Accounting is part of the operation a business enterprise, it is explain to be the process of summarizing, reporting as well as analyzing the financial data of an organization, a successful and proactive accounting process in an organization requires the accounting packages that will ensure the organization meets it objectives. The accounting information system is a fundamental element of enterprise resource planning; the enterprise resource planning compels an organization to adopt the use of technology while performing its business process. Accounting software is the primary element of Enterprise Resource Planning; the packages are used in recording and processing the financial transaction of an organization within its functional departments. They provide services such as financial statement, consisting balance sheet, cash accounts, accounts payable and receivable.
According Mathews, 2004, the examination of accounting software and packages in Australia is flashback to early 2000 when the federal government of Australia introduced the GST, this was the introduction of the accounting based system which its main purpose was to face-out the use of paper work in the organization. Daniel James and William Maher, 2013, stated in during the year of 2000, the Australian government was keen while compelling and forcing the Small Medium Enterprises to use the computerized system while doing their business activities, this will allow the business owners to closely monitor and track their business activities, and thus improving their performance.
Types of Accounting software Packages
There are various types of accounting packages that are frequently used by the SMEs in Australia under the implementation and the adoption of Enterprise Resource Planning steered by the government. The accounting packages are simple, inexpensive and much related to the business operational activities, they facilitate functions such as company budget. However, some of the accounting packages provide the double entry financial transaction for the companies accounting process. According to Chaplin, 2002, the accounting packages are able to provide the important mult-national accounting frameworks, and facilitating the accounting transaction in multiple currencies.
History of accounting software
According to Rajasa and Faturachman 2015, the most common use accounting system used by many companies prior 2000 was the general ledger, they found out that it was a book with assigned pages for each account relating to the company transactions, such as accounts receivable, payable, cash, bank, and stakeholders equity. Every transaction in this accounting system was done by entering all the transaction by hand.
In 1983, the Intuit Company introduced the accounting system that was computerized, this was major introduce for personal financial process. After the introduction of the TurboTax, the accounting package was widely introduce to the general public, especially for small business organization to use them in their normal financial transactions. The wide spread of the accounting software to many small business organizations in the country left the manual journal entry methods, the computerize system were made pros to the accountants. QuickBooks gained popularity because of its affordability, comprehensive feature it offered to business organization.
In 2006, another accounting package was introduced. The Xero Company in Australia developed Xero accounting software. According to Mayasari, 2015, the accounting software was developed with the purpose of encouraging and persuading the SMEs in Australia to use the new technology while they run their business activities. The Xero accounting packages also gain popularity because of its exceptional and excellent features such as cloud saving data saving as well as its functionality of improving the organization business performance (Mayasari, 2015). It also worked well with the auditing systems used by the internal and external company auditor while they perform their auditing process.
As many companies had realize the importance of using the computerized accounting system, they started adopted use MYOB accounting package. Christopher Lee developed MYOB accounting software in early 1980s. The company, which developed the MYOB accounting package, was also provided the marketing services to SMEs in Australia. Current Market
According to the research, in Australia there are two frequently use accounting packages competing in the business market, these are QuickBooks and Xero Accounting packages. According to Finkelstein and Farbey 2004, the two packages are only accounting systems that have gained more attractiveness in the current market because of their features that reflects Small Medium Enterprises operations (Mayasari, 2015). QuickBooks Intuit has been in the market for more than 5 years, the introduction to Australian market is just but recently.
Xero accounting package has been active in Australia for some three years charming the accountant and small business organization alike as it refreshingly engages and communicates with its customers. After using the Xero accounting package, has virtually untrammeled existence, the customer growth and improvement of organization operations. In the current market, Intuit Company has launched a new interface for the QuickBooks accounting package. MYOB accounting system is not left behind by the research, it is estimated that over 10,000 SMEs have adopted the use of MYOB package, which represents 30%, but compared to Intuit and Xero that controls over 300% of the Australian business market.
According to the research, the adoption of the accounting packages in Australia is based on the feature each package if reflecting to the company activities. Many business organization in Australia are perceived to use the accounting software that are more convenient, reliable and essential to their business activities. For instance, Xero accounting software provides cloud saving services to the companies, QuickBooks accounting package provides the double entry transaction approach to the companies. The adoption of MYOB accounting system is stimulated by the parent company by encouraging the local companies to use their software products.
Leaders in Market
The Xero accounting package is the leading accounting system provider in the Australian market, this represent the remarkable market proportion of all SMEs in Australia. The Xero company has encourage its leadership by providing the global executives and the regional management appointment to execute its growth and strategy. Based on this research, it is found out that, Xero accounting package expanded its strategic partnership with the local companies, including selected by the Big Four as well as other large companies in Australia (Mortenson, and Vidgen, 2016).
Xero accounting system has led in the last 5 years because of its competitive advantage of providing the professional cloud saving services to the company; it provides a comprehensive accounting platform that allows the company to improve its business activities. Xero continues to work closely with an ecosystem of partners such as Square, Vend, ReceiptBank and ZenPayroll; there are now more than 400 ecosystem applications, up from 300 at 31 March 2014. Over 20% of our Business Edition customers use these add-on applications, and in our premium products, the attach rate is 40%.This enables Xero to provide beautiful, innovative solutions to SMEs in Australia.
The primary challenges facing the companies and sublimes from the accounting packages are; lack of trained personnel’s, installation cost and lack of support from the organizations management, security issues are affecting the operation of the companies under the execution of the Enterprise Resource Planning. Installation cost is among the primary factors that has affected the operations of the companies that needs to adopt the use of computerize accounting systems. Trained personnel also limit the companies from delivering their mandate of utilizing the functionality of accounting packages. Management also act as the pillar of failure to the companies, this is when they failed support and allocate enough finance of installing the accounting software.
While ensuring that companies are using the computerized accounting systems, the management are stipulated to ensure that they play their key role in allocating enough financial cost to the relevant company units to install the accounting packages. The human resource units in companies are also mandated to ensure that they trained company employees to the use the new accounting system. The SMEs in Australia are encouraged to installed firewall that will prevent hackers from performing their illegal activities.
In conclusion, the best accounting software help the organization gain its competitive advantage in the market. The paper, has explained the importance of using the accounting software in business organization, they provide accurate transaction and other related operations of the organization. Enterprise Resource Planning comprise the strategic activities which involves the process of adopting the new operating systems in a business enterprise, accounting information system is the primary element of EPR. The common used accounting packages in Australia are the MYOB, QuickBooks Intuit, and Xero accounting package.
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