How are Accounting System Developed in Practice today.

Today, accounting systems are developed using the ABC methodology. Businesses meet some of their specific needs by buying an accounting system, a starting point system that is specifically tailored for them which gives them exactly what they need.

There are various things involved in developing an accounting system. The list is so long that it becomes confusing; as a result, IT specialties have developed three keys that help them to stay organized which is essential in creating a successful accounting system. These are people, processes, and technology which are used together with project management.  These three keys were created based on the main functions of an accounting system, store data, analyze and use data, and safeguard the accounting data.

The people are basically  about the teams involved in developing the accounting systems and their various roles; processes involves the steps that will be taken in developing the accounting system and IT specialists use the system development life cycle (SDLC) as well as the system development methodology (SDM) to define and organize these steps; technology is about the technology that will be used in the accounting system such as the accounting software,  the database and DBSM and network and protocols.

The system development life cycle (SDLC) is an important component in creating a successful accounting system as it provides the various people involved in the process such as programmers, IT specialists and system analysts with a common language that will be used to communicate and minimize misunderstandings.  SDLC is a series of phases to developing a system including plan, analyze, design, build or buy, install and deploy. The plan is why the system is being created and analyze looks at the user requirements including the current system. Design involves developing the new system models based on the findings of the analysis. Install is about installing the new system including hardware and software as well as training users and converting data so that it can be usable in the new system. Finally, deploying operating the new system as users utilize the system as well as maintaining and supporting the system. 

Another important component in the development of a successful accounting system is a system development methodology (SDM) which determines regulates the order and movement of how and when the different phases of the SDLC are executed. There are various systems development methodologies such as the waterfall methodology, the prototyping methodology and the ABC methodology. All of these methodologies are used in designing and building cars such as the handmade Italian sports cars with the ABC methodology being the most widely used.

In theory, the ABC methodology appears to be a good way of developing accounting systems, but there have been some doubts. However, it seems to be a good fit for creating accounting systems because it is very popular among enterprises. They are using in-house programmers to customize their specific baseline system that addresses their needs, and that is the equation of an accounting system. Baseline and customization are two important stages involved in the ABC methodology. The baseline accounting system usually comprises of workflow and business processes enterprises used on a daily basis that is why it contains these phases of the SDLC, plan, analyze, design and build or buy.  The customization of the baseline accounting system, on the other hand, involves taking steps that will ensure that the needs and requirements of a specific enterprise are met, and baseline modules for its vendors, customers, staff, reports, banking, and financials are developed. In the customized system stage, all of the phases of the SDLC must be performed. All of this is illustrated in the example involving Espressocoffee Company.

There are various advantages to using the baseline model in creating accounting systems. The baseline model is time efficient as the teams involved in the processes will not have to “reinvent the wheel,” they will have a base model that will enable them to tailor the accounting system to the specific needs and requirements of the enterprise. The baseline model improves the efficiency of the accounting system which reduces the probability of design errors occurring. 

Baseline plus customization are widely used in enterprises because they have realized that no other approach is more suited to the distinct needs of accounting system design. Although most enterprises have accounting systems that are similar when it comes to business processes and activities, there are specific features explicitly tailored or customized for each enterprise.  Enterprises have shifted away from methods that used to be used in the creation of accounting systems to the ABC methodology because it is portable, flexible and cost-effective.