Transactional and Financial Management Information System

for

Grafitux

In Partial Fulfilment

Of the requirements of ITE 267

IT Concepts and Systems Analysis and Design Development

Lugod, Rhedeline M.

Lopez, Stephanie D.

Fernandez, Joanne A.

Bote, Maria Camille R.

Mrs. Jeremy Jane Teaňo

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TABLE OF CONTENTS

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LIST OF FIGURES

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LIST OF TABLES

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 CHAPTER 1 INTRODUCTION

1.1 Background of the study

Grafitux is a sole proprietorship type of business that

produces customized trophies, plaque cards, name tags, sash,

key chains, invitations, standees and other party needs. It is

a customer friendly hub which you can freely choose and design

your classified items. It is located at #041 Brgy. Fatima,

Burgos Street, Cabanatuan City near Lazaro Francisco

Integrated School in front of Ilagan Funeral Services. It is

located to the place where customers can easily recognize

them. There is a hard catch in dealing with customers due to

many existing competitors. Having a good customer service,

they tend to patronize products of Grafitux and became known

to other business like Payawal, Graphicab, etc. Grafitux

became the supplier of several businesses around the province

because of a good quality of products. Aside from that the

price which they have agreed upon a certain product is

adequate and reasonable. Overall, Grafitux has shown a great

satisfaction to their customers. But behind those positive

features that the people can see, Grafitux is dealing with

some problems.

The processing of orders from customers is scaled based

on the number of units to be produced per order. The pricing

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agreement for orders relies on agreement of the customer and

the business entity. Regarding financial information, there is

no formal system used. There is no proper recording of

transactions that the entity encounters daily. Due to lack of

financial information, the business cannot recognize if it

suffer from gains or losses. They do not have knowledge on

preparation of financial statements which will help them to

determine their expenses and income. There is a hard time for

them if the operations of the business have been profitable or

not. The business only records transactions whenever they can.

They also use a First in, First out basis for orders, but due

to inconsistency, there are problems in allocating time

settling. As a whole, the business has no formal accounting.

For the improvement of the business’ encoding of

financial data, the proponents are proposing a study on how

the can effectively determine income and expenses and proper

adaptation in preparation of financial statements. In the

proposed system, the daily transactions will be encoded in a

user-friendly input system. The accounts affected will

automatically add or subtract based on the transaction. The

system has a security function so that only business owner and

the manager can access the system and maintain data records.

The system ensures the preciseness of data because of the

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system’s accurate functions. The determination of total income

and expenses is on a monthly basis.

1.2 Statement of the Problem

Due to lack of formal system in recording financial

information, the business is unable to determine the cost of

resources and how the return on investment is being applied to

operations. There is inefficiency in allocating funds for

future operations. The business has no formal accounting in

all transactions that the business encounters.

1.2.1 General Problem

 No source of financial data that will be used for

different financial purposes.

 Manual recording of transactions is not equitable

to the entity because of lack of knowledge in the

significance of having a financial management of

information system.

1.2.2 Specific Problem

 It cannot determine if their operations have been

profitable or not.

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  No enough data on how the business incurred expenses

for its operations.

 No formal system of information that deals on how

the income covers up the expenditures.

 Inadequacy to set a target profit and budgets to be

allocated for monthly transactions.

1.3 Objectives of the Study

This study aims to:

 To develop a system that will enable the business to

determine their income and expenses.

Transactional and financial management

information system will enable the business

owner to determine Grafitux’ profitable operations.

 To improve proper management of financial

information.

This system will help the users to properly

consolidate the business financial data

regarding expenses for raw materials, packaging and

etc.

 To avoid improper usage of profit.

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 The system will help the owner to minimize

excessive expenses for operations. The system will

contribute to the maximization of profits.

 To have an accessible information regarding Return

on Investment

The study will enable the owner to determine if

there is return on investment that will be an

addition to the business equity.

 To adapt a formal system in preparation of financial

statements.

This study aims the business to have a formal

preparation of financial statements that will

help them to adapt an accounting system.

1.4 Scope and Limitations

Scope

This system includes an encoding system for everyday

transactions. It will automatically add and deduct accounts

based on every transaction. It includes a function where

you can input the accounts affected. This system will have

security function so that only business owner and the

manager can access the system and maintain data records.

The proposed system consolidates the data automatically for

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 every transaction. It ensures the preciseness of data

because of the system’s accurate functions. The

determination of total income and expenses is on a monthly

basis.

Limitations

Purchase orders and requisitions are not covered by the

system. The determination of daily income and expenses

cannot be made at any point of time.

1.5 Significance of the study

This system will enable the users to prevent misuse

of profits generated to unimportant use. It will develop

the financial system to have a proper recording of daily

transactions that will lead to an efficient flow of

financial resoucers.

1. To Grafitux

 The system will help the users to determine the

generated income and incurred expenses during

operations.

 The system will contribute to a formal process

encoding financial data

 The system will provide ease in gathering data from

the inventories and sales

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  The business will benefit since the return on

investment will be determined.

CHAPTER 2

REVIEW OF RELATED STUDIES

2.1 Related Literature

Financial Management Information Systems (FMIS)

Financial Management Information Systems (FMIS) support the

automation and integration of public financial management

processes including budget formulation, execution (e.g.

commitment control, cash/debt management, treasury

operations), accounting, and reporting. FMIS solutions can

significantly improve the efficiency and equity of government

operations, and offer a great potential for increasing

participation, transparency and accountability. The World Bank

is a leading provider of financing and technical assistance

for FMIS development.

(http://www.worldbank.org/en/topic/governance/brief/financial-

management-information-systems-fmis)

Since 1984, the World Bank has nanced 87 Financial Management

Information System (FMIS) projects in 51 countries, totaling

over US $2.2 billion, of which US $938 million was for FMIS-

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related ICT solutions.1 This study presents the World Bank’s

experience with these investment operations, including

substantial ICT components, in order to share the achievements

and challenges observed, and provide guidance for improving

the performance of future projects. Building on the existing

FMIS literature and new data available, this study is

structured according to four overarching questions:2 What

historical patterns emerge from World Bank– nanced

Treasury/FMIS projects? This includes an analysis of project

scope, cost, duration, design, objectives, and ICT solutions,

among other aspects. How have such projects performed

according to various criteria? What are the key factors that

contribute to the success and failure of projects? What have

we learned that could be useful for future projects? The

ndings of this study are primarily based on the 2010 FMIS

Database, which includes 55 closed and 32 active Treasury/FMIS

(T/F) projects implemented between 1984 and 2010 (7 pipeline

projects are also analyzed in some sections).3 The data were

gathered primarily from internal World Bank documents and

sources: individual project Implementation Completion Reports

(ICRs), Project Appraisal Documents (PADs), and the

Independent Evaluation Group (IEG) reports, and were

complemented by interviews with project leaders and public

sector/informatics specialists. The Database contains a rich

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set of operational data and performance ratings for the bene t

of those involved in the implementation of such projects, as

well as client countries. The Latin America and Caribbean

region of the World Bank stands out with the largest number of

completed (25) and active (4) projects. The Africa region

follows with 13 completed and 12 active projects. The majority

of these completed projects are comprehensive FMIS solutions

(32) or an expansion of such systems (13). The approach

followed by World Bank teams in the preparation of completed

and active projects is also analyzed by determining the degree

of attention to key preparation activities. These aspects were

selected in line with the FMIS Design and Implementation

Methodology presented in this study to ensure consistency in

comparison. In addition to the dataset, a number of case

studies are provided to highlight the design complexities and

the important nuances regarding the success and failure of

projects. Country cases, rather than individual projects, were

selected to illustrate the integrated and sequential nature of

multiple projects with large investments in ICT over many

years. Cases from Mongolia, Turkey, Albania, Guatemala, and

Pakistan are included. 18750_FinancialWP11.indd xiii 4/8/11

12:32 PM xiv Executive Summary FMIS project performance is

analyzed from various angles. The performance ratings in the

ICRs indicate that the majority of 55 completed projects were

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“satisfactory” along most dimensions of performance (67% of

outcome, 87% of sustainability, 56% of development impact, 61%

of Bank performance, and 59% of Borrower performance ratings

were satisfactory or above).4 This pattern changes slightly

with the IEG reviews, where nearly 64% of the projects

received a downgrading of ICR ratings from “satisfactory” to

“moderately satisfactory.” On the other hand, among 55

completed projects, 49 systems (89%) are operational (20

Treasury Systems + 29 FMIS solutions) mainly to support

countrywide operations (27 fully functional and 22 pilot

systems for one or more ministries), which suggests that, from

the perspective of obtaining results and sustainability, many

of these projects achieved their technical and operational

targets. There were some significant delays, but mostly within

the project budget. Comparisons to similar applications in the

private sector are also provided to highlight parallel

performance patterns. Building from a previously prepared

draFMIS report in 2003 (Dorotinsky and Cho), this study

reviews a broader set of projects and documents to analyse the

performance and outputs of FMIS projects, with an in-depth

analysis of the success and failure factors (the previous dra

FMIS report focused on 31 projects from 24 countries, whereas

the current report covers 94 projects from 51 countries).

Based on the findings of the current study, the interventions

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of the World Bank in the design and implementation of FMIS

solutions have been reasonably successful in most countries.

Findings The design and implementation of effective FMIS

solutions is challenging and requires the development of

country specific solutions to meet a number of functional and

technical requirements associated with the Public Financial

Management (PFM) agenda. Based on the experiences of the last

25 years in World Bank funded FMIS projects, a number of

useful conclusions can be drawn: The political commitment and

ownership of the borrower manner. Success depends on adequate

preparation. FMIS priorities and sequencing should be

addressed carefully. A focus on developing internal client

capacity early in the process is crucial. FMIS implementation

is complex enough to deserve a dedicated project. The type of

FMIS solution influences implementation. The presence of an

ICT expert in the World Bank Team is important. The total

number and complexity of procurement packages influence

project duration. FMIS projects disburse late due to large

ICT contracts, completed at later stages. ICT related risks

need to be clearly identified during project preparation. FMIS

projects in which the preconditions for reforms were assessed

properly and a time-bound action plan was developed with

realistic sequencing of reform activities tend to produce more

effective solutions in relatively shorter time. Success also

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depends on adequate preparation before the approval of the

project (realistic functional and technical requirements,

cost/time estimates, and procurement/disbursement plans). An

estimation of the cost of FMIS ICT solutions needs to be

performed carefully during project preparation based on a

detailed assessment of key “design parameters”

18750_FinancialWP11.indd xiv 4/8/11 12:32 PM Executive Summary

xv (users, nodes, server performance benchmarks, network

connectivity, etc.) and basic “system requirements” (FMIS

application so ware functionality, workload estimates, data

storage and transaction processing needs, etc.). In the

absence of such design parameters and system requirements, it

is not possible to have a realistic cost estimate during

project preparation. This has lead to the acceptance of

relatively large margins of error for FMIS ICT solutions,

resulting in ICT costs much higher than market rates due to

this initial uncertainty. Therefore, initial cost estimates

should be verified based on the actual cost of similar

solutions in other projects, using the FMIS Database and other

sources to reduce the risk of cost overruns or the

misappropriation of funds. Comprehensive FMIS projects take a

minimum of 6–7 years to complete (including the project

design, procurement, development of information systems, and

capacity building) and countries typically undergo at least

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one election cycle within this period. Elections may have a

significant impact on such reform projects due to the changes

in key management positions and priorities. Therefore, the

continuity of the initial commitment of leaders is crucial to

ensure the introduction of necessary changes in business

processes and behaviors/mindsets within the project timeframe.

Frequent changes in World Bank teams should also be avoided to

ensure the consistency and continuity in advisory support and

progress monitoring during project implementation. The key

elements of an FMIS enabling environment are referred to as

“FMIS prerequisites.” These prerequisites should be

substantially completed before the contract signature with ICT

solution provider(s) in order to reduce potential

complications during system development and rollout. These

elements are categorized in three groups: Functional Aspects

Improvement of budget classification Development of a unified

chart of accounts, integrated with budget classification.

Improvement of treasury single-account operations Development

of commitment control and monitoring mechanisms Establishment

of cash management functions Technical Aspects Establishment

of a secure countrywide communication network Preparation of

system/data centers Human Resources Presence of a core team

of ICT specialists within PFM organizations In practice,

country context will influence the degree to which these

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prerequisites should be met ex-ante. However, all of these

prerequisites should be considered before any FMIS ICT

implementation to minimize the risks of cost overruns, delays,

and failure in meeting the design requirements and reform

objectives.

2.2 Related Studies

Title: Automated Financial Management Information System for

Navy Field Activity Comptrollers

Author: Shaun K Taylor Lieutenant Commander, Supply Corps,

United States Navy B.S., University of Idaho

Date Published: March 1990

The focus of this thesis is to review, and determine the

development of, currently installed automated financial

management information systems at Navy field activity

comptroller departments that operate under the Navy's Resource

Management System. Based upon the findings, develop a guide

for use by comptroller departments in the development of an

automated financial management information system. The

resulting guide will be included in the Practical

Comptrollership Course and Financial Management in the Armed

Forces Course Textbook, offered by the Navy Postgraduate

School in Monterey, California. (http://passthrough.fw-

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notify.net/download/943200/http://www.dtic.mil/dtic/tr/fulltex

t/u2/a226365.pdf)

Title: Introducing Financial Management Information Systems in

Developing Countries

Author: Jack Diamond and Pokar Khemani

Date Published: October 2005

In the past decade, developing countries (DCs) have been

encouraged to reform their public expenditure management

systems and have increasingly embarked on major projects to

computerize their government operations. Most popular among

these have been projects to computerize government accounting

and payment operations, by introducing government financial

management information systems (FMISs). This paper

investigates the reason for almost universal failure to

implement and sustain FMISs in DCs. It starts with a review of

the “received wisdom” in implementing these projects, and then

analyzes problems in its application in the DC context to

identify key factors to explain why FMIS projects have been so

problematic. Based on the identified negative factors,

suggestions for addressing them are offered in the hope of

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improving success rates.

(https://www.imf.org/external/pubs/ft/wp/2005/wp05196.pdf)

Title: Integrated Financial Management Information System

(IFMIS) and Credit Scoring in Cooperative Societies: A Survey

of Deposit Taking Saccos in Nyeri County, Kenya

Author: John Kinyua Wangari and Dr. Jagongo Ambrose

Date Published: December, 2015

Financial management information systems are not a new

phenomenon. On the contrary, the recording of financial

information is the oldest known form of record keeping, dating

back thousands of years. Yet financial information has long

presented problems, particularly since the invention of money.

Governments in developing countries are increasingly exploring

methods and systems to modernize and improve public financial

management. In Kenya, majority of SACCOs are faced by several

obstacles in their managerial systems due to poor

implementation of Integrated Financial Information Systems

(IFIS) in their institutions. From recent studies, it is

revealed that most of the SACCOs in Nyeri County including

their branches are using traditional and old way in doing

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daily banking activities and also most of their systems and

computers are old and without advanced software and new

computer applications. The purpose of the study was to

determine the effect of integrated financial management

information system on credit scoring among SACCOS in Nyeri.

The study adopted a descriptive survey research. The

population for this study comprised 30 respondents who

included the manager and the head of IT department in each of

the 15 deposit taking SACCOs in Nyeri County. Since the

population is not large, the study adopted a census approach

by including all the 30 respondents in the sample. Data

involved primary data and secondary data which were collected

by use of questionnaires that were self-administered. Data

were analyzed using descriptive analysis by use of Statistical

Package for Social Sciences (SPSS V 21.0). In addition,

multiple regressions were used to measure the strength of the

relationship between the dependent and independent variables.

Frequency tables and graphs were used to present the data for

easy comparison. This study found that internal control

mechanism facilitated by IFMIS affects credit scoring among

SACCOs in Nyeri to a great extent. The study further found

that organizational structure and resources affect credit

scoring among SACCOs in Nyeri to a great extent. From the

findings, the study concludes that internal control mechanism

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facilitated by IFMIS affects credit scoring among SACCOs in

Nyeri. The study also concludes that information processing,

information gathering, timeliness of information, verification

of the accuracy and completeness of transactions and

transparency of information affect the credit scoring among

SACCOs in Nyeri County. The study further concludes that

formalization, centralization, hierarchical arrangement of

lines of authority and number of hierarchical levels affect

the credit scoring of SACCOs in Nyeri. The study recommends

that the SACCOs should ensure that the information flow is

transparent and effective. This will help enhance confidence

and credibility of the operations of the SACCOs. Also the

SACCOs will be able to monitor the information of clients and

avoid falling into bad debts. The study also recommends that

SACCOs should ensure they put in place a proper strategy-

structure alignment. This is because changes in the

competitive environment require adjustments to the

organizational structure. In addition, the SACCOs should

realize that laxity in the realignment has a negative impact

on financial performance.

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2.3 Conceptual Framework

PROCESS OUTPUT

INPUT 1. Development of the  Transactiona

system. l and
 Searching a. Planning. Financial
entity b. Analysis Management
 Interview c. Design Information
preparation d. Encoding System for
e. Testing Grafitux.
f. Implementati
on
g. Maintenance
2. Assessment of the
system
a. Functionalit
y
b. Reliability
c. Efficiency
d. Security
e. Adequacy
f. Appropriaten
ess

Figure 1

CHAPTER 3

TECHNICAL BACKGROUND

3.1. How project will work?

The system performs an encoding of every day transactions

that will automatically add, or deduct accounts. It includes a
function where you can input the accounts affected. The

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proposed system will have a security function so that the
business owner and manager have the access to the system. The
system automatically consolidates data for the preparation of
Balance sheets and Income statements. The Balance sheet
accounts will determine the entity’s availability of
resources. The income statement determines the income and
expenses that dictates profitable operations.

3.2 Technical Feasibility

3.2.1 Software Requirements

Below are the software needed for a successful system:

 Windows 10 Operating System

 M SQL data provider.
 M SQL server (data platform)

3.2.2 Hardware Requirements

The proposed system needs to provide a new
computer unit specially used for the project. The
existing computer of the business is specifically used
for designing the products, so a new computer input is
required for the use of the authorized personnel who will
handle the system. (Acer Aspire One 14 Z1-401-C9JN)

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3.3. Data Flow Diagram

Customer
Order

1.0

Receive Data

Input data

Data
Consolidation

2.0

Create Financial
Statements

Figure 3

Income
Balance sheet
Statement

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Flowchart
Customer
Order

Receive Daily
Transaction

Input
Transaction

Data
Consolidation

Are the Data properly

No
Consolidated?

Yes

Income Balance sheet

Figure 4 Statement

End

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 CHAPTER 4

METHODOLOGY

4.1. Environment Locale

The business is located at Barangay Fatima, in

front of Ilagan Funeral Services. The system will be set at
the place of business. Since the resident place of the
business is located at the address stated above, the computer
set and printer will be set there to perform its operation and
tasks.

4.2. Population of the Study

The proposed system can be a great help to the

users of information particularly to the owner and to the
manager of the business. Through the functionalities of the
system, it can provide a lot of information that will be
beneficial to the determination of income and planning for
future budgets. Through the use of it, it can provide
projected forecasting for the profitability of the business.

The system which the business proposed may be

beneficial to those business who made a great influence to the
business. Thus, as they reviewed the system of the business
they will recognized if that certain business is having their
good performance. They will be able to know if it is
profitable or not. If they’re having enough resources in
producing their orders. If they choose the right business in

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making their orders. In short, if the business has a good
performance there’s a possibility that more client will come.
Because in using the proposed system, they will know the
progress of their business.

4.2.1. Organizational Chart

REY ANTHONY JAVATE

OWNER

GINA JAVATE
MANAGER

ARLENE LOPEZ
LAYOUT ARTIST

ROSVE RUMA
STAFF RHODERICK LOPEZ
STAFF

4.3. Economic Feasibility

Based on benchmarking, as we interview the owner in which is

on the same kind of business that the Grafitux have, we
discovered that Grafitux and those business (Payawal,
Graphicab and etc.) is using the same kind of recording their
transactions. They’re only using a logbook or record book in
recording their daily transaction which they use in
determining the progress of their business. So, if the
proposed system for Grafitux will be accomplished then

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probably there will be a great result in determining the
progress of their business. Unlike in record book which
they’re using before because there’s a tendency that there are
some transactions that will be omitted.

The proposed system will bring a great impact or the

determination of the business’ profitability. Since the other
entities in line of Grafitux has no existing information
system, the business can operate in an efficient manner where
it can easily access financial information.

4.3.1. Hardware Cost

Unit Cost

Acer Aspire One 14 Z1-401-C9JN P14,990

Dell Latitude D630 P4,990

Total P19,980

4.3.2. Software Cost

System Software Cost

My SQL enterprise edition P24,000

(Annual subscription)

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 4.3.3. Developmental Cost

Professional Fees P5,000

Technical Fees P2,000

Other Expenses* P1,000

Total P8,000

*miscellaneous expenses

4.4. Cost and Benefit of the Project

Manual Recording Transactional and

Financial Management
Information System
Income NA* P325,000

Expenses NA* P200,000

Net Profit NA* P125,000

*income is not exactly determined due to

omissions

4.5. Gantt Chart

Week 1 Week 2 Week 3 Week 4 Week 5

Planning

Analysis

Design

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PLANNING:

 Searching entity
 Interview preparation

ANALYSIS:

 Interview
 Brainstorming
 Analysis of solutions of problems

DESIGN:

 Determining features of the system

 Creating functions of the system

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CHAPTER 5

SUMMARY

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 Curriculum Vitae

PERSONAL INFORMATION:

NAME: Rhedeline M. Lugod

BIRTHDAY: June 7, 1999

AGE: 17

RELIGION: Roman Catholic

FATHER: Rodelio B. Lugod

MOTHER: Rebecca M. Lugod (deceased)

ADDRESS: San Josef Sur, Cabanatuan City

EDUCATIONAL BACKGROUND:

ELEMENTARY

SCHOOL: San Josef Elementary School

ADDRESS: San Josef Norte, Cabanatuan City

YEAR: 2006-2011

SECONDARY

SCHOOL: Nueva Ecija High School

ADDRESS: Burgos Ave, Cabanatuan City

YEAR: 2011-2015

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 Curriculum Vitae

PERSONAL INFORMATION:

NAME: Stephanie D. Lopez

BIRTHDAY: October 01,1998

AGE: 18

RELIGION: Catholic

MOTHER: Arlene Lopez

FATHER: Rhoderick Lopez

ADDRESS: #10 Block 8 Caridad Village Cabanatuan City

EDUCATIONAL BACKGROUND:

PRIMARY

SCHOOL: JP Melencio Memorial Elementary School

ADDRESS: Dicarma, Cabanatuan City

YEAR: 2006-2011

SECONDARY

SCHOOL: Nueva Ecija High School

ADDRESS: Burgos Ave, Cabanatuan City

YEAR: 2011-2015

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 Curriculum Vitae

PERSONAL INFORMATION:

NAME: Joanne A. Fernandez

BIRTHDAY: July 20, 1999

AGE: 17

RELIGION: Roman Catholic

FATHER: Arnaldo G. Fernandez

MOTHER: Auricel A. Fernandez

ADDRESS: #529 Diversion Road Maharlika Highway,Cabanatuan

City

EDUCATIONAL BACKGROUND:

ELEMENTARY

SCHOOL: Cabanatuan East Central School

ADDRESS: Cabanatuan City

YEAR: 2006-2011

SECONDARY

SCHOOL: Nueva Ecija High School

ADDRESS: Burgos Ave, Cabanatuan City

YEAR: 2011-2015

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