Riordan Manufacturing – Accounting Cycle Description
1329 words 6 pagesRiordan Manufacturing – Accounting Cycle Description
Introduction Riordan Manufacturing, Inc. is an industry leader in the field of plastic injection molding. Using cutting edge art design capabilities, this Fortune 1000 Enterprise Company maintains facilities in San Jose, California, Albany, Georgia, Pontiac, Michigan and Hangzhou, China, and has annual earnings of $46 million. A company does not attain and maintain this type of success by accident. Part of Riordan’s success is due to its conversion accounting cycle. This paper will initially identify the five accounting cycles and explain how Riordan uses the conversion accounting cycle. Next, the strengths and weaknesses of the internal controls related to the conversion cycle …show more content…
Controls such as “scorecards”, post project reviews, auditing, and an inventory management and control process (Apollo Group, 2006).
The strength of having these processes in place is that there are checks and balances that keep track of everything from the amount of materials delivered to each person involved with every step until the finished product is delivered to the customer. Another strong point is the “score cards”. These score cards involve everyone and clearly lay out the goals for each person along with charts to show how the goals are progressing. The weakness to having these processes in place is that there are so many steps and so many people involved that if one person makes a mistake it will start a chain reaction that could have catastrophic consequences.
Integration of the Cycle
To integrate the production cycle into an enterprise wide accounting information system it would be necessary to implement an enterprise resource planning system (ERP). ERP is one of the new technologies that has influenced the accounting information system (infor, 2006). ERP systems integrate all data and processes of an organization into one application. A typical ERP system uses multiple components of computer software and hardware to achieve the integration. Among other things, ERP software combines the data of formerly separate applications, which has become helpful in the