@ccounting: A Cloud / SaaS Accounting Application

Transcription

1 @ccounting: A Cloud / SaaS Accounting Application Maria Chelmi Dpt. of Accounting, Technological Educational Institute of Piraeus, Egaleo, Greece Tel: , maria.chelmi@gmail.com ABSTRACT In the recent years, the ever growing sector of Informatics provides a diverse range of tools that can be used to create applications that will serve Accountancy. Software-as-a- Service (SaaS) is a new software delivery model that offers the functionality of a service completely deployed in the cloud environment and is characterized by its multi-tenancy architecture. Software applications and solutions that are based on SaaS infrastructure are gaining momentum all over the world and in multiple fields. In this paper, we a web-based SaaS accounting application that is designed to provide the functionality of a traditional ERP system as well as implement advanced auditory functions (cost analysis, fraud detection). We will present the benefits of using SaaS in this business context and discuss the features of the application. KEYWORDS SaaS Application, Accounting Software, Cloud Architecture 1. INTRODUCTION An increasing number of companies today are faced with the challenge to quickly react on changing market circumstances. As most business processes in an organization are supported by ERP systems, these systems must have a flexible and adaptable delivery model to cope with this challenge. Therefore, it is essential to develop new delivery models such as SaaS in cloud computing and service composition in service oriented architecture (SOA) that offer the possibility to rapidly deal with the market conditions [1]. Software-as-a-Service (SaaS) is a delivery mechanism to provide customers with the functionality of an application that is deployed in the cloud environment. Thus, the delivery of software solutions using the (SaaS) model is gaining wide adoption [2]. Customer relationship management (CRM) and enterprise resource planning (ERP) software is the largest market for SaaS. SaaS revenue within this market was forecast to reach 3.8 billion dollars in 2011 [3]. Accounting and bookkeeping are the backbone of every company no matter how large or small. However, it can be very challenging to keep track of all the financial movements even in a small company. The current financial climate makes it very important to be accurate when dealing with company finances. Therefore the functionality of accounting software services (tax & financial reports, payroll processing, accounts payable, transaction entries etc.) is particularly useful. Such services are incorporated in CRM and ERP solutions rendering this type of software

2 invaluable to companies. It is only logical that major shifts in software development paradigms will eventually affect the market of CRM and ERP solutions. This paper presents an Accounting ERP software application as a service on the cloud that aims on coping with the auditory and financial needs of a modern company. In particular, it supports the recording, reporting and analysis of financial data according to the is (i) web-based in order to be easily accessible and not computer platform dependent, is (ii) scalable in order to scale up and down according to the requested usage and is (iii) user-friendly in order to be easily adaptable with minimal cost. Regarding its is based on service oriented architecture (SOA) that uses a cloud infrastructure. This allows a simple integration of heterogeneous applications by implementing web services as interoperable interfaces [4]. The remainder of the paper is structured as follows. Section 2 discusses the advantages of SaaS model in the business context of Accounting. Section 3 presents the related work. In Section 4, the architecture of the application is illustrated. In Section 5, the services / features of our implementation are presented and in Section 6, conclusion as well as future enhancements are proposed. 2. SAAS IN THE CONTEXT OF ACCOUNTING In this section we will discuss the advantages of using an Accounting / ERP SaaS software solution as a customer. The main merits are: Minimal Infrastructure / Cost Reduction: Since the application is hosted by the service provider, investing in expensive infrastructure is no longer needed. The company is not burdened with the cost of the initial investments on hardware, licenses, databases, constant overheads of employing and training IT staff, software and hardware maintenance and upgrades thus allowing itself to gain competitive advantage in the marketplace. Multi-tenancy and Application Customization and Scalability: SaaS multitenant architecture provides the customer with a multitude of options and variations using a single code base [5]. Thus it allows each customer / tenant to have a unique software configuration. It also allows client application access to be scaled up or down immediately so as to meet the current needs of the customer. Multi-tenancy also greatly reduces the operational costs of the service provider. This is due to the facts that (i) hardware and software resources are divided and multiplexed across tenants and (ii) there is only a single version of the application code for all tenants thus simplifying the overall maintenance [6]. Global availability: Web-based applications enable the customer to save his information in the cloud, hence making both the application and its data easily accessible from anywhere. Increased accessibility in business knowledge favours collaborative productivity. In addition, geographically separated teams function efficiently making this notion viable in multinational corporations. Environmental Sustainability: The role of business and accounting in sustainable development and environmental sustainability is implicit in the

3 Fifth Action Programme of the European Commission on the environment [7]. A hidden aspect of this role is the environmental burden produced by the hardware on which accounting and auditory software is executed. The traditional hardware of a company may be quite old and therefore very energy consuming and possibly pollutant. SaaS reduced considerably the company s hardware infrastructure since it takes advantage of cloud computing and storage. This is a more sustainable and more eco-friendly way of running the IT department which involves modern hardware which is less pollutant [8]. As the cloud load balancing algorithms evolve, overall energy consumption will be reduced thus indirectly contributing to the role of accounting in environmental sustainability. It is evident that SaaS has a lot to offer to the field of Accounting and Finances in general. However, there are some security, reliability and manageability issues, especially when many unproven software vendors and service providers are involved. There needs to be extensive search in the planning and selection of processes for using in public and private cloud services. 3. RELATED WORK M. McGlohon et al. [9] developed a graph labelling and risk detection algorithm that could be used as an accounting fraud detection technique. Within the charts of accounts used by the company there is a set of accounts which can be thought of as variables representing the allocation of monetary resources. Business events, such as the purchase of furniture, would result in a transaction that reduces the value of the cash account but increases the value in the fixed asset account by an equivalent amount [9]. Manipulation of records can be found by experts on both the bookkeeping and financial statement level. There are many different fraud schemes [10, 11] for which experts have identified red flags that indicate suspicious behaviour based on domain knowledge [10, 12, 13]. The number of existing SaaS accounting software in Greece is virtually zero. Almost all small and large businesses use the traditional model of having the server and client hardware in the company. SaaS is slowly growing amongst developers in Greece and will most definitely dominate in the following years. SaaS / Cloud accounting and ERP applications are blooming in the USA and continental Europe. The most popular choices are Commence CRM, SalesForce, CLP Suite, Microsoft Dynamics and Aplicor. ARCHITECTURE The designer of a multi-tenant SaaS system needs to be very careful about the way he handles the variability that arises from the different needs of each tenant. There are four levels of SaaS Maturity models, i.e. different ways of implementing multitenancy [14]. We selected the Level 4 model as it is the most scalable, configurable and multi-tenant efficient of the four. A single code based is used and each tenant is provided with a single virtual instance. This assignment is done by the load balancer and is dynamic thus being decided at runtime (Figure 1).

4 Figure 1: Typical SaaS Level 4 deployment model application is structured in a multi-layered architecture (Figure 2). Tenant specific customizations currently affect the levels of business workflows, services and database schemes. The parameters of the customization options of each tenant are stored as metadata in the database. When a user logs in, the application determines which tenant he belongs to and then loads the appropriate metadata and sets the respective access rights. Figure 2: Multi-layered architecture The top level tier is the Graphic User Interface (GUI). It acts as a liaison between the user and application. It was created with PHP, HTML5 and JavaScript so as not to be restricted by proprietary software licences like the.net framework. The next tier consists of the workflows. These are the business processes that run in the background and define the flow of information on each transaction. For example, when goods are sold, there is a monetary flow from the customer to the company but also a flow of goods from the company to the customer that each has to be recorded and processed. On the lower tier, we encounter the various services (web services, database services, system services, etc). All the temporary data that are used by the above layers are stored in data structures in Level 4 (File System). The lowest tier is the database layer. The RDBMS that we use is mysql mostly due to the fact that is a highly configurable open source software.

5 5. AVAILABLE FEATURES In this section we will present the services and features Essentially, it acts as a full ERP software solution. It incorporates (i) finance and accounting services, (ii) customer and supplier management services, (iii) sales services and (iv) various auditory services. 5.1 Accounting Services The main branch of services of every ERP software is the finance and accounting services. The same rule applies as well. These services are the following: Bookkeeping compliant with the Greek GAAP: This is the most basic service. It interacts will all the other accounting services so as to provide them with essential information. In addition we provide automated routines for the most common type of financial transactions (sales, supplies, revenues, expenses, payroll, etc). This allows the user to enter only the necessary information of the transaction and the routine registers all the appropriate accounting records updating the system. Controller Services: These include fixed asset management, preparation of financial statements according to the International Financial Reporting Standards (IFRS), revenues earned and expenses incurred management and payroll reports. CFO Services: They currently comprise of cash flow management and key performance indicators analysis. 5.2 Customer and Supplier Management Services These services provide a model for managing the company s interactions with customers, clients, and sales prospects. It is crucial to have detailed information on the transactions between the company and its customers and clients for successful management. These services interact with the bookkeeping service so as to record the necessary amount of information and with the CFO services so as to analyze this data. 5.3 Sales Services This type of services keeps the sales information of the company up to date. On every sales transaction, they update the inventory data and customers accounts. Since sales are the most common type of transaction we decided to have dedicated services to accommodate its management. 5.4 Various Auditory Services A particular highlight of the application is that it has the ability to perform some advanced auditory services like cost analysis and fraud detection. Cost analysis is a powerful tool for a financial analyst. It can provide information that may greatly

6 reduce the expenses of the company. Our implementation calculates the operational expenses and spreads them across the products or services that the company offers and tries to evaluate the cost flow within the business. The most advanced feature is the fraud detection. We attempted an implementation of the red flag detection algorithm introduced by M. McGlohon et al. that can provide the financial analyst with some indications of malpractice within the company. 6. CONCLUSION AND FUTURE WORK In this paper the features and advantages of the SaaS delivery model have been illustrated and an has been presented, which is a new webbased accounting software solution based on the SaaS architecture. We feel that the application still has a great margin for improvement. Our main focus is to improve the following aspects: (i) Extend the configurability of the multitenant system also to the GUI as well as developing front-ends for mobile devices (ios, Android and Windows 8) and (ii) refine the existing services and incorporate more financial services into the application. There is a lot of research on the topic of fraud detection and forensic accounting investigation that has produced ways of automatic detections of problems. We would like to add these features in a future release. We feel has a lot of potential and we hope for a full scale deployment and release in the near future. REFERENCES [1] Wei, Y. and Blake, M. B., Service-Oriented Computing and Cloud Computing: challenges and Opportunities, IEEE Internet Computing, vol. 14, Issue. 6, 72-75, [2] Saugatuck Research, Enterprises Ready or Not: SaaS Enters Mainstream, July [3] Barret L., "SaaS Market Growing by Leaps and Bounds: Gartner", Datamation, QuinStreet Inc, [4] Cao, B., Li, B. and Xia, Q A service-oriented Qos-Assured and Multi-Agent cloud computing architecture. Lect. Notes Comp. Sci (2009), [5] Chong F., Carraro G. and Wolter R., Multi-Tenant Data Architecture. Microsoft Corporation, [6] Truyen E., Cardozo N., Walraven S., Vallejos J., Günther S., D'Hondt T., Joosen W., Context-oriented programming for customizable SaaS applications, In Proceedings of the 27th Annual ACM Symposium on Applied Computing (SAC '12). ACM, New York, NY, USA, [7] Fifth Action Programme of the European Commission, Towards Sustainability, European Commission, [8] S. Ricciardi, D. Careglio, G. Santos-Boada, J. Sole-Pareta, U. Fiore, F. Palmieri, Saving Energy in Data Center Infrastructures, Proceedings of the 2011 First International Conference on Data Compression, Communications and Processing, Pages , 2011 [9] M. McGlohon, S. Bay, M. G. Anderle, D. M. Steier, C. Faloutsos, SNARE: a link analytic system for graph labeling and risk detection. Proceedings of the 15th ACM SIGKDD international conference on Knowledge discovery and data mining (KDD '09). ACM, New York, NY, USA, [10] W. Golden, S. Skalak, and M. Clayton. A Guide to Forensic Accounting Investigation, John Wiley & Sons, Hoboken, N.J., [11] J. Wells. Corporate Fraud Handbook: Prevention and Detection. John Wiley & Sons, Hoboken, N.J., [12] H. Schilit. Financial Shenanigans: How to Detect Accounting Gimmicks and Fraud in Financial Reports. McGraw- Hill, [13] C. W. Mulford and E. E. Comiskey. The Financial Numbers Game: Detecting Creative Accounting Practices. John Wiley & Sons, Hoboken, N.J., [14] Kwok, T., Nguyen, T., and Lam, L., A Software as a Service With Multi-tenancy Support for Electronic Contract Management Application, Proc. IEEE Conference on Services Computing, July 2008.