edp first draft

7/29/2019 EDP First Draft

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Balberona, Mary Cris

Catera, Rhea May

Chiu, William Emmanuel

Edang, Erick


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I. Introduction

A. BackgroundBrief History

The Sage Group PLC (Public Limited Company) is one of the leading global suppliers of

business management software and related products and services, principally for small to

medium-sized enterprises. The company was formed in 1981 and was floated on the London

Stock Exchange (LSE) in 1989. Sage operates in over 24 countries covering the UK, Europe,

North America, South Africa, Australia, India and China; and has more than 6 million

customers and more than 13,500 employees worldwide

With the growth in demand, Sage Pastel, Pastels international division, was formed in

the mid-1990s in order to provide world-class accounting product and services in the

international market. In 2003, The Sage Group acquired Softline, which was founded by

Ivan Epstein and Alan Osrin in 1988. Although Softlines heritage involves the SME market,

the company also has enough experience and expertise to cater to the requirements of

specific industries and larger organizations. Softline's core solutions cover accounting,

ERP, Payroll and HR, Business Intelligence, customer relationship management and retail

software solutions to small, medium and larger sized companies in South

Africa and Australia.With Pastels availability in eight languages including English,

Afrikaans, Dutch, Danish, German, Icelandic, Italic and Portuguese, its products are now

used in running many businesses. Today, Pastel products are actively sold in over 52

countries.


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As a leading provider of accounting software packages, ERP software solutions and

business management software solutions, Softline Pastels accounting software solutions

equip businesses in streamlining their accounting and management processes. With its

philosophy and practice of continuous innovation, the company has guided many customers

through a constantly changing technology landscape. As such, it is the preferred choice of

many clients especially in South African businesses. Pastels reputation as the trusted name

in accounting and payroll software is reaffirmed by the fact that 9 out of 10 accountants

recommend Pastel (www.sagepastel.com).

Pastel Product range Family Tree


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Key Statistics and Popular Personalities

The Sage Group PLC is the worlds third-largest supplier of enterprise resource planning

software (behind Oracle and SAP), and the largest supplier to small businesses. An Analysis

by IDC in October 2006 showed that Sages estimated market share of the small business

market is 21%, compared to Microsofts 12%, Oracles 9%, Intuits 6%, and SAPs 3%.The

remaining 49% served by other providers. Moreover, its Softline Pastel currently has

approximately 80% market share in South Africa and has been awarded the Independent

Software Vendor (ISV) Software Partner of the Year by Microsoft.

Sages was founded by David Goldman, Paul Muller, and Graham Wylle. Currently, the

companys key people consists ofTony Hobson (Chairman), and Guy Berruyer (CEO).

II. Objectives of the studyThe following are the objectives of this study:

1. To gain understanding of the software history/background and its reputation in themarket;

2. To identify and describe general features and modules and how they relate to thefunctioning of the software;

3. To comprehend the audit implications of the general features, modules and controlsidentified;

4. To asses the sufficiency and effectiveness of the general features, modules and controlsidentified;


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5. To gauge the impact of implementing the software within the organization;6. To enumerate the requirements for the software to function efficiently and effectively;

and,

7. To give comments after the each discussion and formulate recommendations/conclusionsat the studys end.

Scope and limitations of the study

The study aims to understand and discuss the software Pastel My Business, particularly in

the reliability, completeness and appropriateness of the general features, modules and controls

and the impact of the latter to business operations, preparation of annual financial statements,

and more importantly to the audit process. Discussions will involve matters enumerated in the

objectives coupled with comments deemed appropriate by the proponents to enable deeper

understanding of the logic of the software.

For this matter, the discussion will be constricted only to the software named and shall

not extend to the organization beyond the said software. General controls shall be included only

in the occasion that they are provided in the software. Consequently, application controls shall be

the focus of the study for they are inherent in the software and are required for the latter to

produce acceptable results. Insufficiencies of controls, if determined, shall be discussed together

with comments of the proponents, if necessary.

The study shall include also comparisons of the software named with an ideal software.

For this matter, the proponents shall be make use of the book Auditing EDP Systems by Watne

and Turney (1999) as a guide in formulating the characteristics of an ideal software to facilitate


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comparison. As a main reference, much of the discussions and comments shall be based on the

book stated.

Definition of terms

(a)Accountants Areais used exclusively by the accountant to process journal entries,prepare tax payments and refunds, prepare tax adjustments, and generate reports.

(b)Allocateis the matching each receipt, payment and write-off to a customer or supplierinvoice/account. (n. Allocation)

(c)Average Costingan inventory valuation method in which assigned values toinventories are adjusted/averaged every time purchased items are received

(d)Comma-Separated Values (CSV) file formatis used in importing/exporting bank,credit card statements or transactions to/from the software; consists of any number of

records, separated by line breaks of some kind; each record consists of fields, separated

by some other character or string, most commonly a literal comma or tab; all records

have an identical sequence of fields.

(e)Dashboard (My Business Dashboard)is an easy to read, often single page, real-timeuser interface, showing a graphical presentation of the current status (snapshot) and

historical trends of an organizations Key Performance Indicators (KPIs) to enable

instantaneous and informed decisions to be made at a glance.

(f) Databaseis an organized collection of data in digital form; sometimes known asdatabase management system (DBMS)

(g)Drill Downis a feature that lets the user click on a graph or a total and see thetransactions that make up the total value; is a multi-level that takes the user right down

into the original transaction


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(h)Item/sare the inventory being sold/used by the company(i) Navigation Baris a section of user interface intended to aide users in travelling

through the the software and its modules

(j) Open Financial Exchange (OFX) formatused as an open format for transferring databetween vendors, consumers, and financial systems; may be sent to individual users as

credit card or banking statements from a financial institution; can contain transactions,

statements, and other financial information;

(k)Startup and Small Businessesequivalent to small and medium-sized entities (SMEs);are companies whose personnel numbers fall below certain limits

(l) User Interfacein the industrial design field of humanmachine interaction, is the spacewhere interaction between humans and machines occurs. The goal of interaction between

a human and a machine at the user interface is effective operation and control of the

machine, and feedback from the machine which aids the operator in making operational

decisions.

(m)Widgetis a generic type of software application comprising portable code intended forone or more different software platforms. The term often implies that either the

application, user interface, or both, are light, meaning relatively simple and easy to use,

as exemplified by a desk accessory or applet, as opposed to a more complete software

package such as a spreadsheet or word processor.

(n)Wizardsis a user interface type that presents a user with a sequence of dialogboxes that lead the user through a series of well-defined steps


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III. Software Features:

A. Overview

Pastel My Business is very applicable for start-up and small businesses. This software is

not difficult to use and it helps the business prepare accounts and statements easily. It manages

the whole business cycle. With the functionality of the My Business dashboard, at just a glance,

one has important information available. One can track item quantities, costs, purchases and

manage bank accounts, credit cards and general company expenses. The philosophy of Pastel is

to let the customers go beyond accounting. The software allows simple and effortless daily

financial management so that the customers can focus on their core business and therefore, go

beyond accounting.

B. Features

General Features

Single user, multiple companies Manage customer invoices, payments, outstanding balances, bad debts and customer

statements

Manage supplier invoices, returns, orders and payments due Manage stock purchased, sold and returned, as well as the costs and quantities Report on the top selling stock, as well as the most purchased stock Enter bank account transactions and track the company expense payments Reconcile bank accounts and report on total cash received and paid out Use the profit and loss report to show the profitability of the business Use the VAT report for the VAT submissions


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Record all assets in the business and view an Asset Register Report The accountant can use the Accountants Area to process journal entries, view tax reports

and process tax payments or refunds

Specific Features

These are some of the things the user can do with the software:

Create one or more companies in which to work

Create items to sell

Create suppliers where items are purchased

Create customers where items are sold

Create bank accounts, so that you can pay suppliers and process receipts from customers,

optionally with discounts, and allocate the receipts to invoices.

Create accounts for sundry payments and receipts. This would include items such as rent,

telephone, stationery, bank charges, and so on.

Process journal entries and tax adjustments

Reconcile bank accounts to ensure they coincide with the bank statements

Produce powerful and sophisticated reports, including a Profit and Loss Report and a

Statement of Assets and Liabilities

More Specific Features

Managing Customers and Suppliers

The system keeps statistics of sales per customer and sales per item, purchases per supplier, and

purchases per item. One can create customer categories, supplier categories, and item categories,

and analyse the sales and purchases by these categories.

The system features a powerful Dashboard that shows:


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Due and Overdue invoices

Expired quotes

Overdue notes

Top customers by sales / suppliers by purchases

Top customers / suppliers by balance due

Top selling items

Sales / Purchases history graphs with full drill down to the invoice level

Customer and supplier ageing totals graphs with full drill down to the invoice level

Customer, Supplier, and Item Notes

One can create notes that can be attached to customers, suppliers, and/or items. These notes can

contain text or links to documents. One can specify an action date for each note, and then track

overdue notes via the Dashboard. For example, a customer may promise payment by a date. The

note will show on the Dashboard after that date as requiring action.

Printing, Viewing, and Emailing Reports

One can produce quotes, invoices, credit notes, receipts, and statements. One can print these,

and/or one can email them to customers or suppliers. One can also email any report to anyone.

Access to Company Data

The system gives one unparalleled access to the customer, supplier, item, and transaction

databases. One can list all these records, and one can then sort, group, and filter them to the

heart's content. This makes it easy to find any information one is looking for.


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User Defined Fields

A feature usually only found in far more expensive products is the ability to name and use

custom fields for customers, suppliers, and items. For example, one can track where one obtained

a customer's lead.

Modern Interface

The system features a modern, easy-to-use, and powerful interface that places all the system's

functionality right at ones fingertips:

The Navigation Bar to access frequently used functions with one click

Database entry fields allows one to pick customers and items very simply and even add new

records on the fly as one is working

Date entry to pick dates from a calendar

Wizards to guide one through the processes

Record tables to sort, group, and filter customers, items, invoices, receipts, and so on

Drill down is a feature that lets one click a graphic or a total and see the transactions that make

up the total value. Drill down is multi-level, and takes one right down into the original

transaction.


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SYSTEM REQUIREMENTS

Hardware Single User

Recommended Pentium IV 2GHz or Higher

Operating System

Recommended Windows XP with Service Pack 3, Windows Vista,

Windows 7

RAM

Recommended 1GB or higher

Screen Resolution

Minimum 1024 x 768

Requirements for all Users: DVD-Rom

D. Modules

1. Starting My Business

To start Pastel My Business, My Business icon in the desktop is located. Then, one can

open a specific company or create a company. Each company is a separate entity with its own

customers and transactions. Once a company is opened, the system can be registered.


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One can also convert data from previous version of My Business to My Business Version

3. Data can be converted from two places: on the Open Company screen and within the system

by selecting My Business button, followed by the Data Conversion. I f one converts on the Open

Company screen, the first step is to select the Convert button on the Open Company Screen. A

new screen will appear but just select the next button to continue. Another new screen will

appear to ensure that the current data is backed up before starting the conversion. Then, select

Pastel Invoicing, Pastel My Business Version 1 or Pastel My Business Version 2. After that,

enter a new company name for Pastel My Business Version 3 in the company name, then select

next to continue. If one wants to auto allocate transactions to the oldest invoices in the Version 3,

check the Set all customers and suppliers to use auto allocate to oldest invoice check box. Then,

select the Next button to continue and a screen is displayed. Then, click the Next button and

when the conversion is completed, select the Finish button.


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2. Working with Companies

Opening and Maintaining Companies

Once the system is started, a company is opened; therefore, one needs to select the

company and enter its password if there is one. When a new company is created, there is no

password. A company can be created from two places: In the Open Company window by

clicking the New button or in the home screen by choosing the My Business button and Create

Company menu option. If a companys data is no longer needed, it can be deleted. Once the

companys data is deleted, its information is irretrievably lost.

Company Details

Upon creating a new company, the system invokes the Company Details wizard. The first

step is to select the Company Details option. Then, enter information that prints on documents

such as invoices in the Company information Screen. If a new company is being created, the

Financial Year and Tax Systems screen will appear and one should set up the tax processing

rules in accordance with the rules of the country. In the Rounding Settings section, one can set

the system to round customer invoices. In the Regional Settings section, one can set how many


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decimals the system should use. In the Document Setup section, one can choose whether the

system should warn the user if item quantities and costs fall below zero. The system calculates

and displays the ageing balances when statements are printed. In the Document Message Settings

screen, enter messages to display on documents and statements.


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Backup and Restore Companies

It is essential to make secure copies of the company data because the database which is

stored in the hard disk is subject to failures, physical damage and theft. To access this function,

select the My Business button and then select Back up/Restore Company.

Change Passwords


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When a new company is created, the system sets the password to be blank so that one can

enter the database easily. One of the first things to be done is to create a password for the

company by selecting the My Business button and Change Password.

User Defined Fields

When maintaining customers, suppliers, items and assets, one may want to store

additional information about each record over and above the information the system requires. To

do this, the system allows one to name 12 additional fields for each of the record types.

To access this function, select the My Business button and then select User Defined Fields.


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Four types of fields:

Field Type What You can Enter

Text You can enter an

alphanumeric description,

of up to 30 characters.

Numeric You can enter numbers.

Date You can enter dates.

Yes/No This is a check box, which

you can check or uncheck

Export/Import Company Data

Master file elements of the company data can be imported or exported. To access this

function, select the My Business button and Import/Export. Take note that prior to importing

data, the company must be backed up.

3. Working in My Business


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There are various elements in the system. Menus can be used to choose program function.

The working area displays a list of existing records, such as customers, items, and so on. The

screen displays best at 1024 x 768 but other sizes can be used.

Program Functions

Program functions are in logical positions within the menu system. By clicking on the

Home menu item, the company Dashboard is shown. In the Quick View Menu, customer,

supplier, item, account and bank account information can be viewed. In the Customer menu,

there is an access to any function that has to do with customers. In the Suppliers menu, there is

an access to any function that has to do with suppliers. In the items menu, any function regarding

items can be accessed. In the Banking menu, bank and credit card accounts can be maintained. In

the Accounts menu, expense accounts can be entered and monitored. In the Accountants Area,

reports and functions which are part of an accounting function are found. In the Asset menu,

assets can be maintained. In the reports menu, variety of reports can be selected to be printed or

to be emailed. The Help menu option is an access to the User Guide.

Processing Transactions


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Transactions are processed through document screens and grids in My Business. Data

such as numbers and texts are entered into the system in standard ways. The data entry elements

include selecting records from a list, entering dates and working in data entry grids. Master

records or static records can be created in the system. Record selection fields have a drop-down

arrow which can be clicked. This is how it works: Click an item to select it, then to add new item

click on the Add New Item option to open the applicable maintenance screen which is to be

completed with Customer, Supplier, Item, Bank or Account details. Finally, click the Save

button. The sequence can be set in which My Business places the day, month and year in the Edit

Company screen. When entering the date, one can choose a date from a calendar called a date

picker or enter the day, month and year as separate fields. Data entry grids are tables used to

enter invoices lines. The Tab key can be used to move to the next column. To move to a new

line, press Tab on the keyboard. To delete a line, click on the x button at the end of the line that

should be deleted. To edit lines, click on any fields.

Record Tables and Drill Down

The system displays lists of records in a table. Record tables are powerful tools to sort

records and select the columns to be viewed. The tables work in the same way irrespective of the


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information they are displaying. To open the records, double click the records. By clicking on the

arrow to the right of each of the headings, a customer can be selected to be viewed.

Drill down is a feature that lets the user click on a graph or a total and see the transactions

that make up the total value. Drill down is a multi-level that takes the user right down into the

original transaction. The user can click a days value and see the transactions that make up that

value. By clicking the magnifying glass on a transaction line, the original invoice can be seen.

The user can drill down just anywhere where a graph or balance can be seen.

Maintaining Master File Records

Master file records contain static information like customers, suppliers, items and their

respective categories. The user can maintain these records via their respective menus. To edit a

customer account, List of Customers from the Customer menu is selected. Then, a list of existing

records is displayed. These are record tables, which allow sorting, grouping and filtering. To add

a new record, click the Add button. To edit an existing record, double click on the line desired to


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be edited. To delete a record, select the x button on the line desired to be deleted. There are four

tabs that can be edited: Contact Details, Additional Contacts, Notes and User Defined Fields.

The other three tabs are completed by My Business using transactions that were processed:

Activity, Quotes and Unpaid Invoices.

Notes, Messages, Descriptions, Comments

Notes can be created for Customers, Suppliers, Items, Accounts and Banks and Credit

Cards. These notes can be open ended. When the Note tab is clicked, a note line is automatically

added. The note can be edited by clicking the fields. However, the Entry Date cannot be edited.

When documents or transactions are entered, additional text for the document or with

each transaction can be entered. For documents such as quotes, purchase orders and invoices,

these are called messages. For supplier payments, customer receipts, and write-offs, they are

called descriptions. If standard messages are set up in the documents, the message field can be

used to enter a message specifically for the document that one is working on. To add the


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message, select the Add Message button. To add standard messages, select . In the Code

field, enter the message to be displayed in the Message field. Then select the OK button and

select the message to be displayed followed by the Select button.

Filter and Searches; printing, Viewing, and Emailing Reports

On all the maintenance screens, there are Search and View fields. They allow one to

search for specific master files and documents. The View field contains specific system default

filters that can be used for more advanced searches.

Reports are printouts from the system. They can be exported into many different formats.

In addition, they can be emailed to anyone as long as there is an e-mail software running on the

workstation and the recipients email address is known. Each report window has the following

elements: (a) The Report Filter which displays options specific to each report. (b) The Report

Options section which gives options common to all reports. (c) The Print button which prints

report. (d) The Preview button which allows the report to be viewed in the screen. (e) And, the

Email button which lets the user quickly e-mail the report.


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4. Editing Master Files

Customers

Customer categories can be created and then analyzed per category. To create new

category, click on the Add Customer Category button. Customer records are maintained in order

to sell items to customers. This function can be accessed by selecting Customers, then List of

Customers. To edit a customer account, double click on the customer record line. In order for the

system to automatically allocate the customers receipts to the oldest invoices, the following tabs

can be edited: Contact Details, Additional Contacts, Notes and User Defined Fields. The other

three tabs which are Activity, Quotes and Unpaid Invoices can be completed by using

transactions that have been processed. The Activity tab summarizes the financial activity with

the customer. The Additional Contacts tab lets one enter contact details for persons in the

customers company. In the Notes tab, notes for the customer can be entered. In the User

Defined Fields tab, additional fields can be entered. In the Quotes tab, the quotes for the client

can be seen. In the Unpaid Invoices tab, unpaid invoices for the customer can be seen.


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Suppliers

Supplier categories can be created to be analyzed. To access this function, select

Suppliers and then select Suppliers Categories. Supplier records can also be maintained and the

records can be accessed by selecting Suppliers, then List of Suppliers. When one adds or edits a

supplier, the Edit Supplier window opens. In the Contact Details tab, postal and physical

addresses as well as contact details are entered. The Activity tab summarizes the financial

activity with the supplier. The additional Contacts tab allows the user to enter contact details for

persons in the suppliers company. In the Notes tab, notes are entered for the supplier. In the

User Defined Fields tab, additional fields can be entered. In the Purchase Orders tab, purchase

orders that have been processed for the suppliers can be seen. One can also drill down to see

details. In the Unpaid invoices tab, the unpaid invoices for the supplier can be seen.

Items

Item categories can be created and then analyzed. This function can be accessed via

Items, then Items Categories. To create another category, click on the Add Item Category button.

In this function, one can maintain records for goods and services. Sales and purchases statistics


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can be viewed. This function can be accessed by selecting Items and then List of Items

(Inventory). When an item is added or edited, the Edit item window opens. One can use service

items to sell maintenance contracts, consulting hours and so on. For new items, opening cost and

quantity values can be entered. In the Activity tab, one can drill down to the original document

by clicking on the magnifying glass. In the Price fields, exclusive and inclusive selling price is

entered. In the Notes tab, notes are entered for the item. In the User Defined Fields, additional

fields can be entered.

Bank and Credit Card Accounts and Accounts

Bank and credit card categories can be created. This function can be accessed via

Banking then Bank and Credit Card Categories. To create a new category for bank accounts,

click on Add Bank Account Category and enter the name of the new category. Bank and credit

card accounts can be used to: (a) receive payments from the customers, (b) pay suppliers, (c)

make incidental payments, (d) receive cash from other sources, and (e) process tax payments.

This function can be accessed by selecting Banking and then List of Banks and Credit Cards

menu. Details are then entered in the Bank and Credit Card Account. In the Notes Tab, notes for

the account are entered. In the Activity tab, the summary of the bank accounts activity can be

seen.


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Accounts can be used to analyze transactions entered in the Bank and Credit Cards

function as well as Journal Entries captured in the Accountants Area. This function can be

accessed by selecting Accounts and then List of Accounts. One can also edit or add an account

item. If a new account is created, there are several financial categories to choose from. They

include Cost of Sales, Expenses, Non-Current Assets, Current Assets, Non-Current Liabilities,

Current Liabilities, Owners Equity, Income Tax and Other Income. Once transactions are

recorded against an account, the category cannot be changed. Assets can be created separately

using the Assets menu option.

5. Processing Transactions

Selling and Purchasing Items

When selling to customers the following documents are involved: Quote, Invoice and

Customer Return. When purchasing from suppliers these documents are needed: Purchase Order,

Supplier Invoice and Supplier Return. These functions can be accessed in the menus. To setup

recurring invoices, select Customers then Customer Recurring Invoices. Customer Statement

Run option is used to generate customer statements and deliver it to customers using distribution

methods. The typical invoice window has four sections; the header section where customer and

supplier account is chosen, the lines section where items are entered, the footer section where

messages are entered, and the options section at the bottom of the screen which are Process


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Receipt, Process, Process and New and Print. Once the document is already printed or emailed, it

cannot be edited anymore.

Receiving and Making Payments

After purchasing from the suppliers and then selling to customers, payments must be

received and made. These are the processes: pay a supplier, receive money from a customer,

write-off amounts if customer cannot pay and process receipts and payments from and to

customers and suppliers via the bank and credit card transactions option. If a customer returns

items or the business returns items to the supplier, Customer Return or Return Items to a

Supplier is created to reverse the invoice, adjust the inventory quantities and update the balance.

These functions can be accessed by selecting Customer Receipts or Supplier Payments options,

or use the Process Banks and Credit Cards, or process account receipts and payments.

Bank and Credit Card Transactions

Account payments and receipts, customer receipts, supplier payments or refunds can be

processed using this function. In order to process customer and/or supplier receipts and/ or


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payments using this function, there is a need to allocate the receipts and payments under the

customer and supplier menu options unless one has selected to auto allocate receipts or

payments. This function can be accessed by selecting Banking and then Process Banks and

Credit Cards. In the Payments tab, account supplier and tax payments are processed. In the

Receipts tab; account, customer receipts and tax refunds are processed. If the user shows

previous transactions and the user edits an existing Customer Receipt or Supplier Payment, any

allocations made on the receipt or payment will be removed and there is a need to re-allocate

transactions. My business automatically remembers which Account, Customer or Supplier to use

based on the description entered while processing the bank and credit card transactions. If the

user enters a description that My Business recognizes, the system will automatically complete

the type of transaction and account, customer or suppliers selection for the user. The mapped or

completed transactions display in light grey and the new transactions display in black.

Import and map Bank and Credit Card Statements

My business allows the user to import bank and credit card statements that were

downloaded from the Internet, either in OFX or CSV format. The mapped or completed

transactions display in light grey and the new transactions display in black.

Reconcile Bank and Credit Cards


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Payments and receipts may be processed via one or more bank accounts. These bank

accounts can be reconciled against the bank statement. The reconciliation process does not affect

any values on the system and its use is optional. This function can be accessed by selecting

Banking and then Reconcile Banks and Credit Cards.

Allocations

The business sells to customers via invoices, and the customers pay via receipts. In

addition; discounts, returns and write-offs can be processed. There is a need to match each

receipt, payment and write-off to a customer or supplier invoice. The best time to do the

allocation is when actual payment is entered. When the transaction is entered, one can allocate it

to the correct invoice. To allocate a receipt as it is processed, the line for the document record

which is to be allocated is clicked. To allocate receipts and payments after processing them, the

Allocate Receipts and Allocate Payments menu options are used.

Item Adjustments

When a new item is created, the opening cost price and quantity on hand is entered.

Thereafter, the quantity adjusts as the items are purchased and sold. The cost price also adjusts as

the items are purchased. The system calculates a new cost price using average costing each time

an item is purchased. Item Adjustments can be used to correct errors as well as to make


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percentage adjustments to selling prices for a range of items. To access this function, select Items

and then Item Adjustments.

Adjust Opening Balances

When creating a customer, a supplier, bank or credit card accounts and an account, the

opening balance and date are entered. Once any transactions for the record are processed, the

opening balance fields cannot be changed. To access this function, select the Adjust Opening

Balances option from the Customers, Suppliers, Banking and Accounts menu options.

Accountants Area

Accountants Area is exclusive for accountant processing such as Journal entries and Tax

Adjustments. These functions can be accessed by selecting the Accountants Area menu option.

In the Process Journal Entries, accounts can be increased or decreased and select to add an

affecting account.

My Business calculates the tax. The input tax is calculated by working out the tax

included on all the supplier invoices that were processed. The output tax is calculated by working

out the tax included in all of the customer invoices that were processed. The difference of the

two is the amount of tax owed by the company. In the Detail screen, the date for the transaction

and the bank account that will be affected as well as the amount are edited. In the Tax adjustment

screen, the input tax and the output tax can be adjusted.


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Accountants reports are available. They include tax reports, tax audit reports, trial

balance, opening balances and tax adjustment report, audit trail and tax payments and refunds

report. In My Business, the trial balance can be exported to a CSV file. To export the trial

balance, the date range and viewing options can be specified. Then the Export data button is

clicked. To assign account numbers, the Assign Account Numbers button is clicked. The system

will return to the Trial Balance Export screen, then, the Export data button is clicked.

6. Enquiries and Reports

The Company Dashboard

The Company Dashboard shows some key facts about the business. The To Do List

shows due and overdue customer and supplier invoices, expired quotes and overdue notes. The

Banking widget summarizes the bank account activity and gives the user an option to import the


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bank statement. The Sales History shows a graph of total sales for this year and per month. The

Top Customers by Sales shows the top value customers. This function can be accessed by

selecting the Home menu option. Each element of the Company Dashboard can be drilled down

and the user can customize some of the elements for more information. To add more graphs to

the Dashboard, the Manage Widgets and then Views are clicked.

Quick Views

Quick View menu lists the different types of information which can be viewed. First, the

master file should be selected from the menu and then the Quick View screen details the latest

transactional activity on the selected master file record. The running balance displayed represents

either an outstanding balance and/or current balance for the selected master file record. The

documents can be printed or emailed by clicking on the Select All button. But if only selective

documents are to be printed, there is a check box to be checked next to any document or

transaction.


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Reports

There are several reports available in the Reports menu. The Customer Reports include

List of Customers, Sales by Customer, Customer BalancesDays Outstanding, Customer

Statements and Customer Transactions. The Supplier Reports include the List of Suppliers,

Purchases by Suppliers, Supplier BalancesDays Outstanding, Supplier Statements and

Supplier Transactions. The Item Reports include the List of Items, Sales by Item, Purchases by

Item, Item Movements and Item Valuation. The Bank and Credit Card Reports include List of

Bank Accounts, Bank Account Transactions, Cash Movements and Cash Flow Report. The

Account Reports include the List of Accounts and Account Transactions. The Tax Reports

include the Tax Report, Tax Payment and Refunds and Tax Audit Report. The Financial

Statement Reports include the Profit and Loss Report, Statement of Assets and Liabilities Report

and Trial Balance Reports. The Asser Reports include the Asset Register Reports. Finally, the

Other Reports include To Do List Reports and Audit Trail Reports.

My Business allows the user to customize the following: Customer Documents and

Statements and Supplier Documents and Statements. On the report screen, the Layout tab is

selected. The user can select layout. Using the Standard Controls, Report Explorer and Field List,

the fields on the layout can be added, moved or edited. The report can be viewed by clicking the

Preview button.


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IV. Internal Control Structure

As an accounting software for small and medium-sized companies, Pastel My Business

caters to the need of businesses for reliability of data processed and information reported. This

reliability is very important for a business entity in order that management can make proper

decisions to meet its ultimate goal of maximizing profits. With this, Pastel My Business is

integrated with internal controls that help achieve specific company objectives.

The primary purpose of this section is to describe application controls which meet the

following control objective: preventive objective, detective objective, and corrective objective,

possibly from the preparation and input of data to the processing, correcting and finally, delivery

of output in the form of reports.

Application controls, however, are influenced by the strength of general controls. As

general controls are not entirely captured and provided by the accounting software, the general

controls shall only be referenced alongside the discussion of application controls.


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A. Preventive Controls

Preventive controls are those which prevent the occurrence of errors and discourage the

commitment of fraud. In Pastel, the following preventive controls are found:

User Procedures Manual

The software has a thorough, simple and clear step-by-step User Guide complete with

definitions, functions, screen shots and lists which teaches and explains to the user how the

system is utilized. The User Guide has six main chapters, namely: Getting Started, Working with

Companies, Working with My Business, Editing Master Files, Processing Transactions, and

Enquiries and Reports. The contents of this guide are the basics in using Pastel, and do not

include the so much details. The processes undertaken, the fields to be filled up, and the purpose

or use of reports and functions.

This User Guide can also be viewed instead as a Navigation Guide in the computer as a

presentation rather than reading it in hardcopy.

Source Document Design

The source documents of the software are editable. Therefore, the user can adjust and

design a better document format which corresponds to greater internal control. For instance,

additional fields for footing and cross-footing purposes can be added to the document design.

The company logo, header and other details can also be edited.


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In the Invoices printed, the software automatically includes in the documents the details

and information about the parties related in the transactions. Example of these information are

addresses, contact numbers and tax numbers.

Prenumbering

Each processed transaction has a document number which is automatic but can be

changed. The automatic prenumbering follows the last previous number assigned to a

transaction. Thisprenumbering feature is present in the Purchase Order, Suppliers Invoice, and

Tax Invoices as well as in the Supplier Return and Payments, and Customer Returns and

Payments.

These document numbers appear in the reports printed by the system as references.

Actually, these same document numbers can serve as batch numbers for every batch input.

Forms Security

In the records for Supplier, Customers, Items and transactions, it is reflected when such

record has been printed already by having a check in the column Printed. This is a security in the

forms and documents since it signals to the user and keeps track of the documents that have been

transformed into hardcopy. The record can again be printed.

Identification of Preparer

A username and password is required in order to enter the system. However, once a user

has entered the system. No other identification of preparer is required.


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Evidence of Approval

In the records of Customers, Suppliers, Items and Account, these records cannot be

deleted unless all activities are settled, including payment of invoices and receipt of payments

from customers, or if the balance remains zero.

The system will warn you that a Customer, Supplier, Item or Account has an activity,

which means that is part of an unsettled transaction. Unless all these activities are settled, the

system will never allow you to delete a Customer, Supplier, Item or Account.

In other transactions which go beyond set limits, example in the Credit Limit, the system

will warn the user if he wants to proceed with the transaction. By confirming the question, the

user can then go on.

B. Detective Controls

Detection controls are designed to detect those errors that inevitably occur despite

preventive controls. These controls ensure that unreliable, improper, unauthorized, invalid, or

lost data and transactions are detected.

Batch Controls

Batch identification numbers

For every batch of transactions processed, a batch number is assigned through the

document number. Also, a reference number is assigned for the batch. This number can come

from the Invoice or source document numbers before data entry.


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Control totals

Totals are provided for each category of amounts. For instance, in a report Purchases by

Supplier, there are totals for a document number, for a supplier, and finally a grand total. This

allows an easier review and footing of totals.

Sign tests

Sign test does not exist for Quantity and Price exclusive of tax. For Discount Amount, if

a negative number is entered, the entry is invalidated and the discount goes back to zero.

In some fields for amounts, negative numbers can be entered as correction to an error in a prior

transaction. This is the correcting mechanism of the system.

Alphanumeric condition tests

Alphabets cannot be entered in the fields for amounts. The value goes back to zero if

there is an attempt to enter a non-digit number. In some fields, the system just does not read the

attempt to enter, meaning the value does not change at all.

Limit test

If a customer exceeds the credit limit, the system will require a confirmation but one can

easily proceed by selecting YES.

The number of decimal places for a particular amount can also be set by the user in the

very beginning. Upon setting up, the system asks the user what will be done to the excess

decimal places. One can choose to round up or round down.


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Batch Input

The system does not allow the user to proceed with the processing and to enter data in the

other fields unless a principal required field is filled up.

In Adding a new Customer, Supplier, or Item, the user must first fill up the name of the

Customer or Supplier and the description of the Item, only then can the user proceed to fill up the

other fields.

In processing an Invoice, the user cannot enter the Quantity and Prices without putting an

item description.

Sequence test and Anticipation Control

The sequence follows the sequence of the document number, displaying the most recent

at the top.

The anticipation control is present in the creation of a Suppliers Invoice, when the user

tries to enter or link a Purchase Order with the invoice through entry of a P O number and this

PO does not exist, the entry will be rejected and the field will go back to blank.

Field presence check

There are required fields that must be filled up before one can proceed to process a

transaction. In creating a new Supplier, Customer or Item, the name of the supplier/customer or

the description of the item must first be entered so that one will be able to fill up the other fields

and save the data. The presence of a field is necessary to be able to go on with the transaction.

Also, in a Payment transaction such as payment to a supplier, a bank account must be

entered before one can process the payment. This is the same with the purchase or sale of items.

Unless an item description is entered, the fields Quantity and Price cannot be changed and one


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cannot proceed with the transaction. In the correction and adjustment of an incorrect and

erroneous balance, the field for Reason must first be filled before one can go on entering a new

balance.

C. Corrective Controls

Correction controls ensure that errors that are detected will be properly corrected and

resubmitted for input and processing.

Error Correction Procedures

In the Users Guide, there are instructions for error corrections and adjustments of

incorrect data entries. This part of the manual explains the kind of error, the manner of how this

error can be corrected and the procedures to be followed.

Error Log

For system errors and failures, a log is created by the system which is saved in the

computer folder. This log provides a very detailed list in the errors encountered by the system,

including start up failures and loading errors.

Audit Trail

In the Reports, an Audit Trail can be printed. This is a summary of all transactions

processed by the system for a period. The period can be selected by the user within specific

dates. The Audit Trail contains the events, dates, time, reference sources, prices and tax effects.

However, it does not include the person accountable or the preparer of the transactions listed.


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This audit trail classifies the transactions by nature: Account Payment, Account Receipt,

Opening Balance Adjustment, Quotation, Customer Tax Invoice, Journal Entry, Supplier

Invoice, Supplier Purchase Order, Supplier Return, Transfer-in and Transfer-out. It also

identifies by event such as created, updated or deleted.

Reverification

The system prompts the user by warning through a dialogue box that an error is being

made by the user. The user has to enter the transaction in a correct way again.

Control Totals Adjustment

The errors in My Business are corrected through editing the data in the record or a new

entry with a negative amount can be entered to correct an erroneous prior transaction.

For opening balances, however, the balances can only be edited through the Adjust Opening

Balance function while the errors in the quantity of items, costs and selling prices can only be

adjusted in the Item Adjustment function.

V. Comments and Discussions

Features

One of the outstanding features of Pastel MyBusiness is that it has a very clear step-by-

step navigation guide complete with screen shots which can be printed and used as a procedures

manual. The user guide contains several modules which can assist the user on how to use the

software. Moreover, the modules are step-by-step. The first module discusses on how to get

started. Then, the second module focuses on working with companies which already the lesson

proper. It is then followed by Working in My Business, Editing Master Files until Enquiries and


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Reports. It is really appropriate that they discussed Reports in the last module because in actual

practice, reports are the outputs which are important for decision-making.

Regarding the general features of the software, it has the VAT report for the VAT

submissions which is very important for the company to know its VAT balances to be paid.

However, the user of the software must make sure that the correct tax rates must be entered;

otherwise, they can be criminally liable to the government. The Asset Register Report is also

useful so that the company can keep track the value of its total assets. This will also help them

when preparing the balance sheet. The Bank Reconciliation feature of the software is also useful

to check whether there are discrepancies between the book balance and the bank balance. In the

systems powerful Dashboard, the top selling items is shown which can aid the company

regarding what to sell more in the future. The company may eliminate the product-line with the

least sales and focus more on the most popular product line. The sales/purchases history graph is

also significant for the entity to know the trend and fluctuations of their sales amounts and

purchases amounts.

Internal Controls

There are three important internal controls discussedby Auditing EDP Systems by

Watne and Turney. They are the preventive controls, detective controls and the corrective

controls.

Preventive controls should be applied in data capture, batch data preparation and batch

input. For data capture, Pastel My Business has no problem regarding User Procedures Manual;

however for Source Document Design, Prenumbering and Forms Security, there are some


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problems. For the Source Document Design, there are no boxes or area for authorization

signatures and reference number is not compulsory. This might lead to unauthorized personnel to

interfere. Ideally, there should be a box or area where a person can place his signature to avoid

problems. Moreover, although dates are automatic, there is no date of printing. The date of

printing is very important as evidence to show the timeliness of the report. Without the date of

printing, the user might adjust or estimate the date; therefore the date of printing is vital. For

Forms Security, the person who printed and filled up the form is not reflected. This might cause

confusions regarding who is responsible for the report. Regarding the Evidence of Approval,

Customers, Suppliers, Items and Accounts cannot be deleted unless all activities are settled,

including payment of invoices and receipt of payments from customers, or if the balance remains

zero. This feature can prevent accidental deletion of some important items. Going to the Batch

Data Preparation, sales invoice amount can be changed anytime even if prepared for an earlier

time. This means that if a person accidentally changed the amount of the sales invoice, then the

records would be effected which would lead to conflicts between customers. Therefore, it would

be better if sales invoice amount is changeable only after a series of confirmations.

Going to the detective controls, there is a problem regarding Key Entry Validation

because the Sign test does not exist for Quantity and Price exclusive of tax. This means that there

can be negative signs for Quantity and Price exclusive of tax. Sign test should apply to all items

which have amounts. Regarding their limit test, if a customer exceeds the credit limit, the system

will require a confirmation letter but one can easily proceed by selecting Yes. Since limit test is

very important, it would be better if after selecting Yes, another question should be asked which

is Are you sure? The purpose is to verify whether the user is really willing to take the risk.

Regarding discount amounts, if negative number is entered, the entry is invalidated and the


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discount goes back to zero. This is a good control. For the batch input, the software has a very

good sequence test since the sequence follows the sequence of the document number, displaying

the most recent at the top.

For the corrective controls of the software, there is a problem in Audit Trail. Although a

summary of all transactions processed by the system can be printed and the period covered can

be adjusted, it does not include the person accountable or the preparer of the transactions listed.

This means that although fraud can be identified, the person responsible for the fraud cannot be

identified. It is indeed a must that the name of the person accountable for every transaction must

be stated. For batch data preparation, there is an error log for the errors encountered by the

system which explains the source of the error. This is useful because the source of the error is

identified and if the source of the error is eliminated, the problem is solved.


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VI. Reference

http://www.sagepastel.com/

http://www.pastel.co.za/Accounting-Software-Products/My-Business.asp

http://www.ggaccounting.co.za/pastel-my-business

http://www.pastel.co.za/Accounting-Software-Products/My-Business.asp

http://www.sagepastel.com/Sage-Pastel-Software-About-Us.asp

http://www.sagepastel.com/Sage-Pastel-Software-Become-Business-Partner.asp

http://www.sagepastel.com/Sage-Pastel-Software-Newsroom/Related-Articles.asp

http://www.sagepastel.com/Sage-Pastel-Software-Development-Kit-SDK/Index.asp

http://en.wikipedia.org/wiki/Softline

http://www.cloudave.com/1382/pastel-my-business-online-review/

http://allafrica.com/stories/201110211380.html

My Business User Guide