Porter's Value Chain and the REA Analysis as an Accounting Information System

Term Paper (Advanced seminar) , 2011 , 22 Pages , Grade: 1,7

Business economics - Accounting and Taxes

Rachel Branckowitz and Rick Young are two dentists who are merging their offices together. They are faced with finding an Accounting Information System that fulfils their requirements e.g. the extended number of clients. The merging and system implementation is due in six month.
Therefore Porter's Value Chain will be derived as a solution after having explained the Value Chain concept. From there on a REA Analysis will be developed, which will be explained in detail.

The Case used in this paper "Designing and Implementing an Information System for the Dental Office of Branckowitz & Young" by Alex Nikitkov and Barbara Sainty can be found in "ACCOUNTING PERSPECTIVES Instructional Cases Teaching Notes and Supplementary Materials" Volume 7, Issue 4.

Table of Contents

• Introduction
• Value System Model
  • Theory of Porter's Value Chain Model
  • Porter's Value Chain applied on Branckowitz & Young
• Business processes
  • Theory of Transaction Cycles
  • Transaction Cycles applied on Branckowitz & Young
    • The Revenue Cycle at Branckowitz & Young
    • The Expenditure Cycle at Branckowitz & Young
    • The Production/Service Cycle at Branckowitz & Young
    • The Payroll Cycle at Branckowitz & Young
• The REA Analysis
  • Theory of the REA Analysis
  • The REA Analysis at Branckowitz & Young
  • Key Attributes
    • Key Attributes for the Revenue Cycle
    • Key Attributes for the Expenditure Cycle
    • Key Attributes for the Production/Service Cycle
• References

Objectives and Key Themes

This document aims to analyze the business processes of a dental practice formed by the merger of two separate offices. The analysis will use Porter's Value Chain model to assess the value system and the REA Analysis to understand the transaction cycles involved in the dental practice.

• The application of Porter's Value Chain model to a dental practice
• The implementation of a REA Analysis to understand the key business processes in the dental practice
• The identification of key attributes within the REA framework for different transaction cycles
• The practical application of management accounting concepts in a real-world business setting
• The impact of business mergers on management accounting practices

Chapter Summaries

This chapter introduces the case study of Rachel Branckowitz and Rick Young, two dentists merging their practices. The need for a new system to accommodate the increased number of clients is highlighted. The second chapter defines a value system model and introduces the concept of Porter's Value Chain, which maps out the primary and support activities of a business. The chapter explains the use of the value chain model to analyze the company's activities and find sources for its competitive advantage. The third chapter focuses on business processes, introducing the theory of transaction cycles and their application to the case study of Branckowitz & Young. Each of the four main transaction cycles (revenue, expenditure, production/service, and payroll) is discussed in detail. The fourth chapter introduces the REA analysis, a framework for modeling business processes. The theory of the REA analysis is presented, followed by its application to the Branckowitz & Young dental practice. The chapter emphasizes the importance of identifying key attributes for each transaction cycle.

Keywords

This document focuses on the application of management accounting tools, specifically Porter's Value Chain and the REA analysis, to analyze the business processes of a dental practice. The analysis focuses on key themes such as business mergers, transaction cycles, and the identification of key attributes within the REA framework.

• College: Linnaeus University
• Grade: 1,7
• Author: Anna Lena Bischoff (Author)
• Publication Year: 2011
• Pages: 22
• Catalog Number: V168542
• ISBN (eBook): 9783640987399
• ISBN (Book): 9783640987528
• Language: English
• Tags: Porter, Value Chain, Porter's Value Chain, Ressources, Events, Agents, REA, REA Analysis, transaction cycle, transaction cycles, financial cycle, production cycle, expenditure cycle, revenue cycle, payroll cycle, Value systems, Accounting Information System, AIS, Accounting Information Systems, Key Attributes, Key Attribute, Value system model, Branckowitz & Young, dental office, Branckowitz and Young, case study, Designing and Implementing an Information System for the Dental Office of Branckowitz & Young, Alex Nikitkov, Barbara Sainty