AIS FIX

INTRODUCTION Coca-Cola is the world's leading manufacturer, marketer and distributor of nonalcoholic beverage concentrates and syrups. Company manufactures beverage concentrates and syrups and, in certain instances, finished beverages, which we sell to bottling and canning operations, authorized fountain wholesalers and some fountain retailers. They also market and distribute juice and juice-drink products. In addition, they also have ownership interests in numerous bottling and canning operations. In order to maintain the quality of product, Coca-cola company applied the best system to their company, one of them is accounting information system.accounting information system (AIS) is the system of records a business keeps to maintain its accounting system. This includes the purchase, sales, and other financial processes of the business. The purpose of an AIS is to accumulate data and provide decision makers (investors, creditors, and managers) with information. So, in this paper we try to explain the accounting information system that Coca-cola company use and we hope the reader can understand and get new knowledge from this paper.

COCA-COLA COMPANY PROFILE The Coca-Cola Company is the world’s largest beverage company, The Coca-Cola Company markets four of the world’s top-five soft-drink brands—Coca-Cola, diet Coke, Sprite and Fanta. And now currently the company has offered two new products in this market, Sprite 3G and Fanta Citrus. Sprite 3G is doing its business successfully and meeting the expectations of the management by capturing market share of “Dew” quickly but on the other hand the second newly introduced product is not meeting the expectations and still struggling to find out a proper place in the market but it is expected that the company may stop its production of this product in near future. Their beverage offerings encompass nearly 400 brands, including coffees and teas, juices and juice drinks, sports drinks and waters as well as carbonated soft drinks. With operations in more than 200 countries, they have a diverse workforce of approximately 50,000 individuals. Together with their subsidiaries and bottling partners, they strive to be an integral and contributing member of each of the communities where they operate. The Coca-Cola Company is the world's leading manufacturer, marketer, and distributor of nonalcoholic beverage concentrates and syrups, with world headquarters in Atlanta, Georgia.

The Company and its subsidiaries employ nearly 31,000 people around the world. Syrups, concentrates and beverage bases for Coca-Cola, the Company's flagship brand, and over 230 other Company soft-drink brands are manufactured and sold by The Coca-Cola Company and its subsidiaries in nearly 200 countries around the world. By contract with The CocaCola Company or its local subsidiaries, local businesses are authorized to bottle and sell Company soft drinks within certain territorial boundaries and under conditions that ensure the highest standards of quality and uniformity.

Operational Structure All Over the World The Company's operating management structure consists of five geographic groups. The North America Group comprises the United States and Canada. The Latin America Group includes the Company's operations across Central and South America, from Mexico to the tip of Argentina. The Greater Europe Group stretches from Greenland to Russia's Far East,

including some of the most established markets in Western Europe and the rapidly growing nations of Eastern and Central Europe. The Africa and Middle East Group encompasses the Middle East and the entire continent of Africa. The Asia Pacific Group has operations from India through the Pacific region including China, Japan, and Australia. In past it was seen that the company was paying more attention to European and American region but now it is recognized that the Middle East region is much more attractive as compare to those areas due to intensity of population and some such markets which are still not captured by any of the firm. So, now the firm is paying more attention towards these areas to increase market share of the company in these countries. The visit of chairman in 2005 is an evidence of this fact that company is now focusing on this region tomaximize its share in this market. According to the management of the firm, they are working on a plan to achieve about 50% of the market share by 2011.

Mission of Coca-Cola Company From their heritage to their mission to the people who bring their products to thirsty consumers, The Coca-Cola Company is a part of lives everywhere. Their Mission is “To Maximize Share-Owner Value over Time.” In order to achieve this mission, they must create value for all the constituents they serve, including their consumers, their customers, their bottlers and their communities. The Coca-Cola Company creates value by executing a comprehensive business strategy guided by six key beliefs: 

Consumer demand drives everything they do.

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Brand Coca-Cola is the core of their business.

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They will serve consumers a broad selection of the nonalcoholic ready-to-drink beverages they want to drink throughout the day.

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They will be the best marketers in the world.

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They will think and act locally.

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They will lead as a model corporate citizen

Objective The ultimate objectives of their business strategy are to increase volume, expand their share of worldwide nonalcoholic ready-to-drink beverage sales, maximize their longterm cash flows, create economic-value-added by improving economic profit and creating such an image of the company that the consumers start differentiating their product from other competitors. The Coca-Cola system has more than 16 million customers around the world that sell or serve their products directly to consumers. They keenly focus on enhancing value for these customers and helping them grow their beverage businesses. They strive to understand each customer's business and needs, whether that customer is a sophisticated retailer in a developed market or a kiosk owner in an emerging market.

There are nearly six billion people in the world who are potential consumers of their Company's products.

Their success in achieving their mission depends on their ability to

satisfy more of their beverage consumption demands and their ability to add value for their customers. They achieve this when they place the right products in the right markets at the right time. Ultimately, their basic task to perform in a market like Pakistan should be to confirm the availability the products all over the country because it is observed that one of the main reason of low market share of this brand in Pakistan is unavailability of the products in most of the areas.

ORGANIZATIONAL STRUCTURE Following table shows different Departments in Coca-cola company along with their respective functions Department Accounts Department

Function To prepare monthly, quarterly and annually Accounts, Costing, Budgeting & Forecasting. To handle payable and insurance, Inventory & Stores etc. Finance Department Arranging Finance and negotiate over coat of finance, To handle sale, receivable, debtor aging, cash and bank etc. Internal Audit To monitor the implementation of internal procedures, policies internal control systems and repot any violation. Detection and control of financial risk and frauds. Information Technology Development of SAP program, Networking, Hardware Department Maintenance Human Resource Hiring new manpower, satisfaction, Motivation, Appraisals etc Health Environment & ISO Audit and ISO implementation, Internal safety & Security (HEC) environmental awareness and health improvement. Production Department To undertake production activity and maintain desired production volume Electrical & Instrument Maintain and economies electricity consumption, Installation and maintenance of Electrical & Electronics Instruments Mechanical Department Installation and maintenance of plant and machinery. Research and Development Product development, product improvement and (R&D) economies production cost by discovering raw material substitute or change in production process. Quality Control Maintain quality and deal with complaints Project Department To design and build structural design of new plant to be installed. Marketing & Sale To increase existing demand, to work as organization’s intelligence in large outer environment, customer satisfaction, advertisement, smooth dispatch, rationing of products in case of excess demand

DATA FLOW DIAGRAM System decomposition

payroll

The diagram above show us the decomposition of each department cycle that Coca-cola Company have.

Context DFD

Context diagram shows major data flows into and out of system. Therefore, detailed data flows within the system are not shown on this type of diagram.

SALES CYCLE

In the DFD above we can see the flow of major cycle that start with the sales cycle . The destination in this diagram is from customer to customer to make it more clear we provide the sales cycle in detail next page.

The sales cycle starts with customer order, because the manufacturing company is only receive the big order and have a special price. There are a negotiation with the customer, then after the negotiation process and make a deal with customer, then continued to customer order processing and will move to the next cycle, Planning cycle.

We provide recomendation sales flowchart to the company that can support their data flow diagram.

PLANNING CYCLE

MANUFACTURING CYCLE

In this cycle, it start from the production schedule that has been scheduled by planning department. While the schedule have arrived, the production department get their production order and they will start the production. While, the raw material division will check and give the information about raw materials that ready to use in production process. Before and after the production process, they should have data for the previous and updated raw materials. Then, after the production have occurred, this manufacturing department will give an information or notice of completion to the package and shipment department. Before that, they will send the complete product to the product inventory, and the system will update the current number of product that available in their storage. Production Process The environment of the production hall is very clean unlike of other players of the industry. In Multan plant, there are two lines of production in which all the products can be produced by making an adjustment in syrup and concentrate. Production process starts with washers

where all the bottles are washed before filling. In washer 24 bottles are entered in a row at a time and the washer is capable of containing 300 cases at a time. This washer consists of 3 tanks:  Tank 1: Caustic 1 to 1.5% - Temperature 45 to 85 centigrade  Tank 2: Caustic 3 to 4% - Temperature 65 to 75 centigrade, Stabilon 0.4 to0.5%  Tank 3: Cold water and air, Below 0 centigrade Due to too many fluctuations in temperature, all the germs are killed and removed. After this some light men inspect all the bottles. These people are performing jobs for maximum of 20 minutes at a time then a next pair comes in their place and so on. Next step is of mixing the syrup and water and filling them in bottles. For this purpose water is obtained from a depth of more than 510 ft. Carbo Cooler is used for mixing the syrup and water and then bottles are filled. After filling and marking date and time of production light men again check bottles. Three light men are working in the plant and their duties are given below: First -----Check brand, breakage and dirtiness. Second---Check cleanliness. Third ---- Level of liquid after production. Due to such an effective system of quality controlling, plant is certified by ISO. The more important certificate is TCCQS (The Coca Cola Quality System), which is awarded by the company itself to a limited number of plants. It is given to only 65 plants out of 1000units and Multan plant is one of them. The last function of maintenance is performed in down season of November, December or January by shutting down the plant for 15 to 30 days depending on the situation. According to production department, current capacity is sufficient to meet the increasing demand by 2009 but after that there will be a need for expansion.

Recommendation We recommend this flowchart to be use by coca cola company in their near future.

PURCHASING CYCLE

It is issued for the purchase of any thing, which is already not available in the store. So first of all, we see the information from the production schedule to know how much the materials for the production needed. Than we make the purchase requirement, it is sent to purchase department. Purchase Department will have to receive three or four quotations from various vendors according to rates and quality offered and will be select one vendor which rates & quality is suitable. After this it will be made comparative statement for further process. But PR must be approved by :  Department in charge that is in need.  Accounts Manager.  TGM. After that, we will communicate to the supplier to get the info update and purchase the product. After purchase, goods are sent to store and GRN (Goods Received Note) is issued that is also authorized by : · Store In charge.

· Department in charge that is in need. Recommendation We recommend this flowchart to be use by coca cola company in their near future.

PACKAGE & SHIPMENT CYCLE

In this cycle our job is to pack and send the product to the customer. There are two place that will send the finished goods to be pack, we get it from manufacturing floor directly after the production job complete and inventory floor that also has the products. And both of the place will give the shipment notice than the package and shipment process can be start. After the process is finish than we can make delivery and invoice notice as the requirement for the further process which is deliver the products that has been packed to the customer.

Recommendation We recommend this flowchart to be use by coca cola company in their near future.

PAYROLL CYCLE

Payroll cycle systems are separate in many companies because integration was generally not feasible using early data processing technology. Also, different events generate data and two different professions were interested in using the data. As a result, many companies (and their employees) became accustomed to having payroll data processed by the accounting function and personnel data processed by the human relations function. Now that modern information technology makes integration more feasible, employees in some companies are still likely to resist suggestions for change because they are comfortable with the old way of doing things. In addition, employees within the accounting and personnel functions probably feel some degree of "ownership" of "their" data, and this is taken away when control of these data is transferred to a centralized data base function.

The most important tasks performed in the HRM/payroll cycle are: – – – – – –

Recruiting and hiring new employees Training Job assignment Compensation (payroll) Performance evaluation Discharge of employees (voluntarily or involuntarily)

PAYROLL CYCLE ACTIVITIES The five basic activities in the payroll cycle: 1. Update payroll master data 2. Validate time and attendance data 3. Prepare payroll 4. Disburse payroll 5. Disburse taxes and miscellaneous deductions UPDATE PAYROLL MASTER FILE  The HRM department provides information on new hires, terminations, changes in pay rates, and changes in discretionary withholdings.  Appropriate edit checks, such as validity checks on employee number and reasonableness tests are applied to all change transactions.  Changes must be entered in a timely manner and reflected in the next pay period.  Records of terminated employees should not be deleted immediately as some yearend reports (e.g., W-2s) require data on compensation for all employees during the year.  The payroll department also receives notification of changes in tax rates and other payroll deductions from government agencies, insurers, unions, etc.  These changes occur periodically. VALIDATE TIME AND ATTENDANCE DATA     

Some employees are paid on an hourly basis. Some employees earn a fixed salary, e.g., managers and professional staff. Sales staff are often paid on a straight commission or base salary plus commission. Increasingly, laborers may be paid partly on productivity. Some management and employees may receive stock to motivate them to cut costs and improve service. PREPARE PAYROLL   

The employee’s department provides data about hours worked. A supervisor confirms the data. Pay rate information is obtained from the payroll master file.

DISBURSE PAYROLL Most employees are paid either by: – Check – Direct deposit

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In some industries, such as construction, cash payments may still be made, but does not provide good documentation

DISBURSE PAYROLL TAXES AND MISCELLANEOUS DEDUCTIONS The employer pays some payroll taxes and employee benefits directly – The employer withholds federal and state taxes from employee paycheck, along with Medicare tax, and the employee’s share of Social Security. – May also withhold voluntary deductions such as union dues, United Way contributions, credit union savings, retirement contributions, etc. In addition, the employer pays: – A matching amount of Social Security – Federal and state unemployment taxes – The employer share of health, disability, and life insurance premiums, as well as pension contributions Some companies offer flexible benefit plans, sometimes called cafeteria-style benefit plans. – These plans offer a menu of options. The company must periodically prepare checks or EFT to pay tax and other liabilities. Recommendation

We recommend this data flow diagram to be use by coca cola company in their near future.

FINANCIAL REPORTING CYCLE

This cycle starts with a business event. Bookkeepers analyze the transaction and record it in the general journal with a journal entry. The debits and credits from the journal are then posted to the general ledger where an unadjusted trial balance can be prepared. After accountants and management analyze the balances on the unadjusted trial balance, they can then make end of period adjustments like depreciation expense and expense accruals. These adjusted journal entries are posted to the trial balance turning it into an adjusted trial balance.

Now that all the end of the year adjustments are made and the adjusted trial balance matches the subsidiary accounts, financial statements can be prepared. After financial statements are published and released to the public, the company can close its books for the period. Closing entries are made and posted to the post closing trial balance. At the start of the next accounting period, occasionally reversing journal entries are made to cancel out the accrual entries made in the previous period. After the reversing entries are posted, the accounting cycle starts all over again with the occurrence of a new business transaction.

CONCLUSION Coca-cola company is the biggest beverages company in the world, they reach their position because they have a good system in the company,one of the systems is accounting information system. A well-designed AIS gives a business a consistent way to view and analyze financial information and has three basic function to the company. 

Collect and Store Data

One function of an accounting information system is to efficiently and effectively collect and store data about business activities and transactions. The system must capture transaction data on source documents, record transaction data in journals to present a chronological record of transactions, and post data from journals to ledgers that sort the data by account type. 

Provide Information

The second function of an accounting information system is to provide information useful for making decisions. This information usually involves reports in the form of financial statements and managerial reports. 

Provide Controls

The third function of an accounting information system is to incorporate controls to ensure the accurate recording and processing of data. The system must make certain that the information that comes out of the system is reliable, ensure that business activities are efficient and in line with management's objectives and keep business assets safe. So it is very important to a company if they want to have a good company to design the accounting information system well.

REFFERENCES http://www.ehow.com/list_6402203_basic-functions-accounting-informationsystem.html#ixzz33eRkojbS http://www.coca-colacompany.com/careers/student-zone

http://id.scribd.com/doc/26929961/Accounting-Information-System