Aldi is the third largest supermarket stores chains in Australia after Woolworths and Coles Supermarkets. It has been operating its businesses in Australian since 2001 and currently it has more than 480 stores in different Australian markets including the regions at NSW, ACT, VIC, QLD, SA, and WA states of Australia. The company is aimed at achieving the high customer acquisition and retention with the high brand awareness and loyalty for building confidence and trust of the customers into Aldi branded retailing items through offering the high quality and value-added products at the lowest possible prices (Fitzpatrick, 2015).
Aldi has matrix organizational structure with different strategic business units and divisions that are categorized on the basis of the corporate functions such as sales and marketing, Finance, HRM, R&D, strategic planning, accounting and bookkeeping, and supply chain function that relate to each other for the attainment of the common goals and strategic objectives. The organizational structure of Aldi is hierarchical type with the downward ordering, linear chain of command and authorities, centralized control on the decision-making and business operations. The board or senior management of Aldi is responsible for the corporate governance, strategic decision-making, financial and investment decisions, store opening, and developing strategy plans and strategic statements (vision, mission, values, goals, and objectives). The board or managerial staffs of its head office or main headquarter have own control on the functioning, business operations, and store governance of its all Aldi stores in Australia (Aldi Australia, 2015). At Aldi stores, it has store manager, operational and sales staffs, and labors. The store manager is responsible for the overall functioning, processing, customer service operations, and workforce management of its store.
Aldi is the third largest retailing firm in the Australian retail industry that offers a range of retailing foods and grocery products for serving the high-quality and value-added products to the customers through its stores. Aldi has been facing the complex operational problems due to its unstructured operations and policies. The firm is facing problem in managing the store operations, such as day-to-day customer transactions, presentation of the financial statements and accounting reports, and fraudulent practices by service staffs because of the lack of the professionalized and standardized accounting bookkeeping and information system. Some of its stores are facing operational problems because of inefficient and inexperienced operational staffs causing for misappropriate presentation of the financial statements and commercial transactions (Australian Food News, 2015).
There may also operational problems in other Aldi stores because of poor information system management and lack of knowledge management practices and informational standards. The store manager or representative or service staff of some its stores are sending inaccurate reports or statements to the senior management. There has been some problem because of not employing the right employees at right job posts that has been causing for failing to perform their tasks, activities as well as poor customer service operations. The auditing or accounting team has also been failing in forecasting of the actual customer needs and demand, economic situations, and competitor analysis causing for unexpected sales performance of the company in the Australian retailing market.
The information system management through the use of the commercial accounting software may be used by Aldi Australia as a system acquisition method for controlling and managing both internal and external operations of Aldi Stores through the regular information flow. The accounting information software package will be effective for Aldi stores in managing the day-to-day internal business operations, all commercial transactions and financial statement, taxation consultation, auditing report, and bank reconciliation statement. The accounting information system assists the internal store operations of Aldi by supporting in business intelligence, project planning, product demonstration, supply chain management functions, staffing management and workforce planning, and customer transactions and service delivery (Slide Share, 2015). For this, Aldi contacts with top accounting software package, such as XERO for purchasing and installing this on its internal business system for providing the best solution to support the internal business operations, such as financial statements, accounting reports, ratio analysis and sales record, managing inventory and stocks of goods through getting regular industry updates, market update data, customer transaction, and business related information when required.
Aldi supermarket stores chains is the third largest retailing industry in Australia that offers a wide range of the retailing grocery products, packed foods and beverage items, sanitary articles, and other household goods. In Australia, Aldi Plc. has been operating its businesses in Australia since 2001, currently, Aldi has more than 480 retailing stores (January 2017) in different parts of Australia Including NSW, QSL, VIC, and ACT. In the Australian markets, Aldi has five distribution centers including Prestons and Minchinbury (NSW), Derrimut and Dandenong (VIC), and Stayton (QLD). Aldi Australia is a subsidiary of ALDI South Group that offers the retailing grocery and packed food items under its own private label brands (ConceptDraw, 2015).
Aldi procures the fresh fruits, vegetables, and other raw foods from its fixed suppliers. It has good supplier relations with the Australian farmers, and raw foods suppliers to purchase the desired quantity of the raw foods material at negotiated prices. The raw foods are delivered manufacturing units and production plants for producing the high quality of the foods products to its customers. The prepared goods are sent to all five distribution centers of Aldi in Australia, and afterwards, the packed goods are sent to Aldi stores for supplying to the customers.
(Source: Sales flowchart of Aldi Australia stores)
(Source: Aldi stores in Australia)
After getting the customer order from the customers’ visits at Aldi stores or receiving online orders for the selected items of its brand, the order is checked for inspecting the order status, credit or payment details, and corresponding details (for online orders), the item is checked whether in stock or out of stock, then invoice is prepared for shipping the goods as per customer order for delivering the items to the customers and payment is accepted on home delivery as per rules and terms of the company (Chegg Study, 2013). At its Aldi stores, after generating the customer orders and checking the availability of items in stock, the invoice or bill is made and handed to the customers for the demanded items and delivery of the goods is done.
An internal control system is required to prevent and detect frauds in the system, such as asset misappropriation, inaccurate presentation of the financial statement, staff corruption, merchandising and vendors’ fraud, inaccurate estimation of the procured and supplied goods, wrong entry of the customer orders, not billing to the purchased goods, over-priced from the customers than original prices, comparison of the customer order and quantity of goods supplied, and stealing of the store goods. These frauds may be caused due to the inappropriate accounting standards, fraudulent practices by store managers or staff members, computer server or internet connectivity problems, loss of important data or files, wrong entry of the procured or supplied goods, and the lack of internal control system (Advisory HQ, 2015). The internal control system will be required by adopting and facilitating the accounting information standards for having great control on internal operations of Aldi stores in Australia. The internal control system through the accounting standards will assist in controlling all financial statement, bookkeeping, auditing reports, data maintenance and management, setting reconciliation statements, controlling day to day operations, presenting accurate reports to the senior management, and preparing the appropriate planning and policies effectively.
The accounting information system has a long history since after the establishment of the business enterprises. In the mid years of 1950s and 1960s, the enterprises were needed to have a proper information system management for managing the large amount of data and heavy accounts. In the years of 1970s, the business firms used paper form in the form of ledger and journal files for presenting the accounting information and commercial transactions. In 1980s since after the development of the computers by IBM (minicomputers), the enterprises or accountants started electronic form for processing the huge data and managing accounts in the batch mode for gaining the high level of data security and reliability (Cunningham et al. 2014). In 1987, TurboCash Corporation (South Africa) introduced the automated accounting system for managing the financial statement, such as balance sheets, income statement, ratio analysis, and data presentation. In the mid of 1980s and 1990s, the enterprises were used the micro computers for the presentation of data and management of the accounts.
In 1995, Google Docs were introduced for managing accounting and financial statements. The spreadsheets, MS Excel, MS Powerpoint were used by most of the firms for managing accounts and presentation of data and statements. After the years of 2000 since the invention of the cloud computing technologies, different categories of the accounting information software packages were invented and launched for subscribing and installing on the systems of multiple enterprises to support their finance, accounting, and bookkeeping systems (CTI Reviews, 2016). Recon, Intuit QuickBooks, Saasu, FreshBooks, Xero, MYOB, Zoho, SAP ERP, Netsuite, and Microsoft Dynamics C5 are some popular AIS used by small and mid-sized enterprises as well as large business corporations to find the best enterprise solution for supporting their business functions, like auditing, accounting, bookkeeping, taxation, multi-currencies, bank reconciliation settlement, business intelligence, managing account payable and receivables, product demonstration, multi-currency management, workflow management, forecasting, and project planning.
Australian business industry is highly dynamic and vast where the small and mid-sized enterprises as well as large businesses use different accounting software for managing the strategic information system. XERO, MYOB, Intuit QuickBooks, and Recon are top accounting software used by most of the Australian business firms for supporting their accounting, financial, and auditing related activities. Xero and MYOB are accounting software leaders in the Australian Industry used by most of the small and medium enterprises accounting for more than 70% of overall Australian industry. Xero is the accounting software used by most of the customers in Australia with 500,000 users in March, 2017 showing the growth of 54% from March, 2016 (312,000 users in March, 2016) as well as 54% growth compared to March 2015 (203,000 users in 2015). The XERO has 498,000 subscribers in 2016 in Australia and New Zealand with the growth of 68% from its users 341,000 in 2015 (Gelinas, Dull, and Wheeler, 2014).
MYOB is another software package which is ranked second in the Australian accounting software industry with 37% growth (195,000 subscribers) in Australia and New Zealand in 30 June, 2016 from its users 142,000 in April, 2015. Accounting software, Intuit QuickBooks raised its market share with the growth of 61% with 53,000 professional clients or service users in 2016 from 33,000 subscribers in 2015. The market share of Intuit QuickBooks accounting information software will be expected to rise in the coming years because of its growing use by small business firms, accountants, professional service groups, shopkeepers, and accountants,. The accounting software, Recon is based on cloud computing technology having 36000 subscribers or clients globally in 2016 (Hall, 2015).
XERO, MYOB, Intuit QuickBooks, Recon, and Saasu are top most accounting information software packages used by most of the small and medium enterprises, accountants, and big corporations in Australia for supporting the bookkeeping, accounting, finance, insurance, and taxation related activities of the business firms to relate to their business systems. XERO is the market leader with top position in the Australian industry having more than 5,00,000 users currently in the Australian Country. It provides the high enterprise IT solution for the Aldi Australia because of its multiples features, such as multi-currencies, managing account taxable and payable, multi-language support, 24×7 technical support, double-entry, payroll management, Forecasting and risk management, bookkeeping, automated bank reconciliations, double-entry bookkeeping, invoices and billing, standard business reporting, payroll management, and risk assessment (Romney and Steinbart, 2014). MYOB is the accounting software with second ranked position (over 2,80,000 users in march 2017) that provides the best accounting and bookkeeping solution for the mid-sized and large enterprises because of its multi functions and features. The subscription charges of MYOB range between 50 AUD/month and 99 AUD/month on the basis of MYOB version used to support the accounting and bookkeeping activities.
Intuit QuickBooks is the third ranked accounting software for small and medium businesses (approximately 70,000 users in March 2017). It is used at most because of cheap subscription prices (12AUD/month sale price and max of 21AUD/month for premier version) It provides the comprehensive informational features, such as data security, payroll management, encryptions, reconciliation and bills setting to assist the enterprise businesses to track their income, expenses, and profits (Mancini, Vaassen, and Dameri, 2013). Recon is the fourth ranked accounting software based on cloud computing used by the small businesses, accountants, and shopkeepers because of its affordable prices (5AUD/month to 20 AUD/month). It uses POS system (point of sale system) for aligning the sales transactions to the desktop software suite. Saasu is future-based accounting software based on due diligence analysis without extra setup or syncing and supports the CRM, bank reconciliations, e-commerce stores, and e-platforms.
The users or customers of AIS have been facing challenges or problems while using these accounting information software packages. Some accounting software lacks the data security, and not relevance of the AIS with the systems of the enterprises, while other accounting software are ineffective because of the outdated information and lack of accuracy. Some AIS are non-user friendly and creates difficulty in customization. Some AIS are costly because of high subscription for purchasing and installing on the system, some AIS lacks features, such as lack of bank reconciliation statement, inability to provide 24/7 technical support or poor CRM support. Some software lacks compatibility with the systems as well as poor speed of access that create difficulties or challenges for the users while using these AIS packages (Haux, Winter, Ammenwerth, and Brigl, 2013).
It will be effective for the users or customers of the AIS to recruit or employ the specialized and technically feasible team compatible to working on the accounting software with the deeper understanding and knowledge and understanding about these AIS packages. The extra training sessions should be arranged by the enterprises for supporting the accounting team to become capable for working on this. Along with this, the SMEs or professional users as well as accountants should use appropriate accounting software by ensuring the best suitability, compatibility, accuracy, relevancy, and efficiency of the accounting software for supporting the accounting and information system of the firms (Romney, Steinbart, Mula, McNamara, and Tonkin, 2012). Additionally, the users should choose the AIS having more features, such as accuracy, bank reconciliation settlement, 24×7 technical support, managing multiple accounts and multi-currencies, taxation, customer relationship management, accurate presentation of reports, financial statement, ratio analysis, and forecasting features.
References
Advisory HQ (2015). 5 Best Small Accounting Software in Australia. [Online]. Available at: https://www.advisoryhq.com/articles/5-best-small-business-accounting-software-in-australia/. (Accessed: 11 May 2017).
Aldi Australia (2015). Aldi Australia Corporate Governance. [Online]. Available at: https://www.aldisuppliers.com.au/PDF/ALDI-Corporate-Brochure.pdf. (Accessed: 11 May 2017).
Australian Food News (2015). Aldi tries new strategy to grow bigger market share in Australia. [Online]. Available at: https://www.ausfoodnews.com.au/2015/05/20/aldi-tries-new-strategy-to-grow-bigger-market-share-in-australia.html. (Accessed: 11 May 2017).
Chegg Study (2016). Accounting Information system. [Online]. Available at: https://www.chegg.com/homework-help/system-flowchart-manual-sales-procedures-following-describes-chapter-2-problem-11p-solution-9781305465114-exc. (Accessed: 11 May 2017).
ConceptDraw (2015). Sales Process Flowchart. [Online]. Available at: https://www.conceptdraw.com/examples/sales-system-flowchart. (Accessed: 11 May 2017).
Considine, B., Parkes, A., Olesen, K., and Blount, Y. (2012). Accounting Information Systems: Understanding Business Processes. Australia: John Wiley& Sons.
CTI Reviews (2016). Accounting Information Systems: Business, Finance. Australia: Cram 101 Textbook Reviews.
Cunningham, B. et al. (2014). Accounting: Information for Business Decisions PDF. Australia: Cengage Learning.
Fitzpatrick, B. (2015). A review of Aldi’s online marketing strategy. [Online]. Available at: https://www.webprofits.com.au/blog/aldi/. (Accessed: 11 May 2017).
Gelinas, J. U., Dull, B. R., and Wheeler, P. (2014). Accounting Information Systems. USA: Cengage Learning.
Hall, A. J. (2015). Accounting Information Systems. USA: Cengage learning.
Haux, R., Winter, A., Ammenwerth, E., and Brigl, B. (2013). Strategic Information Management in Hospitals: An Introduction to Hospital Information Systems. Australia: Springer Science& Business Media.
Mancini, D., Vaassen, J. H. P., and Dameri, P. R. (2013). Accounting Information Systems for Decision Making. Melbourne: Springer Science& Business Media.
Romney, B. M. and Steinbart, J. P. (2014). Accounting Information Systems. Australia: Pearson Education.
Romney, M., Steinbart, P., Mula, J., McNamara, R., and Tonkin, T. (2012). Accounting Information Systems Australasian Edition. Australia: Pearson Higher Education.
Slide Share (2015). ALDI in Australia: Case Analysis-part 2. [Online]. Available at: https://www.slideshare.net/ChrishanSmith/aldi-in-australia-part-2. (Accessed: 11 May 2017).
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