By the “Accounting Software” a kind of application or software is understood that can record and process transaction of accounts. This has been done within the functional modules like accounts receivable, payroll, trial balance, accounts payable and general ledger. It has been working as the “Accounting Information System” (Hossack 2015).
“Xero” is the Australian software company that has been developing “cloud based” accounting software. The review on Xero which is Australia based and using the “Accounting Software” packages in Australia has been needed to be done (Review and Krause, 2017).
The study explores the structure, problems acquisition methods of the organization. Flow charts have been developed and control problems are further identified. The development of the software packages with identification of other aspects is done.
According to Ma (2015), one of the biggest players in accounting software in the market of Australia is the Xero. It has taken the “Accounting Software” to the “Cloud Computing”. Xero has got the largest market share of accounting in Australia. It has been offering the efficient “accounting software” for the small to medium sized businesses. It has identified empty spaces in the users of accounting software.
Further Xero has been facing obstacles as its departments were not autonomous units. The accounting departments have been entrusted in gathering, maintaining and processing the accounting books (Review and Krause, 2017). However, the problems with the “accounting software” have been unable to reconcile every accounting report. This has to done from the other departments because of duplication and incompatible formats (Hossack 2015). In this way the reconciliation of the annual accounts has become time-consuming, tedious, inconsistency and errors. The origin of the problems has been the use of accounting software and data redundancy.
Boulianne (2014) claimed that, most likely the approach for system acquisition the given scenario is the commercial software. Xero has been possessing non-unique data requirements. It could be satisfied with the commercial system. It has been fully completed, tested and at last ready for implementation (Xero Accounting Software, 2017). Typically the “commercial systems” has been the general-purpose and customized to specific industries like Xero. The end users would have the practices of standard businesses (Review and Krause, 2017). It would allow the usage of “canned” and “off-the-shelf” structure. It could be employed with no or little alteration.
The “Sales Process Flowchart” has been a significant instrument for business of Xero. It has provided Xero with visualizing and better understanding of the process of sales. It also reveals and displays the highlighted bottlenecks and forecast the quantity of sales. The flowchart has been an ideal way to indicate the in-detailed steps of the decisions, tasks and processes. This help in obtaining the utmost effectiveness and gaining success.
Figure: “Sales procedures of Xero”
Source: (https://www.conceptdraw.com, 2017)
As reviewed by Gögüs and Özer (2014), one of the significant preventative controls has been the breaking-up of duties. It is the distinction of three important functions like the authorization the usage of assets, keeping record of the assets and assets custody.
According to “Association of Certified Fraud Examiners”, Xero has been losing about five percent of its annual revenue to fraud. Hence, it has been crucial for Xero to prevent their information. The detective and preventive internal management should be utilized in their software for accounting. The preventive measures discourage the fraud from happening. The detective controls determine the fraud after the occurrence (Review and Krause, 2017).
In the control problems identified above, it has been difficult to distinguish the three factors. Boulianne (2014) argued that, if properly imposed the differentiation of the duties has made it hard for the fraud to take place. The login credentials could be developed to secure any user from changing or accessing data. The detective controls have been still required to assure that fraud has not taken place. Despite this, the detective and preventive measures in the “accounting software” has not been able to guarantee of the fraud not to occur. Yet this have made extremely difficult for any staff in committing fraud as the appropriate controls are placed properly (Review and Krause, 2017). As fraud occurs, Xero requires forensic accountant in uncovering the wrongdoings.
The small businesses of Australia have been little ahead of their respective counterparts in the other nations regarding the adoption of “accounting software”. As claimed by Schorr et al. 2015 business has been still in dilemma about the safety in cloud based solutions.
Rahman et al. (2015) researched that, Xero has been one of the developing vendors of financial applications as claimed by the latest report of the “International Data Corporation”. They have reported on the market size and its share for the financial payroll with finance of Xero. Despite being the largest growing application of finance, Xero has been also placed as the quickest developing firm in the accounting space of payroll. As the fastest developing firm in the space of accounting payroll the revenue growth of Xero in 2014 has been 74.7% year over year.
As the fastest developing vendors of financial applications the revenue growth of Xero in 2014 has been 80.3% year over year. One of the three standout realities for Xero as disclosed by the IDC report has been the demand of payroll and accounting systems has been rising (Xero Accounting Software, 2017). The market of Xero increased from 17.1 billion dollars to about 18 billion dollars in the year 2014. The second reality showed that the small businesses acting as catalysts for the effective rise of the tools of enterprise-tools has been currently available for Xero. Zero stood at number one position globally for the rise with eighty percent as reported by the Workday (Review and Krause, 2017). With over 540 thousand subscribers at the platform of Xero, there have been over twenty million businesses communicating with Xero. Xero has been on the path towards their mission of million numbers of small businesses thriving over their platform.
Going by the research of Fossella and Kennedy (2014), two of Xero’s greatest rivals have been taking the Rod Drury’ form seriously. They have been predicting hard times in future both for Xero with its investors. The market capitalization of Xero has bewildered the market analysts. Xero’s value has hit five hundred million dollars. It has sailed beyond that comfortably. The numbers of regional revenue of Xero has come out with interesting readings. The revenue from New Zealand has risen about seventy percent in the last comparable period. The revenue from Australia has been however, 2.1 million dollars behind than that of the New Zealand one which is three times higher. The income from the United Kingdom has doubled on the other hand (Xero Accounting Software, 2017). Thus the real competition for Xero has been offshore. Xero was listed at one dollar share in 2007, claiming that it would generate profits as it hits between fifteen thousand to thirty thousand customers. Xero would face the sterner test in the stateside than in its own country with the firms showing competition to Xero. Xero has been getting a huge amount of press due to its market cap. The company has been proud of its 100,000 clients. The hardest client to get has been always the very first one (Review and Krause, 2017). The company would further put “people on the ground”.
The other competitors of the organization like Intuit have no such planning in New Zealand and Australia due to the popularity of Xero. The accounting products of Intuit have blunted its popularity (Xero Accounting Software, 2017). Anyway the market has been too small for Intuit to get worried about. Hence it has not been ignoring Xero. In the fast growing industry the small players has been given attention also. They have been further watched closely. The competitors of Xero have claimed to adopt the ideas that would be legal to try better than Xero. They have also resources in doing that. As researched by Hui and Chang (2016), Xero has obviously did fine jobs in its innovation for some aspects. However, it would be the “time” that should disclose how Xero could keep that up.
It should be kept in mind that business is like a marathon running not any sprint. Generally, there have been expectations regarding the running down of each other by the rival companies. However it has been interesting from the side of Xero who has earned competitive advantages or making of profits from its rival companies. The Reckon and Intuit has been circling others much more solemnly than Xero. This rivalry has been in the class of lower weights (Bu 2013). They have also wanted to keep that away. Xero has been trying to consider them as competitors only and they never wish to watch them evolve so steadily that they could take over current market.
The challenges according to Gögüs and Özer (2014) are:
Lack of security: This is due to the access of information by the foreign parties. The firewall setup in the machines gets screwed up many times.
Weak reporting service: Some of the accounting software has been powerless while helping the users. Users get annoyed with the fact to place data in impossible manner.
Lack of efficiency: The owner of Xero has always wished to have things finished quickly with less time consumption. Some products of the “accounting software” have not been user-friendly. They further lack capabilities, features, compatibility and expend abilities.
Outdated and lacking of accuracy: Some of the software has been outdated. Thus, data corruption has been the serious matter in such cases (Xero Accounting Software, 2017).
Difficulty in customizing and non-user-friendly: The users have been unable to do customization because of some system restrictions.
Expensive and lack of various features: Some software has been expensive and also missing certain features. The customers on the hand demand for the upgraded versions (Schorr et al. 2013).
Features of Bank reconciliation absent: Software like the “wave accounting” does not possess the feature of “bank reconciliation”. This feature has been largely required to keep track during errors.
Poor CRM or the “Customer Relationship Management”: Users have been always seeking high quality in training. This might get sometimes overlooked.
Software compatibility: Users gets frustrated several times as they found their “accounting software” not compatible with the programs.
Lack of 24/7 technical back-up: Customers many times has to wait for the upcoming business day to get their problems of “accounting software” be fixed (Xero Accounting Software, 2017).
Inconvenient technical back-up through phone: In such scenarios users fail to receive clear picture of the happenings and the further activities.
Poor speed to access: As this software has been accessed on Internet, speed might slow down due to distance towards the data centre. This results in the location problem.
The recommendations from Schiff and Szendi (2014) for using the “accounting software packages” are:
Budget estimation: First of all the budget to afford the software should be estimated. Accounting software products has been varying in costs, depending upon the features chosen.
Finding of the reasons: The needs of accounting software depend upon the situation of the business. The scenarios are like, beginning of the business, growth of business, immediate or on-demand access, streamlining the operations, the system turns complicated and comply with every law and regulation (Xero Accounting Software, 2017).
Features the small business requires in the accounting software: There are some of the features that should be found out in the offers provided by accounting software. The offers are basic accounting tasks, automation, quote with estimate creation, tax preparation, multiuser access, payroll processing, mobile access and third-party integration (Review and Krause, 2017).
Conclusion:
Xero has been delivering strong customer growth and revenue in every market. It has been the leading provider of “accounting software” in Australia representing the significant proportion of business in the nation. Both the government and large enterprises has been trying to connect to the platform of Xero. The potential global growth of Xero has attracted large funding from the undertaking capital investors. Xero has created regional management and global executive appointments to run the strategy of growth. Xero has expanded the strategic partnerships in countries outside the Asia-Pacific. It is the first “cloud accounting” solution comprehensively and globally. It has been exceeding the width of functionalities provided by the traditional packaged low business software. The company has shown its capability as an international player in the independent reviews of products. This has been continuing to occur strictly against every competitor.
References:
Boulianne, E., 2014. Impact of accounting software utilization on students’ knowledge acquisition: An important change in accounting education. Journal of Accounting & Organizational Change, 10(1), pp.22-48.
Bu, G., 2013. Development of an Integrated Deterioration Method for Long-Term Bridge Performance Prediction (Doctoral dissertation, Griffith University).
Fossella, G.C. and Kennedy, K.F., Kokopay, Inc., 2014. Electronic Payment System Operative with Existing Accounting Software and Existing Remote Deposit Capture and Mobile RDC Software. U.S. Patent Application 14/211,110.
Gögüs, C.G. and Özer, G., 2014. The Roles of Technology Acceptance Model Antecedents and Switching Cost on Accounting Software Use. Journal of Management Information and Decision Sciences, 17(1), p.1.
Gögüs, C.G. and Özer, G., 2014. The Roles of Technology Acceptance Model Antecedents and Switching Cost on Accounting Software Use. Journal of Management Information and Decision Sciences, 17(1), p.1.
Hossack, S., 2015. Cloud-based accounting and productivity tools for practitioners and taxpayers. Taxation in Australia, 50(5), p.265.
https://www.conceptdraw.com. (2017). Accounting Flowchart Symbols | Sales Process Flowchart. Flowchart Examples | Basic Flowchart Symbols and Meaning | Sales Accounting Flow Chart. [online] Available at: https://www.conceptdraw.com/examples/sales-accounting-flow-chart [Accessed 24 Apr. 2017].
Hui, Q. and Chang, S., 2016, March. Accounting Safety System in E-Commerce and Its Application. In Measuring Technology and Mechatronics Automation (ICMTMA), 2016 Eighth International Conference on (pp. 63-66). IEEE.
Ma, X., 2015. The adoption of cloud computing for small and medium accounting firms.
Rahman, M.M., Ahammed, M., Uddin, M., Rouf, M. and Uddin, M.M., 2015. Obstacles and Implementation of Accounting Software System in Small Medium Enterprises (SMEs): Case of South Asian Perspective.
Review, X. and Krause, C. (2017). Xero Review 2017 | Reviews, Ratings, Complaints, Comparisons. [online] Merchant Maverick. Available at: https://www.merchantmaverick.com/reviews/xero-review/ [Accessed 24 Apr. 2017].
Schiff, A. and Szendi, J., 2014. Helping small business entrepreneurs avoid critical mistakes in QuickBooks accounting software. The Entrepreneurial Executive, 19, p.169.
Schiff, A. and Szendi, J., 2014. Helping small business entrepreneurs avoid critical mistakes in QuickBooks accounting software. The Entrepreneurial Executive, 19, p.169.
Schorr, M., Sylvester, M., Dopf, G., Henrich, D., Liebich, G., Conrad, M., Reccius, A., Klein, M., Hohendorf, M., Roesinger, A. and Soltek, R., 2013. Providing accounting software application as enterprise services. U.S. Patent 8,442,850.
Schorr, M., Sylvester, M., Dopf, G., Henrich, D., Liebich, G., Conrad, M., Reccius, A., Klein, M., Hohendorf, M., Roesinger, A. and Soltek, R., 2013. Providing accounting software application as enterprise services. U.S. Patent 8,442,850.
Xero Accounting Software. (2017). Online Accounting Software – Free Trial, Free Support | Xero. [online] Available at: https://www.xero.com/us/ [Accessed 24 Apr. 2017].
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