Development of a Web-Based Point of Sale System

for Joshua and Caleb General Merchandise

CHAPTER I

INTRODUCTION

Project Context

In the era of technology and with its development, people produce things which

helped them at every stage; people are using computers with the help of software-based

solutions to perform different tasks quicker and easier. The use of these solutions has

benefited everybody in every field of life such as in education, medicine, industry,

airline, weather forecasting and business.

In today’s generation, information technology (IT) is an essential part of every

business. Businesses need to invest in technology to compete. IT is both a cost of doing

business, and an opportunity to do more business (Calvin, 2010).

Every business has to do sales and inventory management, whether on paper, in

spreadsheets or using software. They need to implement some form of inventory control

system to keep an accurate merchandise count, as well as for accounting purposes.

Nowadays, businesses replaced their manual sales and inventory management system

with the automated system because of its many advantages. These advantages provide

timely information, increase productivity and customer satisfaction, which result in a

better business decisions (Weygandt, 2009).

Moreover, inventory software now on the market can monitor changes in unit

costs, calculate when reordering and analyzing inventory levels on an item-by-item basis.

It can even control inventory right at the cash register with point-of-sale (POS) systems.

No matter what type of business, adopting a POS (point of sale) system can turn the

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 Development of a Web-Based Point of Sale System

for Joshua and Caleb General Merchandise

business around by providing an all-in-one solution to a multitude of everyday issues.

POS software records each sale when it happens, so the inventory records are always up-

to-date (Simons, 2011).

Joshua & Caleb General Merchandise is a company having a wide array of

products commonly sold to customers directly on an order basis. They cater to private

entities, government, and walk-in customers. Some of their products that make up much

of their floor space are electronics such as home appliances, computers and cameras;

gadgets like smart phones and tablets; office and party supplies.

The business has five employees including the owner. The manager/owner is in

charge of monitoring the overall operation of the business. The secretary manages

pertinent documents, receives phone calls from clients, makes calls on behalf of the

manager and carries out routine clerical tasks. The supervisor is in-charge in the

procurement of products from suppliers, maintains quality control and ensures that their

products are fulfilling customers’ needs. The accountant performs basic accounting

functions, maintains financial records and prepares reports. The driver is in-charge of

delivering variety of orders to government customers.

At present, Joshua and Caleb General Merchandise is one of the businesses that

utilizes the manual type of processing its transactions. This requires continuous

monitoring to ensure that each transaction is accounted for and that products are

maintained at the appropriate stocking levels.

In the ordinary course of the business, there are two different kinds of transaction:

cash sales and credit sales. Cash sales apply walk-in customers, wherein cash are

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 Development of a Web-Based Point of Sale System

for Joshua and Caleb General Merchandise

exchanged for goods. This creates an inflow of cash or revenue and a corresponding

outflow of product inventory. Another transaction is credit sales, wherein the customers

are divided into two, private and government entities. Credit sales to private entities are

straightforward in its treatment in the book of accounts, the sale just being recorded

taking into consideration the gross and vatable sales, and the accounts receivable from the

customer. Credit sales to government entities are mandated to withhold 5% on VATable

sales upon payment, which is of different computation to the value added tax required by

law to be imposed.

Using a manual POS system relies heavily on the actions of people, which

increases the possibility of human error. One disadvantage of a manual system is that the

likelihood of error increases substantially. Another disadvantage is that it can be

highly labor-intensive to operate. This is mostly the case in Joshua and Caleb Gen.

Merchandise, where customers come in and out every few minutes and orders are usually

in bulk. It can be a difficult task, as one employee may misplace the list of items sold or

forget to write down a sale which is possible due to the jumbling of files and records on a

busy days work while attending to customers and meeting deadlines, too.

It is for these reasons that the researchers were prompted to develop a Web-Based

Point of Sales System that is useful in managing and monitoring the business operation; a

system that is secured, accurate and fast that lessens the manual operation of the business

transactions.

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 Development of a Web-Based Point of Sale System

for Joshua and Caleb General Merchandise

Objectives of the Study

The main objective of this study is to develop a Web-Based Point of Sales System

for Joshua and Caleb General Merchandise.

Specifically, the study aimed to accomplish the following:

1. to identify the existing process of sales system operations in the Joshua

and Caleb General Merchandise;

2. to determine the problems encountered in the existing process of the sales

operations of the Joshua and Caleb General Merchandise;

3. to devise a solution to the problems encountered in the existing process of

sales system operations of Joshua and Caleb General Merchandise;

4. to determine the validity of the proposed system as evaluated by IT

Experts and the acceptance of the end-users through pilot testing.

Scope and Limitations

The study concentrated on the development of a Web-Based Point of Sales

System for Joshua and Caleb General Merchandise.

The system ran on a private network, accessible only to the employees of the

business. The proposed system covered mainly the sales and inventory operation of the

business like monitoring of sales transactions; computing for total sales and taxes;

printing and generating reports for the manager to evaluate the status of the business, as

well as generating sales and charge invoices for customers.

The proposed system did not cover the tracking of order, dealing with damaged

products delivered by suppliers and monitoring of product warranty. Also, the propose

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 Development of a Web-Based Point of Sale System

for Joshua and Caleb General Merchandise

system did not include the generation of official receipts (OR) to customers. All overhead

expenses were not included in the income statement.

Significance of the Study

The system is a web-based application to provide Joshua and Caleb General

Merchandise a better business solution to optimize the recording, monitoring and

accounting of every transaction. The study benefited the following:

Manager/Administrator. The proposed system helped the manager in the overall

sales operation of the business such as viewing sales history and inventory and in adding,

editing or deleting user accounts.

Supervisor. The proposed system helped the supervisor in monitoring all

products available and in deciding when to order new stocks.

Accountant. The proposed system helped the accountant in monitoring sales

ledgers, recording sales transactions and in generating sales/charge invoices and reports

such as sales report, income statement and statistical report.

Secretary. The proposed system helped the secretary in managing customers’

information and pertinent documents like receipts, invoices, sales and inventory ledgers

and reports.

Researchers. The proposed system served as a tool to sharpen the researchers’

knowledge and skills in programming and in developing computerized systems.

The Future Researchers. The study serves as a reference for future researchers

especially for those who will be conducting similar studies and to be able for them to

improve their research and validate the result of this study.

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 Development of a Web-Based Point of Sale System

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Definition of Terms

The following terms are operationally defined to facilitate better understanding of

the study.

Charge Invoice. This term refers to the authorized government document which

serves as a record of sale, printed by the secretary and is given to the customer as a

proof of transaction.

Compensating Value Added Tax (CVAT). This term refers to the five percent

(5%) of the VATable sales of transactions of government’s entities.

Creditable Income Tax (CIT). This term refers to the one percent (1%)

VATable sales from the customers of government entities.

Inventory. This term refers to the itemized lists of all the products that Joshua

and Caleb General Merchandise sells.

Product status. This term refers to the specifying of number or percentage of the

stocked goods of Joshua and Caleb General Merchandise.

Point of sale. This term refers to capturing of data and customer payment

information at a physical location when goods or services are bought and sold in Joshua

and Caleb General Merchandise.

Revenue. This term refers to the total amount received by Joshua & Caleb

General Merchandise for all sold items.

Sales invoice. This term refers to the authorized non-government document

which serves as a record of sale, printed by the secretary and is given to the

customer as a proof of transaction.

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 Development of a Web-Based Point of Sale System

for Joshua and Caleb General Merchandise

Retail price. This term refers to the gross price of products inclusive of VAT

when it sold to the customer of Joshua and Caleb General Merchandise.

Tax withheld. This term refers to the taxes that government entities are required

to withhold on all transactions with Joshua and Caleb General Merchandise that is

subtracted from the sales price.

Transaction. This term is an instance of buying products by a customer and of

acquiring it from suppliers.

Wholesale. This term refers to the sale of goods to customers in large amount.

VATable sales. This term refers to the sales price exclusive of the 12% VAT

used by the accountant for the computation of taxes to be withheld.