Accounting Software Packages

Question: Discuss about the Accounting Software Packages. Answer: Introduction: Today, Information technology has pervaded every aspect of businesses and thus market is flooded with various software for different business requirements and numerous vendors worldwide ready to build customized software on demand. There are also various accounting software for different business requirements and scale. The basic functionality of the accounting software is to capture the records and processes accounting transactions in functional areas such of account receivables, account payables, trial balance and payrolls. Apart from these basic features, there are numerous other features that will decide the cost and complexity of the software. Now, it depends on the organizations which features they would like to buy along with the accounting software at a given cost. This is a very critical decision and organizations must spend enough time in discussing and brainstorming the features of the various software available in the market and if the features of the software are aligned with the requirements of the business. The course of this paper will be to discuss about the literature review of the different account software systems used in Australia in terms of their history, development, various features, market size and so on, Analysis The history of the development of accounting software goes back to 1980s when Teleware Inc developed the innovative accounting software. This was later on acquired by the Austalian company and in 1999, the name of the software changed to MYOB. MYOB was leading accounting software industry in Australia for a long time until some few years back when new accounting software with Xero become the leader in Australia . As of data, Xero is the leader with maximum number of customers followed by MYOB. Also, the maximum share of the accounting software solution in organized sector is by few majors like MYOB, Xero, Microsoft, Saasu, QuickBooks Online and Reckon. Currently, the market share of MYOB and Saasu is declining while Xero with its innovative approach, attractive API and aggressive marketing is gaining the market share. QuickBooks Online is also slowly gradually gaining the market share as it is backed by the large businesses. Also, large organizations that are using full-fledged ERP S ystems like SAP and Oracle generally does not need to go for the external accounting software as these ERPs supports accounting applications. Also, Yigitbasioglu (2015) researched that organizations in Australia are increasing preferring to use Accounting software on Cloud rather than traditional on the premise approach. He argued that software is a very dynamic industry with new technology and changes coming quite frequently, so on the premise software are expensive to implement as well as to maintain. Cloud versions of the accounting software will provide huge benefits to organizations in terms of cost as well as flexibility. Organizations can pay based on the usage of the software and can focus more on their core competency rather than support function of maintaining software. With on cloud implementations also dont need to worry about the security aspect of it. All the accounting software offers basic features but the decision to select the software is still very important and depends on lot of other factors. Other factors include the cost of the software and various additional features of the software and the alignment of the features with the business requirements, level of customizations needed, localization support to name a few most important (Hossack, 2015). While selecting the software, organizations must to the fit and gap analysis between their requirements and feature of the software. For instance, perpetual inventory model is not supported by the MYOB while this model works perfectly well with other accounting software like Xero, Saasu, QuickBooks online (https://www.xero.com/, https://www.myob.com/au, https://www.intuit.com.au/, https://www.saasu.com/features/). MYOB only supports periodic inventory. This level of detail needs to be done by the business to identify the important parameters. Once they are identified, weightage should be given to them. For instance, Saasu is best in supporting the perpetual inventory among all the software. Now, weightage should be given to Saasu software based on the usage and requirement of the perpetual inventory by the business. Similarly, Sales and order management module are minimally supported in MYOB and Xero but strong in Saasu and QuickBooks online. However, integrations with 3 rd party are supported by all except MYOB (https://www.xero.com/, https://www.myob.com/au, https://www.intuit.com.au/, https://www.saasu.com/features/). If the requirement of the business is to get the Purchasing functionality along with the accounting software, then Saasu has very good software that supports entire accounts payables reconciliation against purchase order, supports back to back orders and creates automatic purchase order when certain threshold is triggered. Although, these purchasing, order management are full-fledged supported in ERPs systems but ERPs are not in budget of small and medium scale organizations. Small scale enterprise prefers to buy small software with additional features of the functional area which is used heavily. Apart from these, localizations requirements are supported in all. Other important aspects are costing method supported by the software and one which is used by the organization (Powell, 2015). Then other important consideration is the ease of using the software and level of training required. All the software weighs equally on these parameters. In terms of application support by vendor, it is best for Saasu and MYOB while worst for Xero. Thus, it is important that organizations should first understand their requirements before making a decision. Once requirements are clear, they should be prioritizes and given weightage. For instance, payroll module is required in every organization however if any organization employees only few people, it can give less weightage to this feature while comparing software packages. There are some gaps, which are not addressed by any of the existing software applications. For instance, these do not support multi-currency support, which can be issue for globalized organizations (Zhang, Nan, Tan, 2016). Also, analytics facility is also missing in such software but then expecting analytics and intelligence from accounting software is also not justified. There are other things like intercompany transactions commonly known as (IR/ISO internal requisition/internal sales order) which are also not supported and hence there is much more effort in balancing the entries. Fraud detection is another such issue as argued by Granlund (2011), which is not supported by these software. Fraud detection is very important feature to stop the scams. If the organizations are looking for much more features in accounting software, they can either go for exhaustive ERP packages like SAP or can hire vendors to develop their own software. Both of these options will be quite difficult and the change in the business process (Venkatachalam, 2015) will be the better approach for the business. Conclusions Recommendations There are many accounting software exists in the market that caters to the different business requirements. Some requirements have good support in one software while the same software does not support some requirements. There is no one size that fits all. Each software has their own pros and cons (Jadhav, Sonar, 2009). Xero is gaining the popularity in Australia in last few years and become the marker leader, the status, which is earlier, enjoyed by the MYOB. However, still there are lots of downside of Xero also like poor support of their application. MYOB is also best in some respects but again there are downsides, there are not many people available with the MYOB skills set and there is lack of skilled workers (https://www.myob.com/au ). In a nutshell, organizations need to assess their own requirements and select the application accordingly. Once the accounting software is finalized, the implementation approach is also very important. Improper implementation will lead to poor ut ilization of the software (Mouritsen, Hansen, Hansen, 2009). No matter how good the software is, it is the implementation strategy that makes the difference. Organizations must have dedicated IT strategy aligned with the business strategy. It is expected that the industry of accounting software would continue to evolve in Australia. The industry is currently in the growth state and it is expected that the industry would enter the mature stage soon. References 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. Hossack, S. (2015). Cloud-based accounting and productivity tools for practitioners and taxpayers.Taxation in Australia,50(5), 265. Jadhav, A.S. and Sonar, R.M., 2009. Evaluating and selecting software packages: A review.Information and software technology,51(3), pp.555-563. 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