Describe about the Strategic Information Systems for Australian SMEs.
In 1978 to early 1980s, accounting was made manually in most of the Australian SMEs. People knew very little about accounting software and cloud computing (Sherman, 2011, P 98). The most common method which most of these companies used before advancing to accounting software was general ledger. This was just a book with designated pages for each person’s account like account payable, receivable, payroll and so on.
In early 1980s Intuit launched accounting software for personal finance quicken. This software was so helpful in modernizing accounting for the digital age because the use of general ledger was tiresome and did not ensure accuracy (Jeff, 2015, P. 105). Its range of software product was vast, QuickBooks being the commonly used in Australia and other countries. When this company was founded, both small and big companies started realizing how the accounting software would assist them in recording the financial transactions in their businesses. They began training their staff on how to use them and after some time most companies had adopted this technology.
While accounting has been evolving over the years, nothing much has changed in its fundamentals. The feature of crediting and debiting has been a common feature in every discovery (Darryl, 2012, P. 527). Recent decades has indicated significant technological advancements and companies have started to rely on personal computers to assist them in recording their day-to-day business transactions.
Although other market giant companies like MYOB have emergent in Australia, Intuit’s QuickBooks is among the most popular accounting software for SMEs in Australian (Benson, 2011, P. 39). One of the primary reasons why QuickBooks has gained popularity than software from other international companies like Xero is because of its price and its comprehensive level of features.
The uses of accounting software in businesses have grown at a remarkable rate over the past five years in Australia. The number of SMEs using accounting software has been doubling each year (Joseph, 2014, P. 570). The primary reason for this is because every company wants to ensure it does not incur losses as a result of lack of efficiency and accuracy associated with the traditional way of recording financial transactions.
Most of the Australian SMEs are far ahead of their counterparts in other nations in the use of cloud computing accounting software (Gokhan, 2014, P. 60). With the current market competition and technological advancements, each company is trying to ensure it adapts to the advanced accounting techniques ensure smooth financial transactions.
Although small business seeks to adopt the use of cloud accounting software in their operation, some of them are slow yet to start using them because of security concerns (Jeff, 2015, P. 105). This is because some of this software exposes sensitive data to foreign party hence putting the company at risks. This factor has been making most of the accounting software businesses that target small businesses to search for means of ensuring their software ensure security
Other factors which make some of the SMEs to continue using manual accounting techniques include; high prices and lack of efficiency (Darryl, 2012, P. 527). These factors, as well as the lingering impacts of global financial crises, have been making most of the companies which deal with these products to witness reduced sales
The struggle for market share among the three big players in the Australian accounting software is becoming worse as time goes on (Joseph, 2014, P. 570). These companies: MYOB, Intuit, and Xero, compete for dominance in a huge market, each one of them trying to use every strategy to eliminate the need for bookkeepers and allow every business to perform invoicing and cash flow management decisions on the run by the use of computers and mobile phones.
Although the demand for accounting software is expanding the current market size, dominating this market is becoming a challenge for these companies (Carlton, 2012, P 480). The penetration of various international market players like Intuit and Sage are making the competition for Australian accounting software market share to become worse. Sage which claims to be the largest producer of accounting software globally has been planning to expand its operations to the Australian market.
Although Sage does not have a broader brand recognition in this country, sage is familiar to most Australian accountants (Paul, 2015, P. 19). Some of them even use its Handisoft products for their practices. This indicates that if the current Australian market giants like MYOBS do not use proper strategies to retain their position, they may end up losing it to these international companies.
The enterprises that have not realized a good position in the market are trying to use every mean to ensure they gain a competitive advantage (Jeff, 2015, P. 108). Some of them Like MYOBS are making use of technology and innovation to come up with new features which its competitors do not have.
MYOB is the biggest players in the Australian market. It is used by over million SMEs in both Australia and New Zealand (Paul, 2015, P. 20). This accounting software helps businesses to efficiently manage their payrolls, cash flows and day to day bookwork.
MYOB which is the biggest SME accounting software producer in the Australian market rebranded its MYOB live accounts to MYOB Accounting Essentials. This became the strongest threat to XERO because it has been in operation for several years in the Australian market.
This company also sells an accountRight range of hybrid desktop software which has almost everything that all users would expect to find in a traditional desktop accounting program (Gokhan, 2014, P. 60). This software includes facilities like complex inventory which most of its market rivals have not yet added. This aspect makes this company to have a competitive advantage because most consumers feel it can provide what others are not able to provide. Other factors which give MYOB a competitive advantage is because of its accuracy and greater speed of inputs.
Although accounting software is currently paving ways for greater efficiency in most companies, there are various user challenges associated with them. Some of these difficulties include:;
As a result of system restrictions, users are not able to undertake customization based on their preferences. Some of the systems are rather cluttered and so hard to understand.
Almost every business person would like to have things within the minimum time possible the fact that some of the applications are not user-friendly, and this leads to time wastage (Paul, 2015, P. 26). Some of them also lack compatibility, expand abilities and so forth
Most of the accounting software has security issues because they can expose data to a foreign party and that is why some of the companies are slow to adopt them in their operations (Benson, 2011, P. 40). Although firewalls are believed to solve this issue, most of the users do not trust them because they can get screwy at times.
Recommendations
Since the issue of security is one of the biggest challenges associated with most of the accounting software, companies which deal with this software should take proper measures to ensure their products guarantee the security before releasing them in the market (Gokhan, 2014, P. 60). One way of providing security is through undertaking several tests before releasing them in the market.
These companies should also ensure they come up with software that can be used by someone with little skills (Darryl, 2012, P. 526). User-friendly accounting software helps the users to perform tasks within limited time and also helps in saving training costs. It is also good to come up with software which can enable the users to customize them according to their preferences.
References
Benson, G 2011, IRS Addresses Accounting Software Audit Concerns, Journal of Accountancy, Vol. 212, No. 1, PP.38-41.
Birt, I, 2013, Writing Your Plan for Small Business Success, Crows Nest, N.S.W, Allen & Unwin
Carlton, C 2011, A Quick Guide to QuickBooks: These 15 Tips Will Boost Your Proficiency on the World’s Most Popular Accounting System, Journal of Accountancy, Vol. 212, No. 6, PP. 475-490
Darryl. W 2012, A Teaching Case for Understanding the Data Structure of an Accounting Database: Comparing a Commercial System to Rea, Journal of the International Academy for Case Studies, Vol. 18, No. 1, PP.526-530
Fields, E 2011, the Essentials of Finance and Accounting for Nonfinancial Managers, New York: American Management Association
Gokhan, G 2014, The Roles of Technology Acceptance Model Antecedents and Switching Cost on Accounting Software Use, Academy of Information and Management Sciences Journal, Vol. 17, No. 1, PP. 54-70.
Jeff, D 2015, Competitive Edge: The Software Vendors’ View; Asked to Peer into Their Crystal Balls, Executives Foresee Accounting Firms Experiencing Growth with Consulting Services, Value Pricing, and Data, Journal of Accountancy, Vol. 220, No. 2, PP. 100-109.
Jim. B 2010, IRS Audits of Small Business Software Files: Practitioners Should Balance Risk for Their Clients, Journal of Accountancy, Vol. 213, No. 1, PP. 79-80.
Joseph, S 2014, Helping Small Business Entrepreneurs Avoid Critical Mistakes in QuickBooks Accounting Software, Entrepreneurial Executive, Vol. 9, PP 456-500
Paul, B 2015, Tax Software Survey: CPAs Rate the Technical Merits of One of Their Most Critical Tools for Surviving Tax Season, Journal of Accountancy, Vol. 220, No. 3, PP. 18-20.
Sherman, E 2011, Finance and Accounting for Nonfinancial Managers, New York: American Management Association
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