LPU-Laguna Journal of Business and Accountancy
Vol. 3 No. 3 October 2020
Utilization of Accounting Information System in Small Medium Enterprises
in line with Food Industry in San Pablo, Laguna
John Andrae Brila, Christopher Dennis Catapang
Bachelor of Science in Accountancy
ABSTRACT
An Accounting Information System (AIS) is by and large a PC based technique for following bookkeeping
action related to data innovation assets. AIS is in charge of the gathering, stockpiling and handling of
monetary and bookkeeping information that is utilized for interior administration basic leadership,
including nonfinancial exchanges that specifically influence the preparing of money related exchanges.
Without a doubt Accounting Information System (AIS) is imperative for all organizations, it is more
critical for medium-sized and little ones which require this data to manage a higher degree of
vulnerability in the aggressive market (Grande, Estebanes, and Colomina 2011).
Keywords: Accounting information system, medium enterprises
INTRODUCTION
Success in the execution of the Accounting Information System (AIS) is critical to businesses. It
is essential to study about the important factors that affect systems usage, and also the connections to
quantifiable business results. As information and communications technologies cover a wide range and
include all the areas in which a firm acts, this research will show that computerized accounting tools are
directly related to the economic and financial results and productivity in small and medium-sized business
organizations (Cramm, 2008).
As information and communications technologies cover a wide range and include all the areas in
which a firm acts, this research will show that computerized accounting tools are directly related to the
economic and financial results and productivity in small and medium-sized business organizations
(Cramm, 2008). This research will also help its readers that are future business employees to understand
how accounting information system today are being utilized to help the business in different kinds of
ways.
All organizations are seeking to increase their profit ability and revenues through the utilization
of available resources and make quick decisions based on correct and accurate information in a timely
manner, which in this matter has increased the importance of accounting information systems (Abdallah
2013). This study is to identify the impact of using accounting information systems on the quality of
financial statements that are submitted to the income tax and sales department in Jordan and whether they
have an impact on decision-making and accelerate the completion of the work of the department.
Conceptual Framework
Figure 1 shows the conceptual framework of the research. This study was to measure the
utilization of accounting information system depending on the demographic profile of the businesses who
belongs to the category of small and medium industry in with food industry in San Pablo, Laguna which
includes business line, number of years in operation, type of business ownership and number of
employees. Next the researchers determines what type of accounting information system are used by the
business. Lastly, the researchers measures the utilization of accounting information system with its
different variables that includes bookkeeping, security, decision making, and compliance for BIR
requirements.
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LPU-Laguna Journal of Business and Accountancy
Vol. 3 No. 3 October 2020
Figure 1. Conceptual Framework of the Study
Objectives of the Study
The overall study is to the know utilization of Accounting Information System towards Small-
Medium enterprises in line with food and beverages in San Pablo City, Laguna.
METHODOLOGY
The researchers used a quntitative design with 43 owners and operators of Accounting
Information Systems as the respondents. The survey questionnaire was used to determine the
demographic profile of the respondents and perception. The questionnaire has four parts. The first part
determines the demographic profile, the second part is to determine the type of accounting information
system being used by the business, the third part determines the utilization of accounting information
system in terms of bookkeeping, security, and decision making, the last part determines how accounting
information system helps the business in its compliance to BIR requirements.
Frequency Distribution and Percentage was used for the researchers to determine the respondents’
demographic profile (food and beverage line, number of employees, type of business ownership, number
of employees, and type of accounting information system being used). Weighted Mean was used to
determine average responses of the respondents of different options and factors under the questionnaire.
Analysis of was used in order to measure more than two means, thus, also used in order to test the
equality of means. This tool was very flexible for it also tested and overall significance of a variable.
RESULTS AND DISCUSSIONS
Table 1 shows the demographic profile of the respondents. Majority of the respondents were a
restaurant (30.2%) while coffee shop came up second (18.6%). The table also shows food kiosk (16.3%)
with bakery and convenience store each have (14%) respectively while catering services got the least
number of respondents (7%). Restaurants have always played an essential role in the business, social,
intellectual and artistic life of a thriving society. The major events of life, personal and professional, are
celebrated in restaurants. Acquaintances become friends around a table in the safe and controlled
environment of a restaurant. (Fieldman, 2015).
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LPU-Laguna Journal of Business and Accountancy
Vol. 3 No. 3 October 2020
Majority of the respondents expressed that have been operating for 1 to 5 years (83.7%) while 5
of the respondents answered that they have been in operation for 6-10 years (11.6%). The table also
shows that only 1 respondent answered that they have been operating for 11 to 15 years and 21 to 25
years (2.3%). The statistics indicate the first four to five years are the "survival years." Each year, one out
of 12 businesses in the United States closes its doors, but this rate is one in six in the first four to five
years (Paul and Sarah Edwards, 2003).
Most of the respondents said that they had sole proprietorship of their business (44.2%. While,
and equal number of 12 respondents per ownership type said that are part of a corporation and that they
are in a partnership (27.9%). Sole proprietor ownership provides a lot of benefits for the sole owner.
Advantages of being a sole proprietor are having a complete control and decision-making power over the
business, sale or transfer can take place at the discretion of the sole proprietor, no corporate tax payments,
minimal legal costs to forming a sole proprietorship, and few formal business requirements (AllBusiness,
2007).
More than half of the respondents said that they have about 5 to 15 employees (86.0%). Five
participants answered that they have 16 to 25 employees (11.6%). While, only 1 participant said that they
have 36 and above number of employees (2.3%). Miscalculating your staffing needs can have a crippling
effect on the growth of your home care business. While your company may be able to carry the weight of
extra employees for a while, over time the company will sink under the unnecessary weight (Marcum,
2016).
Table 1. Demographic profile of respondents
Category Frequency Percent
Business Line
Coffee Shop 8 18.60
Catering Services 3 7.00
Bakery 6 14.00
Restaurant 13 30.2
Convenience Store 6 14.0
Food Kiosk 7 16.30
Years in Operation
1-5 years 36 83.70
6-10 years 5 11.60
11-15 years 1 2.30
21-25 years 1 2.30
Business Ownership
Sole Proprietorship 19 44.20
Corporation 12 27.90
Partnership 12 27.90
Number of Employees
5-15 37 86.00
16-25 5 11.60
36 and above 1 2.30
Type of AIS
Programmed Excel 17 39.50
Xero Software 0 0
Point of Sale 26 60.5
Quickbooks 0 0
SAP Software 0 0
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LPU-Laguna Journal of Business and Accountancy
Vol. 3 No. 3 October 2020
Majority of the respondents or 26 of them in total said that they use Point of Sale as their AIS
(60.5%). While 17 respondents answered that they prefer to use Programmed Excel as their AIS (39.5%).
Generally, SMEs already use the Point of Sales (POS) in the form of a cash register. The cash register is
the most widely used for restaurant payment service as well as the recording of transactions (Lana
Sularto, Wardoyo, Tristyanti Yunitasari, 2014). Being developed based on Microsoft Excel platform, our
system has a further advantage of being cost-effective (NI Bakti, 2017). As most hospitals and trusts
already possess licenses for Microsoft Office products, this key feature ensures that trust does not have to
purchase and install any additional software in order to have this system running in all their networked
computers. This cost factor may help encourage more departments and trusts to migrate to an electronic-
based system from a paper-based system. All problems will be solved if both the restaurant do the
accounting records by making use of an application program designed specifically for restaurants.
Accounting software that is easy to use, will help in the management of their businesses, the need for
fund management and financial reporting will be easily obtained.
The results in Table 2 showed that the usefulness of AIS in business operations in terms of
decision making is highest when it is used on “planning well ahead of time when it comes to business”
with a mean of 3.36 which means that SMEs find it more useful to plan ahead of time, or make a goal that
the business will rely on as they go about their day. The reliance on “gut feeling” when making decisions
as the lowest mean with 2.65.
The overall results show that businesses prefer to plan ahead and work out the pros and cons
before making a decision and relies less on taking advice from others and relying on “gut feelings” when
they have to make decisions. They also find AIS least useful in terms of decision making with a computed
mean of 2.91.
Table 2. Utilization of AIS in business operations in terms of decision making
Weighted Mean Verbal Interpretation
I plan well ahead of time when it comes to 3.36 Strongly Agree
business.
I find it difficult to think clearly when I have to 2.86 Agree
decide something in a hurry.
I avoid taking advice over decision. 2.65 Agree
I rely on “gut feelings” when I am making 2.63 Agree
decisions.
I work out all the pros and cons before making a 3.07 Agree
decision
Composite Mean 2.91 Agree
Legend: 3.50 – 4.00 = Strongly Agree; 2.50 – 3.49 = Agree; 1.50 – 2.49 = Disagree; 1.00 -1.49 = Strongly Disagree.
Table 3 shows that usefulness of AIS in business operations in terms of bookkeeping is highest
when it is used on the business with a mean of 3.33 which means that SMEs find AIS more useful to with
their businesses. Using AIS as bookkeeping to keep data intact is seen as the lowest with a mean of 3.07.
The overall results show that businesses highly prefer using AIS with their businesses for it is helpful and
more useful but will not highly prefer AIS when bookkeeping to keep data intact. They also find AIS as
moderately useful with a computed mean of 3.18.
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LPU-Laguna Journal of Business and Accountancy
Vol. 3 No. 3 October 2020
Table 3. Utilization of AIS in business operations in terms of bookkeeping
Weighted Mean Verbal Interpretation
Obtaining timely and accurate data from the 3.09 Agree
customers.
The data are intact. 3.07 Agree
AIS keeping up-to-date with industry changes. 3.14 Agree
The system is useful in the business. 3.33 Strongly Agree
The Accounting information system is more 3.26 Strongly Agree
reliable than the manual system.
Composite Mean 3.18 Agree
Legend: 3.50 – 4.00 = Strongly Agree; 2.50 – 3.49 = Agree; 1.50 – 2.49 = Disagree; 1.00 -1.49 = Strongly Disagree.
The results gathered from 43 respondents showed that the usefulness of AIS in business
operations in terms of security is highest when passwords in files or data are used with a mean of 3.51 in
Table 4. This means that SMEs find it more useful to apply passwords to protect their data and keep them
secure. The reliance on restricting the access to computers restricted is seen as the lowest mean with 3.16.
The overall results show that using of passwords on files and data, and keeping backups of files
of the daily operations of the business to be the most useful application of AIS for security of SMEs.
While making computer access restricted and only having operators allowed to use the system to be the
least useful. They also find AIS to be the most useful for security with a computed mean of 3.32.
Table 4. Utilization of AIS in business operations in terms of security
Weighted Mean Verbal Interpretation
Access to computer are restricted. 3.16 Agree
Operators are the only one that who is allowed to 3.19 Agree
use the system.
Use of password in the files or data. 3.51 Strongly Agree
Use of data backup in daily operation of the 3.37 Agree
business.
Unauthorized personnel should be prohibited 3.35 Agree
while conducting the data.
Composite Mean 3.32 Agree
Legend: 3.50 – 4.00 = Strongly Agree; 2.50 – 3.49 = Agree; 1.50 – 2.49 = Disagree; 1.00 -1.49 = Strongly Disagree.
Table 5 shows the usefulness of AIS in business operations in terms of compliance with BIR
requirements. The usefulness is highest when the AIS helps to properly compute the deduction on VAT of
all sales with a mean of 3.33 which means that SMEs find it more helpful to use AIS to automatically
deduct the VAT deductions with all sales to hasten the pace of transactions and lessen human errors. The
use of AIS to help compute the employee contribution for SSS, PhilHealth, and HDMF to be the lowest
with a mean of 3.14.
The overall results show that using of AIS for automatic VAT deduction and recording and
storing of proper data for to be the most useful application of AIS for BIR compliance of SMEs. While
using the AIS to compute for SSS, PhilHealth, and HDMF, and overall usefulness of AIS for BIR
completion to be the least useful. They also find AIS to be the moderately useful for BIR completion with
a computed mean of 3.24.
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LPU-Laguna Journal of Business and Accountancy
Vol. 3 No. 3 October 2020
Table 5. Utilization of AIS in business operations in terms of compliance with BIR requirements
Weighted Mean Verbal Interpretation
The use of AIS helps the business to comply BIR 3.19 Agree
requirements on time.
AIS helps to compute employees contribution to 3.14 Agree
SSS, Philhealth, & HDMF.
The AIS helps to properly compute the deduction 3.33 Agree
on VAT sales.
AIS helps to record and store proper data that can 3.28 Agree
help with its tax compliance.
The AIS can help the business with its 3.26 Agree
transparency with its compliance to BIR
requirements.
Composite Mean 3.24 Agree
Legend: 3.50 – 4.00 = Strongly Agree; 2.50 – 3.49 = Agree; 1.50 – 2.49 = Disagree; 1.00 -1.49 = Strongly Disagree.
Table 6 presents that there is no significant difference in a quantitative characteristics of
utilization of accounting information system in Small-medium Enterprises in terms of bookkeeping,
security, decision making and compliance to BIR compliance since the compute p values are greater than
0.05 level of significance. This implies that quantitative characteristics of utilization of accounting
information system in Small-Medium Enterprises terms of food and beverage line is not affected by
bookkeeping, security, decision making and compliance to BIR compliance.
Table 6. Significant difference on utilization of AIS in terms of food business line
f-value p-value Interpretation
Bookkeeping 0.6812 0.439 Not Significant
Security 0.6952 0.4292 Not Significant
Decision Making 0.8292 0.4162 Not Significant
Compliance to BIR
2.5846 0.196 Not Significant
Requirements
It can be noted in Table 7 that there is no significant difference in a quantitative characteristics of
utilization of accounting information system in Small-medium Enterprises in terms of bookkeeping,
security, decision making and compliance to BIR compliance since the compute p values are greater than
0.05 level of significance. This implies that quantitative characteristics of utilization of accounting
information system in Small-Medium Enterprises terms of number of years in operation is not affected by
bookkeeping, security, decision making and compliance to BIR compliance.
Table 7. Significant difference on utilization of AIS in terms of years in operation
f-value p-value Interpretation
Bookkeeping 0.9462 0.554 Not Significant
Security 1.403 0.339 Not Significant
Decision Making 2.6952 0.144 Not Significant
Compliance to BIR
1.5448 0.3628 Not Significant
Requirements
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LPU-Laguna Journal of Business and Accountancy
Vol. 3 No. 3 October 2020
Table 8 shows that there is no significant difference in a quantitative characteristics of utilization
of accounting information system in Small-medium Enterprises in terms of bookkeeping, security,
decision making and compliance to BIR compliance since the compute p values are greater than 0.05
level of significance. This implies that quantitative characteristics of utilization of accounting information
system in Small-Medium Enterprises terms of business ownership is not affected by bookkeeping,
security, decision making and compliance to BIR compliance.
Table 8. Significant difference on utilization of AIS in terms of business ownership
f-value p-value Interpretation
Bookkeeping 0.8958 0.3022 Not Significant
Security 0.803 0.3842 Not Significant
Decision Making 0.6256 0.4124 Not Significant
Compliance to BIR
2.1962 0.1418 Not Significant
Requirements
It can be seen from Table 9 that there is no significant difference in a quantitative characteristics
of utilization of accounting information system in Small-medium Enterprises in terms of bookkeeping,
security, decision making and compliance to BIR compliance since the compute p values are greater than
0.05 level of significance. This implies that quantitative characteristics of utilization of accounting
information system in Small-Medium Enterprises terms of number of employees is not affected by
bookkeeping, security, decision making and compliance to BIR compliance.
Table 9. Significant difference on utilization of AIS in terms of business ownership
f-value p-value Interpretation
Bookkeeping 1.2132 0.3204 Not Significant
Security 0.4941 0.5126 Not Significant
Decision Making 0.3322 0.556 Not Significant
Compliance to BIR
1.1514 0.307 Not Significant
Requirements
CONCLUSIONS
Every business has their own daily transactions which leads to the creation and use of AIS to help
them handle the information (Shubair, 2011). Their preferred AIS used in their business was either
programmed excel or point of sale.
The results for the usefulness of AIS in business operations for decision making showed that they
mostly prefer to plan ahead of time when it comes to business matters. Which is actually the main
function of AIS, better decisions are made when accounting information is fully understand (Nicolaou
2009).
When it comes to the usefulness of AIS in business operations for bookkeeping, AIS is mostly
useful for the overall system of the business. The study of Hakim in 2007 investigated the effect of the
usage databases on bookkeeping data systems controlling in the general population division. He meant to
distinguish shortcomings in controlling capacity in the framework investigation organize. He found that
using databases in outlining bookkeeping data frameworks and activities enhances accounting data
frameworks' controlling.
For the usefulness of AIS in business operations for security expressed that the use of passwords
to keep files or data safe is the most commonly used feature for AIS. Accounting Information System is
thus vital to all organizations (Ogah, 2013).
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LPU-Laguna Journal of Business and Accountancy
Vol. 3 No. 3 October 2020
There is significant relationship between AIS and bookkeeping and no significance at all for
decision making and security. In the study of Ogah in 2013, AIS in bookkeeping is a vital tool of
management that provides an orderly method of gathering and organizing information about the various
business transactions so that it may be used as an aid to management in operating the business.
Lastly, the AIS usefulness for business in terms of compliance with BIR requirements proved to
be most helpful for computing for VAT sales deductions. With VAT having different effects on business,
and is especially stronger for SMEs (Anna Azmi, Noor Sharoja Sapiei, Mohd Zulkhairi Mustapha, Mazni
Abdullah, 2016), makes the highest usefulness for AIS to address this for the businesses very competent
and highly complaint with BIR requirements. The use of the AIS system will lessen human error and will
automatically show the deductions whenever a transaction is done, which is beneficial not only for the
business but for also the consumers as well.
Recommendations
The results of this study is highly beneficial to all SMEs and business alike. For these business,
may they study and analyze the purpose of AIS and how they are used to maximize the usage of this
program to help them with decision making, bookkeeping, security, and compliance with BIR
requirements.
For future researchers, may you apply the concept of the study with different variables, instead of SMEs
other enterprise options could be used. May you gather more data in different locations and not only focus
on one city. Also, differentiating the demographic profiles and usefulness of AIS for both urban and rural
areas is possible. Choosing businesses that are not food-based such apparel, beauty products, bags and
shoes, school supplies, etc. could also be a new variable to explore on. Lastly, future researchers may also
include an interview or focus group discussions to get a more comprehensive application of AIS in
different enterprises.
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