The current discussion will be based on the company A & A Bakeries Pty Ltd. This is a retail bakery outlet that is based in the area of Cabramatta in Australia. The company is one of the local bakery brands that have a strong presence in terms of the choices and the preferences of the people of the area. The brand is a local limited brand that has a fairly middle scale volume in terms of its business and also the number of employees who are working for firm. The brand is a family owned business where a certain centralized management is the order of the day (waffles, 2016).
The family owned business is managed by the members of the single founding family. There are about 25 to 30 employees in the company who are involved in the processes of manufacturing, retail operations and accounting. The last part is the area where the company management has been facing problems. Accounting is a task that will involve maintain of the accounts that are responsible for income and also the expenditure and costs of the company, again at the same time it will also include the aspects of the taxes and the other liabilities that are payable by the company on a regular basis. This family owned business is one of the smaller employers of the region and accounting is mostly carried out in a manual basis in the company. Not much use of accounting packages and controlled systems has been implemented so far (García, 2015).
The company has faced a large number of problems in its accounting genre. In this context we see that the accounts of the company are in a rather messy situation. The balance sheets in terms of the total income and the total expenditures have not been computed in the best possible manners. Hence the management of the company or the owners are still in darkness in terms of the accurate information of the actual profits or the losses of the company. The problems that are expected in the future are the pay ability of the taxes and the other financial liabilities of the company. These are matters of utter importance and can drag the owners into a legal hassle in case errors in payment occur. This is the major danger that lurks for the company in the future that becomes all the more potent due to the current accounting systems of the company. The inefficiency of the accounting systems of the company can also give rise to unethical practices amongst the employees of the company. It will only create a situation of degeneration for the business as a whole (Thompson, 2016).
The system of ERP or that of enterprise resource planning shall be the best form of accounting that can rejuvenate the entire operations of the company. This will be a system that can link all the facts and the aspects of the business and can align them into a single force. The various parts and the departments of the company can be interlinked and the overall performance of the company can be improved. However in terms of their accounting systems, getting hold of commercial software for accounting would be best possible way. This way the entire accounts team can be streamlined and a systematized standard can be set for the accounting task of the company. The balance sheets and the accounts can be settled in a hassle free manner and the entire task can be done in a much easier style. The accounts and all its details will be nearly organized and both the owners of the company and the employees can refer to smaller details with much more ease and precision. The tracking of all tax pay ability can also be done in a much more diligent manner (Bakerybazar, 2015).
System process flowchart of A & A Bakery
The control panels seems to be the manual intervention that is happening in the various levels of the accounting task of the company, In this context it can be said that the accounts department is a small team of 3 to four people who are doing the basic accounts settlement of the incomes and the expenses of the company. As a difference between the two the simple profits or the losses of the company are being calculated. This is a system that is okay for small sized enterprises. However in the current context we see that the present management of the company is looking forward to increase the bulk of the business. They have plans of increasing the number of shops and the retail outlets of the brand. This shall help to create a larger awareness for the grand also increase the business volume of the brand. However this will also make the process of accounting all the more complex and expanded. For better precision dependence on manual competence would be a wrong thing to do. This is the situation when the company’s accounts are demanding a significant and a considerable change. This change would come in the form of introduction of an accounting information system or an accounting package. In this context the company can contact MYOB one of the leading Australian forms for its accounting settlement and streamlining tasks (Education, 2016).
In case this steps is not taken then the company is likely to face a large number of challenges and setbacks in the coming future. One of the biggest problems is that the company management will not be able to understand the amount of expenses that can be accounted under the various heads of the company. This is a process that is carried out in most of the companies so that a cost saving planning can be carried out for the company. This can be elemental in bringing about increased profits for the company. In this context we see that this is a process that can yet again be very helpful to stop overspending and also any traces of unethically practices that might could just go in the various parts and corners of the company (Abssasia, 2017).
Accounting Information System or AIS is the process through which global business entities are able to maintain their accounting requirements as per the specific guideline prescribed by different accounting standards. Australian companies are also going as per the trend of the system and implement accounting information system with latest trend as per their requirement. The transition of AIS has faced several stages with its earlier day of application till date. During the time AIS has getting upgraded as per the development of IT and to match the requirement of the trendy users (Peavler, 2017).
The need of accounting system is well acknowledged from the first day of starting business. The earlier concept was to maintain the accounting of the business entities in manual format with the basic concept of what is given and what is got. By balancing these two factors, the entrepreneur could be able to derive the gain or loss. In earlier stages the need was basic and no such discrete analysis was required to find out the position of the entity. Since early 80’s the introduction of computerized accounting system is introduced. In earlier stages the application was cumbersome due to lesser user friendly mode of packages available in the market. Later on, as per the development of Information Technology, the modification, amendments and necessary introduction are made to meet the need of the users (Manda, 2016).
As per literature; Standard Business Reporting in Australia: Past, Present and Future by Nena Lim and Brain Perrin (Volume 18, Number 3, 2014), main emphasis has been given on the subject through the application of XBRL and XML. The earlier customized versions of accounting software were mainly of customized in nature. Later on the introduction of cloud based accounting software has taken place of those customized software. Accounting information system is the livewire of any business enterprise and proper adoption of the same is required to ensure proper maintenance of accounting to ensure prudence and transparency to safeguard the interest of the stakeholders. Adoption of IAS is mainly to follow the standardized format of accounting available through the options of generalized accounting software in the market to maintain accounting operation of the business entities. The transition is through the path of desktop accounting to cloud based mobile accounting and the latest version is gaining its popularity due to its quick access, and required feed from the AIS (Lim & Perrin, 2014).
Sector of digital economy is going ahead in Australia with fast speed and is contributing $ 79 billion which is 5.1% of GDP of Australia in current financial year, as expressed by the release of Deloitte Access Economics. In 2011 as per The Connected Continent Report. The achievement t is revealed that $ 50 Billion worth figure with projected advanced figure of $ 70 billion by 2016. Present achievement is trending towards business of $ 139 billion projection with contribution to the GDP of 7.3% is anticipated by the end of 2020. This business is instrumental to transform the business and the economy in overall aspect.
As per Ric Simes of Deloitte the definition of digital economy is really difficult but with their report it is clarifying the role of communication and power of computation in the aspect of entrepreneurial activities as well as in the perspective of economy with big sphere. It is also identified by the Deloitte that the application of mobile had increased the scope of cloud- based accounting with desktop to desktop technologies in the business organization with the concept of SMAC technologies powered with the concept of social, media, analytic and cloud OS responsible for this highly achieved growth in this segment.
The Association of Accounting Technicians or AAT is sponsoring the concept of cloud accounting in the SMEs of Australia to prove its worth as a tool for competitive edge. As per the Chief Executive of AAT, due to stiff competition of accounting software market, the prices are really becoming very tight with regular fall in prices. It is the step taken by federal authority to reduce the tax impact on small units which has emphatically encourages the habit of upgrade of the accounting software of the small units (theoutsourcedaccountant, 2015).
For this purpose we are considering three big accounting software companies namely MYOB, Reckon and XERO. Through their performance record, it is found that these three companies are the biggest competitors in this segment and they have found prominent place in the sector with formidable presence in the Australian market by their extended professional services. Mainly these accounting software packages are used by the SMEs and the enterprises of Australia has the binding of following AASB standards with IFRS reporting norms to provide prudence, standardization and transparency in their record so far financial information is concerned. These standards also force the companies to follow the guideline fixed by the authority for the SMEs to follow in perspective of the accounting system application. Early aptness of the perceived changes in the accounting practices endorsed by the authority makes them ahead of their competitors to be on advantageous position in the accounting software market of Australia. with all these featured observations, it is found that MYOB is the largest player in the market followed by Reckon and XERO (Carey, 2015).
References
Abssasia, 2017. Myob. [Online] Available at: https://www.abssasia.com/ [Accessed 16 April 2017].
Bakerybazar, 2015. Bakeries adopting ERP system for better operational efficiency. [Online] Available at: https://www.bakerybazar.com/2009/12/bakeries-adopting-erp-system-for-better.html [Accessed 16 April 2017].
Carey, M., 2015. Cloud Accounting Overview 2015: MYOB Essentials vs Xero vs Intuit QuickBooks Online vs Reckon One. [Online] Available at: https://www.digitalfirst.com/2015-overview-cloud-accounting-software/ [Accessed 16 April 2017].
Education, 2016. Accounting. [Online] Available at: https://www.education.gov.za/Portals/0/CD/Curriculum%20doc%20question%20Papers2007/SBA%20ACCOUNTING%20TEACHER%20GUIDE.pdf?ver=2014-02-11-110220-000 [Accessed 16 April 2017].
García, V.L., 2015. Bakery’s Organizational Structure. [Online] Available at: https://prezi.com/efnypaxv6thc/bakerys-organizational-structure/ [Accessed 16 April 2017].
Lim, N. & Perrin, B., 2014. Standard business reporting in Australia: Past, present and future. Australasian Journal of Information Systems, 18(3), pp.29-51.
Manda, G., 2016. Accounting As an Information System. [Online] Available at: https://smallbusiness.chron.com/accounting-information-system-43420.html [Accessed 16 April 2017].
Peavler, R., 2017. The Business Owner’s Guide to Accounting Information Systems. [Online] Available at: https://www.thebalance.com/accounting-information-systems-392953 [Accessed 16 April 2017].
theoutsourcedaccountant, 2015. Australian Accounting Trends in 2015 Financial Year. [Online] Available at: https://theoutsourcedaccountant.com/australian-accounting-trends-in-2015-financial-year/ [Accessed 16 April 2017].
Thompson, S., 2016. Risks of a Bakery. [Online] Available at: https://smallbusiness.chron.com/risks-bakery-61962.html [Accessed 16 April 2017].
waffles, J., 2016. Business Project Bakery. [Online] Available at: https://creately.com/diagram/new-example/hudbofkc1/Business%20Project%20Bakery [Accessed 16 April 2017].
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