E Business and Accounting Lecture Notes

4.5 E-BUSINESS AND ACCOUNTING

UNIT 1. e-BUSINESS 10 Hours
Introduction, E-Commerce definition, History of E-commerce, types of E-Commerce B to B
etc. Comparison of traditional commerce and e-commerce. E-Commerce business models
major B to B, B to C model, Consumer-to-Consumer (C2C), Consumer-to- Business (C2B)
model, Peer to-Peer (P2P) model emerging trends. Advantages/ Disadvantages of e-commerce,
web auctions, virtual communities, portals, e-business revenue models.

UNIT 2. Hardware and Software for E-Business 05 Hours
Web server hardware and software software for web servers, Website and internet utility
programs, Web server hardware, web hosting choices electronic commerce software
shopping cart .

Unit 3: Getting started with Tally 05 Hours
What is Tally? Using Tally Software: introduction and installation, Required Hardware,
Preparation for installation of tally software, installation. Items on Tally screen: Menu options,
creating a New Company, Basic Currency information, New Company, Other information,
Company features and inventory features.

Unit 4: Configuring Tally 10 Hours
General, Number symbols, accts/inv info menu, voucher entry, invoice/orders entry and printing,
security issue. Working in Tally: Making Ledger Accounts, writing voucher, voucher entry,
making different types of voucher, correcting sundry debtors and sundry creditors accounts,
preparation of Trail Balance, Accounts books, Cash Book, Bank Books, Ledger Accounts, Group
Summary, Sales Register and Purchase Register, Journal Register, Statement of Accounts, &
Balance Sheet.

Unit 5: Reports in Tally: 10 Hours
Output reports, basic features of displaying reports, printing reports, other printing options,
display account bookstand statements, viewing cash/bank books, configure balance sheet,
E Business and Accounting Lecture Notes

columnar balance sheet, show fortnightly balance sheet, integrate accounts with inventory,
display profit and loss account.

REFERENCE BOOKS
1. Kalakota Ravi and A. B. Whinston : Frontiers of Electronic Commerce, Addison Wesley
2. Watson R T : Electronic Commerce the strategic perspective. The Dryden press
3. Agarwala K.N and Deeksha Ararwala: Business on the Net Whats and Hows of E-Commerce
4. Agarwala K. N. and Deeksha Ararwala : Business on the Net Bridge to the online store front,
Macmillan, New Delhi.
5. Srivatsava: E.R.P, I.K. International Publishers
6. Diwan, Prag and Sunil Sharma, Electronic Commerce A manager guide to Ebusiness, Vanity
Books International, Delhi
7. Tally for Enterprise Solutions
8. C.S.V Murthy- E Commerce, HPH
9. P. Diwan / S. Sharma E Commerce
http://www.tutorialspoint.com/e_commerce/index.htm














E Business and Accounting Lecture Notes


UNIT 1
E-BUSINESS
Internet
The Internet is a global system of interconnected computer networks that use the standard
Internet protocol suite (TCP/IP) to serve billions of users worldwide. It is a network of
networks that consists of millions of private, public, academic, business, and government
networks, of local to global scope, that are linked by a broad array of electronic, wireless and
optical networking technologies.

E Business:
E Business is commonly referred as Electronic business or an internet business. It refers to
buying and selling of goods and services through internet. It involves the use of information and
communication technologies to facilitate and support processes and activities of business.

E commerce
Electronic commerce, commonly known as e-commerce, ecommerce, eCommerce or e-comm,
refers to the buying and selling of products or services over electronic systems such as
the Internet and other computer networks. Electronic commerce is generally considered to be the
sales aspect of e-business. It also consists of the exchange of data to facilitate the financing and
payment aspects of business transactions.

History of E-Commerce
Development of EDI:
Point and Click Browser:
Development of DSL:
Napster, online application:
Development of E-Commerce:



E Business and Accounting Lecture Notes

Types of E-Commerce

B2B:
B2B stands for Business to Business. Business to business refers to business that is conducted
between companies, rather than between a company and individual consumers. It consists of
largest form of Ecommerce. B2B e-commerce is simply defined as e-commerce between
companies. This is the type of e-commerce that deals with relationships between and among
businesses. It involves the use of web-based technologies to conduct business between two or
more companies. Its scope includes not only buying and selling but also services, fulfilling the
needs of customers and collaborating with business partners.

In a B2B transaction, the interaction is between businesses. For example, a website that is
catching for the steel industry might have facility for buyers and sellers to list their requirements
and post their products. It helps them in quickly closing the transactions and the buyer can get
quality, material and can choose from different suppliers. It facilitates access to the ordering
process to only those with whom a concern has a commercial relationship.

This model defines that Buyer and seller are two different entities. It is similar to
manufacturer issuing goods to the retailer or wholesaler. Example, Dell deals computers and
other associated accessories online but it is does not make up all those products. So, in
govern to deal those products, first step is to purchases them from unlike businesses i.e. the
producers of those products. It is one of the cost effective way to sell out product throughout
the world

Benefits:
Encourage your businesses online
Products import and export
Determine buyers and suppliers
Position trade guides


E Business and Accounting Lecture Notes

B2C:
B2C stands for Business to Consumer as the name suggests, it is the model taking businesses and
consumers interaction. Online business sells to individuals. The basic concept of this model is to
sell the product online to the consumers. It is for the customers to buy stores from the web.

B2c is the indirect trade between the company and consumers. It provides direct selling through
online. For example: if you want to sell goods and services to customer so that anybody can
purchase any products directly from suppliers website.

Directly interact with the customers is the main difference with other business model. As B2B it
manages directly relationship with consumers, B2C supply chains normally deal with business
that are related to the customer. B2C e-commerce involves selling of goods and services to
consumers or end users. It allows them to browse the product catalogue, select products or
services and complete the order online.
In a B2C transaction, the interaction is between a consumer and the preferred business. For
example, the most popular site is amazon.com, which is the first online bookseller which has
proved a potential competitor to the traditional bricks and mortar booksellers such as Barrens
and Noble.
B2C is the most popular form of e-commerce, wherein the individuals are directly involved in B2C
e-commerce, and businesses use the internet for offering their products or services 24 hours a day
through global access. The sites Amazon.com and Rediff are among these. These websites spell
goods directly to consumers over the Internet. The two way accessibility feature of the internet
enables operating companies to ascertain consumer preferences and buying trends directly.
C2C:
C2C stands for Consumer to Consumer. The interaction is between consumer to consumer.
It helps the online dealing of goods or services among people. Though there is no major parties
needed but the parties will not fulfill the transactions without the program which is supplied by
the online market dealer such as eBay.
E Business and Accounting Lecture Notes

For example, in sites like e-Buy Bid or Buy.com, Baazi.com which are auction sites, one can
virtually sell and buy any goods (either used or new ones).

P2P:
It is a discipline that deal itself which assists people to instantly shares related computer files and
computer sources without having to interact with central web server. If you are going to
implement this model, both sides demand to install the expected software so that they could able
to convey on the mutual platform. This kind of e-commerce has very low revenue propagation as
from the starting it has been tended to the release of use due to which it sometimes caught
involved in cyber laws.

G2G:
Government-to-Government (abbreviated G2G) is the online non-commercial interaction
between Government organisations, departments, and authorities and other Government
organisations, departments, and authorities. Its use is common in the UK, along withG2C, the
online non-commercial interaction of local and central Government and private individuals,
and G2B the online non-commercial interaction of local and central Government and the
commercial business sector.

G2B:
Government-to-Business (abbreviated G2B) is the online non-commercial interaction between
local and central government and the commercial business sector, rather than private individuals
(G2C), with the purpose of providing businesses information and advice on e-business 'best
practices'.

C2B:
A consumer posts his project with a set budget online and within hours companies review the
consumer's requirements and bid on the project. The consumer reviews the bids and selects the
company that will complete the project. Elance empowers consumers around the world by
providing the meeting ground and platform for such transactions. C2B is a rather peculiar
Internet phenomenon.
E Business and Accounting Lecture Notes


An example of C2B model of e-commerce is the site Price line.Com, which allows prospective
airline travellers, tourists in need of hotel reservations etc. to visit its websites and indicate their
preferred price for travel between any two cities. If an airline is willing to issue a ticket on the
customers offered price, the consumer can then travel to the mentioned destination at his terms.

TRADITIONAL COMMERCE VS E-COMMERCE
Some major comparisons between the traditional commerce methods and modern E-Commerce
are listed below:
Basis Traditional Commerce E-Commerce
Cost
Cost is greater due to taxes,
advertisement and employees.
Average cost is much lower than
traditional type.

Market
Product market is limited because of
geo-graphical constraints.
Product market is across the world
because of non-physical aspects.

Advertisement
It requires product advertisement on
various mediums.
Developers of the websites also
makes adds on domains.
Time
It requires more time to go outside, to
choose, compare and evaluate product.
It takes less time to choose and
make comparison between several
products.
Accessibility
Less accessible due to time or geo-
graphical constraints.
Products can be accessed at any
time and from almost anywhere.
Reliability
People trust it more because of physical
transactions.
Due to lake of awareness this is
less popular among people.
Support
Customers support centers support their
customers.
No physical support centers
available.
Feedback
Feedback from customers takes a lot of
time.
Feedback is immediate by certain
website features.
Interactivity
Fewer customers can be interacting with
at a time because of less physical
limitations.
Websites are especially designed
for multi-users.
Strategy It is difficult to establish and maintain
standard practices in traditional
commerce.
A uniform strategy can be easily
established and maintain in e-
commerce.
Information
Sharing
Heavy dependency on information
exchange from person to person.
Information sharing is made easy
via electronic communication
channels making little dependency
on person to person information
exchange.
E Business and Accounting Lecture Notes


Benefits of E-Commerce

Benefits to Organizations
The benefits to organizations are as follows:
Electronic commerce expands the market place to national and international market
with minimal capital outlay; a company can easily and quickly locate more customers, the
best suppliers, and the most suitable business partners worldwide.
Electronic commerce decreases the cost of creating, processing, distributing, storing, and
retrieving paper-based information. For example, by introducing an electronic procurement
system, companies can cut the purchasing administrative costs by as much as 85 percent.
Ability for creating highly specialized businesses. For example, dog toys which can be
purchased only in pet shops or department and discounts stores in the physical world are sold
now in a specialized www.dogtoys.com (also see www.cattoys.com).
Electronic commerce allows reduced inventories and overhead by facilitating pull type
supply chain management. In a pull-type system the process starts from customer orders and
uses just-in-time manufacturing.
The pull-type processing enables expensive customization of products and services which
provides competitive advantage to its implementers.
Electronic commerce reduces the time between the outlay of capital and the receipt of
products and services.
Electronic commerce initiates business processes reengineering projects by changing
processes, productivity of salespeople, knowledge workers, and administrators can increase
by 100 percent or more.
Electronic commerce lowers telecommunication cost the internet is much cheaper than
value added networks.
Other benefits include improved image, improved customer service, new found business
partners, simplified processes, compressed cycle and delivery time, increased productivity,
eliminating paper, expediting access to information, reduced transportation costs, and
increased flexibility.

E Business and Accounting Lecture Notes

Benefits to Consumers
The benefits of E-Commerce to consumers are as follows:
Electronic commerce enables customers to shop or do other transactions 24 hours a day,
all year round, from almost any location.
Electronic commerce provides customer with more choices; they can select from many
vendors and from many more products.
Electronic commerce frequently provides customers with less expensive products and
services by allowing them to shop in many places and conduct quick comparisons.
In some cases, especially with digitized products, E-Commerce allows quick delivery.
Customers can receive relevant and detailed information in seconds, rather than days or
weeks.
Electronic commerce makes it possible to participate in virtual auctions.
Electronic commerce allows customers to interact with other customers in electronic
communities and exchange ideas as well as compare experiences.
E-commerce facilitates competition, which results in substantial discounts.

Benefits to Society
The benefits of E-Commerce to society are as follows:
Electronic commerce enables more individuals to work at home and to do less traveling for
shopping, resulting in less traffic on the roads and lower air pollution.
Electronic commerce allows some merchandise to be sold at lowest prices, so less affluent
people can buy more and increase their standard of living.
Electronic commerce enables people in third world countries and rural areas to enjoy
products and services that otherwise are not available to them.
Electronic commerce facilitates delivery of public services, such as health care, education,
and distribution of government social services at a reduced cost and/or improved quality.
Health care services, e.g., can reach patients in rural areas.

Disadvantages of E-commerce:

E Business and Accounting Lecture Notes

Purchase to Delivery when making a purchase at a brick and mortar business, you get the
product when you pay for it. On the web, there may be a time lag from purchase to actually
being able to consume. The consumer will have to wait for delivery of physical goods.
Inability to Feel the Physical it is nearly impossible to sell things like furniture and tires
online. Furniture is something people like to sit on and know the feel. Tires need to be
installed once purchased. The old tires also need to be disposed of. In both instances, there is
a need for real actions to fulfill the reason for the purchase. Thats why things like food,
jewelry, antiques etc. can never turn to E-commerce.
Trouble recruiting and retaining employees the company needs well-expert and skilled
staff to keep up and create the ecommerce facilities of the company. Many companies favor to
outsource their improvement and programming tasks to decrease labor costs.
Consumers feel less confident with their credit card numbers most of the consumers are
still not confident in providing their credit card numbers for making payments on the website
while shopping on the Internet.
Not every company can take the benefit some of the small companies may not be able to
take the benefit of E-commerce for example the lack of expertise and lack of technology. The
legal environment in which E-commerce is conducted is full of unclear and conflicting laws.
It should be noted that mostly these disadvantages stem from the newness and rapidly growth
of the technology.

Web Auctions:
A web auction is an auction which is held over internet. It is also called as online auction. It is a
place where people can go to buy or sell goods or services online for a small fee.
Eg: www.ebay.com, www.ubid.com, etc

Types of online auctions

E Business and Accounting Lecture Notes

English auctions
English auctions are where bids are announced by either an auctioneer or by the bidders and
winners pay what they bid to receive the object. English auctions are claimed to be the most
common form of third-party on-line auction format used and is deemed to appear the most
simplistic of all the forms. The winner is the highest bidder and the price is the highest bid.

The popularity of the English auction is due to the fact that it uses a mechanism that people
find familiar and intuitive and therefore reduces transaction costs. It also transcends the
boundaries of a traditional English auction where physical presence is required by the bidders,
making it increasingly popular even though there is a susceptibility to various forms of
cheating.

Dutch auctions
Dutch auctions are the reverse of English auctions whereby the price begins high and is
systematically lowered until a buyer accepts the price. However, with actual on-line Dutch
auctions where the price is descending, it was found that auctions have on average a 30%
higher ending price than first-price auctions with speculation pointing to bidder impatience or
the effect of endogenous entry on the Dutch auction.

First-price sealed-bid
First-price sealed-bid auctions are when a single bid is made by all bidding parties and the
single highest bidder wins, and pays what they bid. The main difference between this
and English auctions is that bids are not openly viewable or announced as opposed to the
competitive nature which is generated by public bids.

Vickrey auction
A Vickrey auction, sometimes known as a second-price sealed-bid auction. However, the
highest bidder and winner will only pay what the second highest bidder had bid. The Vickrey
auction is suggested to prevent the incentive for buyers to bid strategically, due to the fact it
requires them to speak the truth by giving their true value of the item.

E Business and Accounting Lecture Notes

Reverse auction
Reverse auctions are where the roles of buyer and seller are reversed. They do not follow the
typical auction format in that the buyer can see all the offers and may choose which they
would prefer. Reverse auctions are used predominantly in a business context for procurement.
The term reverse auction is often confused with unique bid auctions, which are more akin to
traditional auctions as there is only one seller and multiple buyers. However, they follow a
similar price reduction concept except the lowest unique bid always wins, and each bid is
confidential.

Shill Bidding
Shill bidding is the act of bidding on your own auction against other bidders in order to raise
the price at which your item will eventually sell. It is a violation of both eBay rules and
federal law.

Virtual Communities
A virtual community is a social network of individuals who interact through specific social
media, potentially crossing geographical and political boundaries in order to pursue mutual
interests or goals.

Types of Virtual Communities

Internet message boards:
An Internet forum, or message board, is an online discussion site where people can hold
conversations in the form of posted messages. They discuss thoughts or ideas on various topics.
A user will start a discussion by making a post on a thread. Other users who choose to respond
can follow the discussion by adding their own posts to that thread.

Online chat rooms:
A designated area or forum on the World Wide Web that allows users to communicate with each
other through instant messaging. Text is instantly displayed in the chat room's
E Business and Accounting Lecture Notes

conversation log after a user hits enter or send. Other users included in the chat session
are able to see what another user types.

Virtual Worlds:
A virtual world is a computer-based simulated environment. The term has become largely
synonymous with interactive 3D virtual environments, where the users take the form
of avatars visible to others.

These avatars can be textual, two or three graphical representations,
or live video avatars with auditory and touch sensations.

Social Networking sites:
A social networking service is a platform to build social networks or social relations among
people who, for example, share interests, activities, backgrounds or real-life connections. Social
networking is web-based services that allow individuals to create a public profile, to create a list
of users with whom to share connection, and view and cross the connections within the system.

Web Portals
A web portal is most often one specially-designed Web page at a website which brings
information together from diverse sources in a uniform way.

Types of Web portals

Vertical Portals:
vertical portal (sometimes called a vortal) is a Web site that provides a gateway or portal to
information related to a particular industry. Vortals typically provide news, research and
statistics, discussions, newsletters, online tools, and many other services that educate users about
a specific industry.

Horizontal Portals:
These are web portals which focus on a wide array of interests and topics. They focus on general
audience.

E Business and Accounting Lecture Notes

Corporate portals:
A Corporate Portal is basically a secured website used by employees, manufacturers, alumni and
even customers. The portal is the perfect starting point for everyday tasks that usually would
consist of using many different types and sources of information and tools.

E business Revenue models
It describes how the company will earn revenue, generate profits and produce a better return on
invested capital.

Different E business revenue models

Advertising revenue model
Subscription revenue model
Transaction fee revenue model
Sales revenue model
Affiliate revenue model