson

02.02.00

Estravel Painter works1

262.70

 

91.95

30.34

-122.29

Branson

02.06.00

Sunorek Maintenance

330.50

82.63

 

27.27

220.60

Pugel

02.08.00

Fakto Maintenance

330.50

 

82.63

27.27

-109.90

              Total:

-11.59

Eeva multi-language software

The Significance of “Eeva” Software in typical retail company

The situation in the field of software development in company has totally changed as compared to the initial standard package. By now all business activities that occur between different departments and users are saved to the integrated program in order to make the compiling of financial statements and informative documents easier.

The inflow and outflow of inventory is calculated separately between warehouses and responsibilities for shortages are diluted and sales capacities are counted between departments.

The information between service workers and sales representatives moves faster without face to face meetings and customers receive appropriate feedback.

Service workers do not have to worry about mistakes occurred in the calculation of piece work payments from invoices as all information is transferred automatically to the table of payroll. Service workers may ask summaries from accountants to compare these results with their notes.

Eeva multi-language software

Conclusion

The problems often arise from lack of information on the level of employees and lower level managers before choosing the software because decisions are made on the level of top managers mostly.

After a careful examination of company activities in the implementation of “Eeva” software the following conclusions can be made.

First, the change of employees’ negative attitude to the new and modernized software can be achieved by fitting the software to the company’s environment. Careful training should follow, the employees’ ability to re-learn should not be underestimated.

Secondly, the flexibility of “Eeva” enables to find solutions even to the most complicated problems, as in the case of company, the calculation of piece work payment from invoices and transferring the data to the payroll table.

To conclude, it can be said that as the company becomes more experienced in using the new program, the usefulness of it for the company’s activities will be more and more eminent as the program saves time and provides correct information to all workers.

 

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