Background
You met Jill, the owner of Peyton Approved Bakery, a couple of years ago when she first started her
business. You recall how much help she needed with starting her business, organizing her financial
transactions, preparing financial statements for potential stakeholders, and making decisions related to
growth and expansion. Jill has now approached you regarding her desire to expand the business. Since
you have kept Peyton’s books since its inception, you are familiar with her business transactions;
however, you realize that for Jill to grow her business, she must transition from her current manual way
of doing business into a more automated mode of operations.
The first step, you believe, is to automate her accounting information system. Although you are familiar
with Jill’s numbers, you have no idea how her day-to-day operations occur. After looking over her
financial transactions, you understand the business activities that Peyton Approved Bakery is primarily
involved in: sales, accounts receivable, purchasing, inventory, and payroll. To get a better feel for how
Jill actually operates the business, you schedule a meeting with her to discuss how these transactions
occur.
Initial Meeting
During the meeting, you ask Jill to tell you more about her goals for the business. She indicates that she
wants to provide quality treats for pets all over the country at a reasonable price. Jill states that since
her business has grown so quickly, she thinks it is time to expand. She’s sure she can sell her products
online and maybe even open another store in a different location, perhaps another state. You ask Jill to
detail her current processes, and she tells you the following:
BUSINESS ENVIRONMENT
I pride myself in making delicious, freshly baked treats for pets of all kinds. We make everything from
cakes and donuts to cookies and candy! We are truly unique. As you know, I hired two part-time
employees to keep up with the orders. One employee, Pierre, bakes most of the items, and the other
employee, Renee, is my “go-to ga”’! She does everything from taking orders, collecting payments,
ordering supplies, and delivering products to keeping up with the inventory. With your help, I was able
to secure a loan from my bank to help really establish the business; I would like to go back to them for
additional financing. My parents also think that I should expand the business and are willing to invest in
the expansion!
SALES CYCLE
A small percentage or our sales are purchased off the shelf; most of our business is special order. We sell
half of our products through phone orders; the rest of our products are sold to customers who walk into
our shop. Besides pastries, we also sell other related merchandise such as pet party accessories, pet
dishware, pet toys and gifts, and so on. Both Renee and I handle the sales that occur in the shop.
When a customer places an order, we write the order by hand. We jot down the customer’s name and
address, phone number, and the details of the order, including:
The type of pastries
The quantity of each pastry desired
