lab 5

Running Head: NEW FINANCIAL SYSTEM 1

NEW FINANCIAL SYSTEM 2

New financial system

· Acme Manufacturing industry manual financial system has many errors. Every financial operation has to be checked three times before it is approved. The new financial system will help lower the inaccuracies which are mostly recorded due to human error and miscommunication between the firm’s current auditors, Sylvia and Brad. It will ensure that financial operations are only conducted once and approved.

· The current process of determining the accounts payable takes around two days. The finance department team has to determine all the handed-out checks for making payments to the suppliers of the firm. These operations are tiring and result in many financial errors being made. The new accounting system will encourage making electronic payments (Xin.et al, 2019). It will be useful in ensuring that the firm can account for the accounts payable easily and effectively. It will reduce the process that takes two days to around one hour.

· Acme manufacturing industry operations of determining the money that is available for making short term investments can take about a week. The operations require the auditors to go through all the paperwork of cash inflow and outflow and make huge calculations. The process lowers the rates of returns which would have been received from the available funds. The new system will ensure that the cash inflows and outflows are easily accounted for in about five hours of less. Recording all operations of transactions in the new system will help the auditors access the information easily and be able to use the automated systems of calculations to arrive at the desired results quickly (Bindseil, 2019). As a result the firm will increase its capital gains and ensure that the time value of the cash available is increased.

· The manual system has not been useful in assessing risks that are involved in making certain short-term investments. The firm has encountered various cases of money lost due to failure of efficient evaluation of risks. Therefore, the new system will ensure that the risk assessment process which would take two days is carried out in three hours. Moreover, the assessment will provide better capabilities of determines the most hidden risks that result in financial loss (Catalini.et al, 2019). Acme manufacturing industry will be able to invest in high return investments and avoid high risk investments.

· Acme manufacturing takes two weeks delay every year in releasing their financial information. The manual processes take a lot of time in rechecking to ensure that all the data is correct and ready for being published to the public. The new system will ensure that investors and the general public are able to access the financial information of the firm early enough and on time. It will allow the firm to easily conduct quarterly financial reports. Moreover, the information included in the financial reports will be more accurate because all the elements included will be easily calculated.

· The current financial system of the firm would cause the company’s financial data to be lost because it does not have backups. It would take many days to recover information and some of the data would be completely lost. The new system allows the firm to back up its data on financial activities every twenty-four hours. All the information can be recovered within six hours.

· The manual accounting system of Acme manufacturing firm requires the firm to hire many employees in the finance department which increases the overall production costs. The operations which could be carried out by three audits in the old system can be carried out by only one person after the new system is implemented. The new system will allow the firm to utilize low labor force due to availability and easiness of carrying out financial operations.

· Accessing financial data is a very tiresome operations that can take up to two hours to get data that was collected last month. The system makes information less accessible to employees in the finance department. The new system will ensure that one can retrieve financial data that was collected even two years ago in a matter of seconds.

References

Bindseil, U. (2019). Central bank digital currency: Financial system implications and control. International Journal of Political Economy, 48(4), 303-335.

Catalini, C., Jagadeesan, R., & Kominers, S. D. (2019). Market design for a blockchain-based financial system. Available at SSRN 3396834.

Xin, B., Peng, W., Kwon, Y., & Liu, Y. (2019). Modeling, discretization, and hyperchaos detection of conformable derivative approach to a financial system with market confidence and ethics risk. Advances in Difference Equations, 2019(1), 1-14.