Literature Review: Accounting Software Packages

There are number of accounting software used across Australia. The country has number of small and large organizations that uses accounting software. Sonar (2009) argued that the use of accounting software depends on number of factors. The need of the accounting software for large organizations may not be the same as the need of the accounting software for small or mid-size organizations. By definition, accounting software describes a type of application software that records and processes accounting transactions within functional modules such as accounts payable, accounts receivable, payroll, and trial balance. It functions as an accounting information system. The objective of this paper is to discuss the literature review on the accounting software packages that are being used in Australia.

The market of accounting software is a matured market. The history of accounting software goes back to 1990s. Before 1990s, there were a number of players in the market. After 1990s, the market observed a consolidation phase. In the current market conditions, the market is divided into organized segment and unorganized segment. The large and third party players like Microsoft, Xero, Kashoo Accounting Software, Working Point Accounting software, etc. rules the market (Hansen, 2009). The large companies would typically use the high end accounting software that could be integrated with the ERP (Employee Resource Planning) products. Generally the ERP systems like Microsoft Dynamics would have an integrated module of accounting.

The research suggests that the organizations can have various ways to use accounting software. The firms can use the ‘on premise’ installations of accounting software or the firms can use the cloud version of the accounting software. In recent times, there has been a trend in the industry of using the cloud based accounting software. In fact, the Australian market has witnessed a transformation from on-premise installation to cloud based accounting software (Oster, 2012). In the field of organized accounting business, Microsoft is one of a market leader. Microsoft offers various types of accounting software installation options like on premise, on cloud, software as a service, platform as a service, etc. In recent times, the market share of Microsoft and other companies have seen an increase in the share of cloud based accounting software implementation. There are various advantages of cloud based accounting software. It helps the organizations to minimize the cost. With the on-cloud implementation, the organizations are not required to make any initial investment towards hardware. One of the difficult tasks for administration is to manage operational and capital expenses. The revenue collected from customers can help to manage operational expenses but the decisions around capital investments are always difficult to make (Shoaib, 2012). With ever changing technology and development, organizations operating in different industry have to make capital investment on regular and continuous basis and the use of cloud based accounting system enables the organization to optimize the operational expenses. It is imperative that employees, internal stakeholders and external stakeholders should support administration in these decisions.

There was a time when the accounting software in Australia was primarily being used by the large organizations only. However, with the use of cloud computing and the use of cloud base accounting software implementation, the small organizations have also started to use the accounting software. The use of accounting systems and software also enables the organizations to emerge as process based organizations. The movement to a process-based organization is easier said than done; however, and Creed, Daly, Dowdle, and Stevens (2008) warned the transformation into a process-based organization is a challenge despite what the books describe. From a top manager and middle manager perspective the shift toward integration means employee collaboration and centralization of certain functions and patience with the organization’s plans to achieve organizational outcomes. Cultivating cross-functional process teams will shift organizations to a process-based organization and cross-functional teams will help transform value added processes (Vanhaverbeke & Torremans, 1999) industry best practices (p. 50).

There are various theories that describe the use of accounting software for firms in Australia and the firms at global level. Taylor’s theory has a huge impact on the contemporary organizational design being that it was one of the first designs to communicate how to effectively run an organization in a systematic manner with the use of integrated accounting software. The way this theory described the organization and people as a running machine puts in perspective how the organizations should be.  Also, how Taylor states that the mind can be rebooted and programmed shows that the direction of an organizations can be done many differing ways and it is up to those who run it to determine how it should best run with the of ERP systems and accounting software. From this theory, many other theories can and have been birthed.  This theory provides the perfect foundation to build upon in efforts to create many differing ways to establish a more contemporary designed organization.

There are certain gaps in the current use of accounting software that could be bridged by the organizations. In fact, there are organizations that are working continuously to bridge this gap. One of the gaps is the limited use of accounting software by the large organizations. It is observed that the use of accounting software is at a good level for the large and established organizations. However, the small organizations in Australia are not able to make the extensive use of accounting software. Another observed gap is in the long term planning and use of accounting software. It is observed that organizations would make the decision to invest on the accounting software with a short-term vision. It is important that the organizations should have a long-term vision with the implementation of accounting software. Authors argued that the accounting software should be implemented as a part of the overall ERP or Information System implementation within the organization. The accounting software should not be considered as a stand-alone implementation. The organizations and stakeholders would be able to make the complete benefits of accounting software implementation only when the software is integrated with other IT systems used in the organization.

Another gap is in the limited use of accounting software and packages towards fraud detection. Granlund (2011) argued that the frauds and insider trading incidents like Enron could have been avoided with the use of accounting software at workplace. Therefore, it is recommended that the organizations should be able to take complete benefits from the implementation of accounting software. In a business relationship, accounting software can also be used to generate the trust factor.  It should be even more important to work on the trust factor and to communicate a lack of action if something is in the way of being able to deliver of the promised item. It is recommended that the organizations should have a 360-degree view of the business operations while implementing the accounting software. The holistic understanding of the business operations would enable the organizations to derive the maximum benefits from the implementation of accounting software. The use of accounting software in Australia has evolved a lot and it is expected that this field would continue to evolve with the emergence of more and more players. The competition is already high among the existing players and it is expected that this competition would continue to increase.

It is recommended that the organizations should first analyze the actual need of the accounting software from different perspective. The inputs from various internal and external stakeholders would enable the management to have a better understanding of need. Once the need of accounting software is established, the organization should decide the vendor and the product. There are various products in the market and various vendors. For some organizations, the Microsoft Dynamics is the best solution and for some of the organizations, XERO could be the best option. It is important that the organization should use the product that is best suited for their business (Brooks, 2009). Once the organization has determined the product and vendor, the nest step for organizations would be to determine the platform to implement the accounting software. There are many ways to approach the implementation of your new accounting system, and not surprisingly, some approaches work far better than others. The first step in the implementation of accounting software process should begin with a thorough review of the business requirements and processes, to identify what is working well and that aspects of the business that may need improvement and refinement. In a nutshell it can be said that the implementation of the accounting software should be the part of the overall business level strategy of the organization.

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 Creed, D., Daly, D., Dowdle, P., & Stevens, J. (2008). A roadmap to help your organization become process-based. Journal Of Corporate Accounting & Finance (Wiley, 19(5), 77-83. doi: 10.1002/jcaf.20420

Granlund, M., 2011. Extending AIS research to management accounting and control issues: A research note. International Journal of Accounting Information Systems, 12(1), pp.3-19.

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Oster, R.A., 2012. An examination of statistical software packages for categorical data analysis using exact methods. The American Statistician.

Vanhaverbeke, W. & Torremans, H. (1999). Organizational structure in process-based organizations. Knowledge & Process Management, 6(1), 41-52. doi: 10.1002/(SICI)1099-1441(199903)6:13.0.CO;2-4