Discuss about the Services and Business Models of Product.
The report aims to develop deep understanding about accounting software used in Australia. In today’s modern business world the significance of accounting software cannot be ignored. It is effectively helpful for business owners to get functions done in less time as compared to manual accounting. Along with this, the report involves in discussing about history of accounting software in Australia, Identification of market leaders and their competitive advantages. Furthermore, the reports also discuses about challenges faced users of accounting software along with required suggestions to remove these challenges.
Accounting software’s are defined as class of computer programs that enables an individual or organization to perform financial transaction of business in an easily, quickly and effective way. The need of accounting software’s arose in Australia’s business industry in order to reduce the paper work and to effectively meet the technological advancements. Therefore, due to the need of technological advancements, the businesses have effectively began to rely upon inventions like personal computers for effective performance of their business activities. The introduction of computerized accounting systems provide key advantages such as speed and accuracy of operation, and present ability to see the real-time state of financial position of organizations (Warren, et al., 2011).
Up to 1974, accounting was done mostly in the same way as the ancient Egyptians had started doing it before 3000 years. But due to increasing functioning and operations of organization, it is not possible to manage each and every operation manually (Ryan, 2012). So, to manage each and every operation and function efficiently and effectively the accounting softwares were developed. Moreover, as time passed, computer capacity grew to enable the use of higher-level development tools. These tools allowed people to define and set business rules without having needed to understand everything from the basic.
Moreover, accounting softwares are effectively helpful in minimizing manual data entry and errors along with this, it also effectively results in saving of time and money of business owners. Therefore, variety of software’s was developed for modernizing the accounting for the digital age. The software’s includes MYOB, Intuit, Xero, Reckson and Saasu. Intuit was developed in 1983 and played an effective role in modernising accounting in an effective way. On the other hand, MYOB was establishes in 1980s by Christopher Lee and the team at Teleware, Inc. It was generally designed to perform accounting functions but also helpful for business owners in increasing their profitability. In contrast to this, Xero is one of the fastest growing software and it was founded in 2006. Its headquarters are at Willingdon, New Zealand (Xero, 2016). It helps accountants and book keepers to build relationship of trust with small business clients through online association.
The Australia’s accounting software market consists of three major market leaders which includes Xero, Intuit and MYOB. All these companies compete to gain huge market share through attaining better competitive advantage. All these companies are effectively helpful to fulfil needs of every business by enabling them to keep track of its accounts in an appropriate way. Along with this, they effectively remove the need of book keepers and facilitate business to make their invoicing and cash flow management decisions effectively through desktops and mobile apps (Heber, 2015). Furthermore, both MYOB and Xero provide softwares to small and medium size businesses that enable them to manage their taxes and payrolls.
Xero is the biggest cloud based accounting company containing large number of subscribers and built specially for small and medium sized businesses. It was establishes in 2006 in New Zealand and it further establishes its source majorly in Australia where online accounting and banking has progressed at higher levels. Moreover, it contains market share of about 15% nationally (Financial Review, 2016). Additionally, its cloud based computing helps it to attain competitive advantage over its major competitors as it is a smarter, faster and cheaper processing of managing finance. Along with this, another advantage that cloud computing involves is accessibility which means that at any time when there is an internet connection, the users of Xero can easily access their accounts anytime and anywhere. This reflects that introduction of the cloud to the online accounting software was an incredible strategy of the organization for the achievement of competitive advantage. Moreover, its real-time access to current financial position of business is an effective measure that helps to attain competitive edge over its competitors.
However, Intuit had effectively built accounting software for small, medium and star up business. It can also be used by sole traders as well. Its range of software products is very wide but QuickBooks is most commonly used software globally. QuickBooks is effective software that helps to make accounting easy and also a time and cost effective package for small, medium and growing business to perform their financial operations effectively. Along with this, it consists of market share of 13.52% (CSI Market, 2016). Moreover, it is cost effective software that involves in providing a number of comprehensive features to attract customer attention which in turn leads to attainment of competitive advantage over its major competitors. It also enables business owners to effectively track their cost, profit and income. Moreover, the Intuit Inc. has effectively involved in connecting customers online to their services which are developed to provide benefits and value to its customers. Additionally, it also connects customer to customer which facilitate each and every customer to share their ideas and information that help them to solve their doubts and problem collectively. This in turn helps organization to attain competitive advantage over its main competitors.
On the other hand, MYOB is the largest accounting software provider in Australia. It is a cloud based accounting software that involves in providing greater accessibility and effective output speed. It effectively enables business owners to perform various operations and financial functions in less time and money as compared other accounting software (Curtis, 2015). It also effectively eliminates the manual accounting processes which consists of a high degree of risk and errors. Along with this, it involves in performing work with greater accuracy and latest information which in turn enables business owners to attain true financial stability and security. This will effectively helps MYOB to gain competitive advantages over its competitors. Moreover, acquisition of Bank Link purchase is an appropriate step taken by MYOB that is effectively helpful in attaining competitive advantage over its competitors. The alliance between MYOB’s extensive range of effective quality online and desktop products and Bank Link’s secure and accurate bank feeds is an effective way to deliver superior quality cloud offerings to large number of customers.
There are various challenges or problems that are faced by users or customers of accounting software. The major problem or challenge faced by users involves lack of data security as online content can be easily accessible by hackers (Poorebrahimi and Razavi, 2016). Along with this, there is another problem related to cost associated with accounting software. As the cost of software does not only include cost of using software but also the cost of hiring consultants, the cost of employee training , the cost of on-going maintenance and the cost of employee training. This signifies the important issue of users as small businesses are operated with very limited budget (Machado, 2016). Moreover, lack of accuracy is another challenges as some accounting software are not timely updated and due this users are suffered by issue of system error and data corruption.
Lack of efficiency is also faced by users or customers as basic requirement of every user is to get activities done with less time and accuracy. But some accounting software’s are not user- friendly and due to this users are unable to get activities and operations performed appropriately. Furthermore, poor customer relationship management is also one of the major challenges faced by users of accounting softwares as majority of users are stressed out by lack of guidance and training in using the software (Suarez, et al., 2013). This leads to create lack of trust among customers regarding the particular organization. The gap between price and feature that a particular software packages is providing is also another challenge faced by users as some software packages are providing less features even though they are charging high prices.
In order to remove challenges faced by users or customers of accounting software, it is recommended to the company that for removing the data security issue it should involve in providing password and introduce appropriate access control system. This helps to limit data accessibility only by user, terminal and company. Along with this, it is also suggested that company must involve in providing proper training to user regarding use of particular software which in turn leads to build trust and loyalty among customers. It also helps in saving cost of the company. Moreover, it is also suggested to company that it should introduce integration and automation feature in its software packages so that software can be automatically updated. This will also be beneficial for users to get rid of issues related to system errors and data corruption.
Conclusion
It can be concluded from the above report that accounting softwares plays a significant role in performing functions and operations of business organizations with accuracy and efficiency. Along with this, it is also identified that MYOB, Intuit and Xero are major accounting softwares providing wide range of features to perform work with less time and money. Furthermore, it is also identified that data security and various other challenges are affecting users or customers of accounting software adversely.
References
CSI Market. (2016) Intuit Inc. [Online]. Available at: https://csimarket.com/stocks/competitionSEG2.php?code=INTU (Accessed: 3 Jaunuary 2017).
Curtis, V. (2015) MYOB Software for Dummies. Australia: John Wiley & Sons.
Financial Review. (2016) Xero primed to keep gaining market share in Australia, new managing director Trent Innes says. [Online]. Available at: www.afr.com/technology/xero-primed-to-keep-gaining-market-share-in-australia-new-managing-director-trent-innes-says-20160106-gm0b08 (Accessed: 3 Jamuary, 2017).
Heber, A. (2015) The cloud accounting supremacy war in Australia. [Online]. Available at: https://www.businessinsider.com.au/charts-the-battle-for-supremacy-in-australias-cloud-accounting-market-2015-4 (Accessed: 3 January 2017).
Machado, M., (2016) Management accounting software and accounting practices: empirical study on SME enterprises. WSEAS Transactions on Business and Economics, (1), pp.94-103.
Poorebrahimi, A. and Razavi, F. (2016) Modelling the Role of Using Information Security on Users’ Satisfaction. International Journal of Advanced Networking and Applications, 7(4), p.2823.
Ryan, E. (2012). THE EVOLUTION OF ACCOUNTING SOFTWARE: PAST, PRESENT AND FUTURE. [Online]. Available at: https://www.gaaaccounting.com/the-evolution-of-accounting-software-past-present-and-future/ (Accessed: 3 January 2017).
Suarez, F.F., Cusumano, M.A. and Kahl, S.J. (2013) Services and the business models of product firms: an empirical analysis of the software industry. Management Science, 59(2), pp.420-435.
Warren, C., Reeve, J. And Duchac, J. (2011) Accounting. Australia: Cengage Learning.
Xero (2016). About Xero. [Online]. Available at: https://www.xero.com/us/about/ (Accessed: 3 January 2017).
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