Accounting Software Package Of Community Chef Essay

Question:

Write a literature review on the usage of Accounting Software Package for an Organization in Australia.

Answer:

Introduction

The objective of this paper is to conduct a literature review on the usage of accounting software package for an organization in Australia. This literature review is done for ‘Community Chef’. The organization, ‘Community Chef’ is a small business player in Australia. The organization has created a niche in itself as it provides packed meals to people for healthy living. The organization has a motto to provide healthy meal to people to match their active lifestyle. It is a social enterprise and result of vision of 20 Victorian councils who wanted to provide food security to older and people with disability. In terms of product, the USP (Unique Selling Proposition) of Community Chef is its healthy meals. The one thing that the organization lags is the very limited use of Information Technology and it has been a limitation point for Community Chef to scale its business. This paper would discuss the way accounting packages can be used by Community Chef to bring efficiency and effectiveness in its business.

Analysis

Current organizational structure of Community Chef

The organization is a small business organization in the country with close to 100 employees. Joe Ciccaraone is the CEO of the company and the company has very flexible organizational structure. Joe Ciccaraone is the head of three key departments of the company. These are operations, maintenance, and human resources. In addition to above three functions, Community Chef also has a finance function. The current organizational structure of Community Chef ca be demonstrated as:


Figure 1: Organization Structure (Source: )

Operational problems that can exist because of this structure

The organization has a very flexible organizational structure. However, there are departments or functions that work in silos. The lack of real time synchronization among these departments could result in wastage of raw materials and the issues of mismatch between the demand and supply. The good thing for Community Chef is the predictability in demand as it caters to five hospitals and three old age care facilities. The organization deliver close to 2000 means per day. The challenge with current organizational structure is to manage the type of meals in an effective manner. For example, the company has mora than 50 type of soups and close to 250 main course dishes. It can be said that the problem is to manage the highly customizable menu with this organization structure. Some of the other operational problems or issues that could occur due to the current organizational structure can be discussed as:

  • Issue of double entry data: It is possible that Operations & Finance team are putting the same data and this can be an issue while doing data reconciliation (Dumas, ROsa, Mendling, & Reijers, 2013).
  • The organization does not have any automated inventory management system in place. The current organizational structure does not support the concept of automated reorder point (Kisakye, 2013)

Most likely system acquisition method?

The organization, ‘Community Chef’, can either get the customized system developed or it can use a commercial software or an ERP system to manage its business needs. The organization is a small business and based on its size it is suggested that it should not use the full-scale ERP systems like SAP. The licenses of full-fledge ERP systems are very high and Community Chef would not be able to get the desired ROI from this investment. At the same time the custom software may not be a good idea as it would demand a lot of effort. Moreover, the Community Chef may not have desired skills and resources who can manage the development of custom software package. The recommended solution for Community Chef is to go for commercial software. There are various small organizations in Australia that provides the commercial software for accounting packages. One such company is SYSPRO. The organization is a preferred choice for small and medium enterprises in Australia (Johansson, & Carsson, 2013). The option of commercial software is also recommended as it would help Community Chef to save team and reduce overhead and dependency.

System flowchart of the sales procedures

The sales procedure starts with the simple food order sheet. External stakeholders can fill this sheet or the internal stakeholders and executives could also fill this sheet (Lim, & Perrin, 2014). The detailed flowchart of the sales procedures for Community Chef can be shown as:

Control problems in the system and possibility of frauds

The existing control system is not adequate to handle the operations at a large scale. Therefore, it is important that the steps should be taken to improve the control system. For example, there has to be a more standard and systematic manner to manage the raw materials and the purchase of raw materials. Likewise, the control system should also focus on inventory management (Stewart & Kent, 2015). Some of the possibilities of frauds in the existing control system can be highlighted as

  • There are chances to prepare the food orders in excess or in shortage as the inventory management is not linked with the operations of food preparation. It is expected that a IT package would help community Chef to overcome this issue.
  • There is a possibility to inefficiency due to unavailability of raw material. There are chances that some of the raw materials for few items are not available.
  • Also, since revenue recognition and conciliation all happens manually, there may be chances of human errors.
  • There could be chances of frauds or errors in reporting also as in the current form, all the reporting happens manually.

This part is focuses more on the analysis of existing accounting packages in the industry, current Australian accounting software market and the existing gaps that should be fulfilled. The specific sections in this part can be discussed as below:

Development and adoption of the accounting software packages

The accounting software industry is a matured industry in Australia. There are a number of large and small players that manages the development of accounting software packages in the country. The history of progress of accounting software packages dated back to 1980s when Teleware has developed one such software. After a decade, in 1999, MYOB become the market leader in Australian accounting software package industry. That was the time when the offerings from JD Edwards, SAP, Oracle was very expensive and most of the organizations find it difficult to develop a business case for the use of expensive accounting package or ERP system (Scholtz, calitz, & Cilliers, 2013). With time, number of new players entered the market. These are the players like SYSPRO, Saasu, Xero, Quick Books, etc. It is expected that the existing rivalry in the industry would further increase. It is expected that there would be more players entering the market to cater the need of small and med size business organizations in Australia (Hossack, 2015).

Current market size in Australia

The accounting software industry is a million-dollar industry in Australia. The accounting software package industry has seen an exponential growth rate due to advancements in technology and Internet. The expansion in Information Technology has been good for accounting software industry. Today, the focus of organizations is to have an integrated ERP in place that can have a string module for accounting and finance (Woodward, & Tan, 2015). The market size is expected to increase with the focus in cloud computing and cloud based accounting software packages. It is expected that cloud based accounting software would be a key for organizations to manage their accounting needs.

Leaders in the market and the reasons for their competitive edge

The accounting industry is Australia has evolved a lot. At one side, there are large players like SAP, Oracle, Microsoft, etc. and on another side, there are small but highly effective players like Xero, SYSPRO, Intuit, etc. For large business, it can be said that SAP and Microsoft are market leaders. However, for small and medium size enterprises, the market is highly fragmented (Zhang, Nan, & Tan, 2016). There was a time when Xero was a market leader for small and med size enterprises. However, in last few years, Xero has faced a serious threat from companies like SYSPRO and Intuit. Xero has been a leader in the accounting software packages for small and mid-size industries because of its unique reporting capabilities and good customer support. It can be said that after sales service of XERO is very good and this is a main factor for small and medium size organizations to use XERO. Another leader for small and mid-size industry segment is MYOB. The biggest advantage of MYOB is first mover advantage and established credibility, good network and popularity in Australian market. It is a leader in providing accounting functionalities like taxation. In terms of innovation it can be said that all the players like MYOB, XERO, SYSPRO has unique and innovative solutions to offer. However, one of the challenge for them is to manage the increase scale of business in the Australian market.

Current gaps encountered by users/ customers of accounting packages

In terms of accounting software packages, it can be said that there is no single solution that fits all. The choice of accounting software package must be based on the internal needs of organizations. Therefore, it can be said that the accounting software that suits the need of Community Chef may not suffice the need of other organizations in the similar market sector. Some organizations can have a good experience with XERO and there can be some which do not like XERO at all. One of the gaps in the existing accounting software packages is the absence of single view of organization (Linnenluecke & Birt, 2017). The accounting software of current day does offer various views and dashboards. However, a single view or a 360-degree view is missing. Another gap that is observed in the current accounting packages is the lack of support or limited support for third party integrations. There are cases when the organizations may not want to use the accounting packages as a stand-alone software but they would want to integrate the accounting software as a part of their complete IT infrastructure. It can be said that this support is something that different accounting software providers must work on.

Conclusion

The above paper discusses the need of accounting software package for Community Chef. The organization, ‘Community Chef’ is a small business player in Australia. The organization has created a niche in itself as it provides packed meals to people for healthy living. The paper highlighted that commercial accounting software would be a good choice for the company. It is suggested that the organization should use the services of SYSPRO. The paper also discusses the accounting software industry in Australia and discusses the need of integrated accounting package. Based on above discussion, it can be said that in long term, Community Chief should look for the accounting software that could easily be linked with the IT infrastructure of the company.

References

Dumas, M., La Rosa, M., Mendling, J., & Reijers, H. A. (2013).Fundamentals of business process management (Vol. 1, p. 2). Heidelberg: Springer.

Hossack, S. (2015). Cloud-based accounting and productivity tools for practitioners and taxpayers. Taxation in Australia, 50(5), 265.

Johansson, B., & Carlsson, S. A. (2013). An Approach for Identifying Business Requirements for Development of Prospective ERP Systems. InBuilding Sustainable Information Systems (pp. 247-257). Springer US.

Kisakye, A. R. (2013). Computerised Accounting And Processing Of Financial Statements In Manufacturing Firms.

Lim, N., & Perrin, B. (2014). Standard Business Reporting in Australia: Past, Present, and Future. Australasian Journal of Information Systems, 18(3).

Linnenluecke, M.K., Birt, J., Chen, X., Ling, X. and Smith, T., 2017. Accounting Research in Abacus, A&F, AAR, and AJM from 2008–2015: A Review and Research Agenda. Abacus, 53(2), pp.159-179.

Scholtz, B., Calitz, A., & Cilliers, C. (2013). Usability evaluation of a medium-sized ERP system in higher education. Electronic Journal of Information Systems Evaluation, 16(2), 148-161.

Stewart, J., Kent, P. and Routledge, J., 2015. The association between audit partner rotation and audit fees: Empirical evidence from the Australian market. Auditing: A Journal of Practice & Theory, 35(1), pp.181-197.

Woodward, L., & Tan, L. M. (2015). Small Business Owners' Attitudes Toward GST Compliance: A Preliminary Study.

Zhang, Z., Nan, G., Li, M., & Tan, Y. (2016). To Lead or to Follow? Market Entry and Pricing Strategies for Saas Provider. Market Entry and Pricing Strategies for Saas Provider (June 7, 2016).

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