An accounting software is a computer based system that is used by account managers to execute accounting tasks. (Boulianne 2014). An accounting software can either be created on handy for local use or acquired from developing companies of such. There are various categories of accounting software. They range from small scale software to large scale software, depending on the area of usage and the level of transacting that it is able to do. Accounting software can either come packaged and only specialized for processional transactions or may include modules to help in managerial tasks and or solving simple problems, (Boulianne 2014).
As technology advances, the adoption of accounting software and their utilization is changing too. In Australia, there are notable changes in both the design and development of accounting software and on their usage.
Many company organizations in Australia have fully incorporated accounting software into their daily operations. This literature review document reviews the existing literature on accounting software and seeks to analyze the development of such applications, their adoption by organizations, their current, market size and challenges based on the Common Wealth Bank in Australia. This review also takes into account current market of accounting software, their development and challenges faced in adopting them. Challenges that would be identified will form the basis of giving recommendations to enhance future improvement
Banks are the major organizations that are making use of the accounting software. The major accounting software in the Australian market include MYOB, Intuit and Xero. Companies are now taking these software to the clouds, using cloud-computing technology.
In this technological age, organizations are on a competitive track in keeping up with the technologies of the age. Organization need to utilize effectively information systems by seeking to understand their organization, principles of working and management. In the rapidly changing environment, it is needful to understand that the objective of information system is not only to help in managerial tasks, but also act as a basis for organizational performance as their basis for a competitive space in this dynamic environment. In order to obtain space to grow in the rapidly evolving business environment, managers should understand that in additional to having the information software, there is need to formulate effective strategies that would be important as to ensure the effective management and utilization of the soft wares, (Kavanagh & Drennan 2008).
Current Organization structure
An organizational structure involves how activities, of an organization help it to achieve its goals and objectives. Common wealth Bank is one of the biggest and most popular banking firm in Australia. The organization serves its clients with its 50,000 strong workforce. The bank has invested in offering a range of financial services aimed at helping people grow financially. (Ghasemi et al 2011).
The structure of the Commonwealth Bank reflects a new business strategic standing. The common wealth bank structure of organization depicts a divisive form of structure. This kind of structure has made Commonwealth bank to be recognized as the most stable organization in Australia, (Christauskas & Miseviciene 2012). In this new structure, managers who are majorly involved in managerial roles are also involved in the monitoring of financial and accounting reports of the bank. The fact that there are no independent departments for accounting or financial operations gives the organization a well-orchestrated structural definition that has enabled it to make notable leaps especially in its gross annual revenue.
Commonwealth bank made a collaboration deal with Xero, a move that will see its have a direct linkage with to Xero accounting software from without the bank’s platform. With the move, customers are now able to harmonize transactions seamlessly.
Notwithstanding the fact that Xero is a well-established accounting software in Australia offering a number of services, Common Wealth Bank lacks an up to date enquiry cycle that will keep track of its accounting entry books, (Pulakanam & Suraweera 2010).
This could be resolved by tendering out the design of a well profiled ERP system that could help track accounting entries and enhance reporting procedures to the top management. Below is a sketch of sales protocol of the organization.
According to (Tribunella & Baroody 2008), the newly adopted managerial structure could lead to divineness amongst various departments within the organization, with senior managers likely to show lack of accountability. The level of accountability amongst managers might fall with time and this will lead to a failure to meet the standards set by the policy of delegation.
As shown above in the sales procedure diagram, there is a security loop hole in the sales order, and there are chances of fraud, because authorization is still an issue here, (Baltzan 2008). With the independence of the departments within the banking farm, there is a high likely hood of managers partnering with fraudsters to rob the bank or the managers themselves sleeping on their job to create a loop hole for fraudsters.
Commonwealth Bank would most likely integrate its accounting software with ERP (Employee Resource Planning) platform products. Basically, many ERP systems would normally allow for integration of accounting software through their accounting modules. The bank can decide to operate the system from the cloud or use the software at the work place (offline). However, with many users now in the online cloud, online fraud crimes like account takeover fraud is highly likely to affect the system, (Seddon et al 2010).
The first time an accounting software to come into play was in the year 1959 when IBM invented the 9PAC computing language. This was a first of its own kind “language’ that enabled one to communicate with databases of a relational type hosted in their computers. Since then, companies started to look into inventing accounting systems that would carry out simple procedural transaction processing tasks since such jobs were executed in batches, (Pulakanam & Suraweera 2010).
With the advancement in technology, ideas fast flopped in on how fast, more efficient and agile accounting software could be designed. In 1981, an accounting system coined Peachtree was designed. It made data storing tasks simpler as it enabled users to retrieve information faster and efficiently, with minimal errors and less chances of failure, (Lai 2008). Peachtree would later come up with an integrated office package, with all the appropriate software for office work as word editor and spreadsheets. In 1983, Intuit Company came up with a more appealing user interface. Ten years later, Telware came up with a more advanced software that would be labelled as the best accounting software at the time, (Pulakanam & Suraweera 2010). Telware would later change its name to MYOB Limited.
For a time, accounting software were only used by large corporations and business organizations. However, as the accounting software’s started to adopt online computing technology, beginner organizations have stated to utilize the accounting software in their operations too. This utilization of accounting software has made organizations to focus on process-based operations.
MYOB has been on the lead in offering accounting services in the Australian market, serving approximately 1.2 million organizations across Australia. Most business prefer MYOB above all other software, (Bernroider 2008). The company serves small scale businesses and beginner companies. At its onset, the company invested largely in desktop accounting systems. However, as accounting departments are not autonomous, desktop systems posed a challenge as accounting software could not exchange reports with other departments because of incompatibility, (Melville 2010). Harmonization of accounts therefore was not easy and this would often result to a number of errors. As a result, accounting software based on desktop models posed a major challenge to accounting companies, (Ramdani et al 2009). This was the motivating factor behind the decision of most companies offering such services to adopt the cloud computing technology. Furthermore, accounting using traditional manual book-keeping was tedious and always liable to errors. At the moment, accounting systems are not difficult to use a long as inputs are correct. Report generation is also automated.
MYOB, Intuit and XERO include the three major players in accounting software in Australia. However, MYOB is the giant of them all, with a strong hold on most company organizations in Australia, (Galliers &Leidner 2014). Adoption of the cloud service technology has shifted all the services to the online cloud, something that has given MYOB a competitive advantage over the rest of the systems. All the service that are needed in MYOB software such as payroll services, book works and cash flow management can all be accessed from the cloud at any time and from anywhere. This has been one of the major factors that have increased the customer base of MYOB.
Though MYOB has been able to streamline its service and has kept in pace with the dynamic technology, there are still challenges that users face with using this software. This is because cloud computing technology comes with a number of challenge. There are many security loop holes and cybercrimes are a common. Due to this security challenges, authentication of users and requested services is a pre-requisite to users of these systems. (Alleyne & Weekes-Marshall 2011).
The adoption of the online cloud services has increased he popularity of the company. Cloud computing has so many advantages, but most of all it’s because it is easily accessible from anywhere, anytime. MYOB has shed away the repetitive tasks of the desk, and there is no more tedious work. (Darvasi et al 2011). Many errors have been thus immensely reduced, something that has increased its accuracy.
One of the challenges faced by customers of the accounting software in the market is operational problems. Some organizations have come to take up accounting software packages that do not fully solve their accounting need. For others, they acquire a software package that they are not able to maintain and or service. It is important for organizations to understand that various software vendors have different accounting software, and they cannot all be preferable at the same time. There is a situation where one would be preferred over another. For example, some organizations prefer to use Microsoft Dynamics over Xero and vice versa. Hence, there is need for organizations to consult widely their need of an accounting software before getting one.
Another challenge faced by customers of accounting software is financial constraints. Although online cloud services are all adapted from both beginner and advanced companies, many beginner companies are still facing financial constraints. As a result, they cannot afford maintenance costs of the software. This is not so much a problem for advanced companies as they do not have financial constraints, (Darvasi et al 2011).
Software deployment is also another challenge that customers face. It’s either some organizations have the right software but install it over a wrong platform, or they may have the right platform to install over but a wrong accounting software. There should be an honest evaluation of the organization’s business procedures before implementing the accounting software.
Surveys that have been carried out show that cloud services and are often liable to cybercrime. According to (Alleyne & Weekes-Marshall 2011), encryption is a necessity in cloud platforms such that software runs in an environment that is composed of ciphered texts. Furthermore, since MYOB cannot work without add-ons including the browser, system is often slow, especially when handling tasks that involve a lot of data. In most cases, it requires installation of third-party software and updates. (Boulianne 2014). On the same note, some essentials of MYOB such as MYOB Essential cannot be accessed from the cloud.
Organizations should do an honest analysis of their need to acquire an accounting software. This should be done from various perspectives, and should include consulting from various stakeholders. Inputs from these stakeholders (both internal and external) should be factored in making the final decision. Involving the stakeholders will give a good knowledge on th level of the need of the particular organization to adopt an accounting software.
When the need has been established, the organization next looks for a vendor then identify the specific product that they need. There are various accounting software vendors dealing with a variety of products. Each organization could have their choice, hence it is important to understand the product specifications before acquiring it. These steps should be followed so as to avoid acquiring of a software that does not match the need at hand.
To reduce fraud cases, multi-level authentication ought to be integrated into the software. The organizations need also seek for further security features for which to integrate into their systems. This will strengthen the security of the system. There is need to update the software such that all service can be accessed from the cloud without much requirements.
Conclusion
The objective of this review paper was to review a business organization using accounting software in Australia. The review considered Commonwealth Bank, a leading financial solution provider across Australia. Commonwealth Bank has partnered with Xero, a major provider of accounting services. In this review, history of accounting software, its evolution and market size have also been analyzed. Challenges faced by the users of these accounting software have also been highlighted, (Chen et al 2010).
There are several ways of implementing of new accounting systems as has been highlighted. These approaches are not all the same. Therefore, before an accounting software is implemented, a proper review of requirements should be carried out. In summary, implementation of accounting systems needs to be integrated into the business strategy of an organization.
References
Alleyne, P. and Weekes-Marshall, D., 2011. An exploratory study of management accounting practices in manufacturing companies in Barbados. International Journal of Business and Social Science, 2(9).
Baltzan, P., 2008. Business-driven information systems. McGraw Hill Higher Education.
Bernroider, E.W., 2008. IT governance for enterprise resource planning supported by the DeLone–McLean model of information systems success. Information & Management, 45(5), pp.257-269.
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.
Christauskas, C. and Miseviciene, R., 2012. Cloud–computing based accounting for small to medium sized business. Engineering Economics, 23(1), pp.14-21.
Chen, D.Q., Mocker, M., Preston, D.S. and Teubner, A., 2010. Information systems strategy: reconceptualization, measurement, and implications. MIS quarterly, 34(2), pp.233-259.
Darvasi, D., Badescu, A., Dobritoiu, C., Molnar, F. and Slavici, T., 2011. Accounting software using expert systems. In Proceedings of the fifth Wseas International Conference on Business Administration (ICBA’11) Puerto Morelos, Mexico(pp. 97-102).
Galliers, R.D. and Leidner, D.E., 2014. Strategic information management: challenges and strategies in managing information systems. Routledge.
Ghasemi, M., Shafeiepour, V., Aslani, M. and Barvayeh, E., 2011. The impact of Information Technology (IT) on modern accounting systems. Procedia-Social and Behavioral Sciences, 28, pp.112-116.
Kavanagh, M.H. and Drennan, L., 2008. What skills and attributes does an accounting graduate need? Evidence from student perceptions and employer expectations. Accounting & Finance, 48(2), pp.279-300.
Lai, M.L., 2008. Technology readiness, internet self-efficacy and computing experience of professional accounting students. Campus-Wide Information Systems, 25(1), pp.18-29.
Melville, N.P., 2010. Information systems innovation for environmental sustainability. MIS quarterly, 34(1), pp.1-21.
Pulakanam, V. and Suraweera, T., 2010. Implementing accounting software in small businesses in New Zealand: An exploratory investigation. Accountancy Business and the Public Interest, 9(64), pp.98-124.
Ramdani, B., Kawalek, P. and Lorenzo, O., 2009. Predicting SMEs’ adoption of enterprise systems. Journal of enterprise information management, 22(1/2), pp.10-24Seddon, P.B., Calvert, C. and Yang, S., 2010. A multi-project model of key factors affecting organizational benefits from enterprise systems. MIS quarterly, 34(2), pp.305-328.
Tribunella, T. and Baroody, J., 2008. 20 questions on open source accounting software. New York State Society of Certified Public Accountants.
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