The accounting software are the computer software which supports in processing as well as the recording of the various accounting transactions which comes under several practical modules such as accounts receivable, trial balance, payroll and accounts payable. These accounting software are implemented in three different ways. First is that the organizations can develop it in in-house, the second is purchasing from a third party such as by MYOB or Quickbooks and third, a mixture of first and second way i.e. purchasing and incorporating modifications (Mohamed, 2007). There are various kinds of accounting software which are diverse on the basis of complexity and price associated with them. Other than recording the fiscal transaction and generating the reports, these accounting software also have their support in decision making (Collins, 2006). The paper will present information related to various key elements of accounting software in the literature review such as the current gaps, relevance of the accounting software, the market size, market leaders and the competitive advantages attained b y the market leaders.
The study and research on the adoption of the information technology based accounting software in the companies of Australia is increasing with a rapid rate. The implementation and the adoption of the accounting software is an easy task in current scenario as individuals need more technological systems that can help in lowering the work pressure. In the rapidly changing business organisations, the ICT implementation is changing the beliefs and rules of the game and also the potentials of the pioneering mode of the financial operations (Tijani and Mohammed, 2013). The inter trading model and the transnational model has modified for acknowledging the increasing number of economic as well as trade relayed transactions that takes place by the means of internet and the various technological tools. In past few decades, the information technology has offered numerous advantages to business and the people who know the importance of the accounting software. By incorporating more user friendly and pioneering technology based accounting software; there will be a significant decline in the issues related to the book keeping practice (Dyt and Halabi, 2007).
Moreover, with pioneering and rapid fiscal information, there are available new updates for decision making by the managers. In several studies, it has been mentioned that the use of technology bases accounting software will result in high cost saving, efficient internal communication, increase operational as well as administrative efficiency, high customer base, increases competitiveness, upsurge sales and elevated customer service (Breen, Sciulli and Calvert, 2003). The use of accounting software helps the Australian organisations in sustaining their business but still there is lack of expertise for incorporating such accounting software. In the incorporating and implementation process, there comes several challenges and issues for the businesses such as the need of external consultant, confusion related to proliferation, system integration issues, incompetency of the individuals to use, lack of financial resources, short of accounting knowledge and high work pressure (Pulakanam and Suraweera, 2010).
Current market size
The companies involved in the development of the accounting software have huge opportunities to grow. In Australia, approximately 375 thousand in present time have a cloud based solution and approximately 2 million of the organisations use the accounting software (Macken, 2015). For MYOB only, there are approximately 116,000 customers that are taking use of the cloud-based solutions (Macken, 2015). Another such company is Intuit that is famous for its accounting software to be incorporate in the Australian organisation. One of the key competitors of MYOP is Quickbooks which is the product of Intuit. There are extensive opportunities for Intuit to develop in the market of Australia (Macken, 2015).
Leaders in the market
(Source: Heber, 2015)
In the market of Australia, few are the market leaders of the accounting software industry. These comprises of MYOB, Intuit and Xero. With the IPO information of MYOB, the supremacy battle in accounting software industry changes. The above image shows the higher revenues of MYOB in the comparison of Xero but the churn rate is also high (Heber, 2015).
The market leaders are benefitted with various competitive advantages such as increased productivity, robust financial position, and strong relationship with the customers and partners, high percentage of revenues, constructive feedbacks, elevated cash flow exchange, upsurge customer base, robust EBITDA margins and increased value of share in the Australian market (CMO, 2013).
Current gaps faced by the users of accounting software
There are gaps such as issues regarding the data security, reliance on the external sources, issues in understanding the complex accounting software, incompetency regarding the continuous flow of the power supply as well as the data filtering, issues in supporting large amount of data, inaccuracy as well a irrelevancy of the various financial reports produced by the accounting software (Tijani and Mohammed, 2013).
In the profession of accounting, the use of IT based accounting software is a subject of study for both in academic as well as in practice. The approach of computerized accounting software took place because of the numerous issues faced by the businesses in the paper based accounting. There are various elements in accounting software which are the reason behind attracting Australian organizations in a great number such as declined costs, increased level of efficiency in the business operations, for storing huge data and for having qualitative info to take decisions in the organisations. But there are still number of organisations that are not using these software because of various reasons such as high cost and issues in implementation (James and Maher, 2013).
It is recommended that the Government must offer subsides to the small organizations so that they can afford the accounting software. In such a technologically updated and globalized era, it is essential to have accurate results which are possible by the means of accounting software. The companies are requires to have their emphasis on the issues of data security so that businesses can use it without any risk. To fetch the attention of the non-users, it is essential to make them aware of the various advantages associated with the use of accounting software. The Government can also have training sessions that can educate people to use the software effectively. To conclude with the recommendations, it is essential that the use of the accounting software is a must for the development and growth of the Australian organizations.
Breen, J., Sciulli, N. and Calvert, C., 2003, September. The use of computerised accounting systems in small business. In 16th Annual Conference of Small Enterprise Association of Australia and New Zealand (Vol. 28).
CMO, 2013. MYOB gains competitive advantage with completion of BankLink purchase, Accessed on: 14th June 2017, Accessed from: https://www.cmo.com.au/mediareleases/16522/myob-gains-competitive-advantage-with-completion/
Collins, J.C. 2006. Small Business Software Grows Up. Journal of Accountancy, pp.50-56.
Dyt, R. and Halabi, A.K., 2007. Empirical evidence examining the accounting information systems and accounting reports of small and micro business in Australia. Small Enterprise Research, 15(2), pp.1-9.
Heber, A. 2015. The cloud accounting supremacy war in Australia, Accessed on: 14th June 2017. Accessed from: https://www.businessinsider.com.au/charts-the-battle-for-supremacy-in-australias-cloud-accounting-market-2015-4
Macken, A. 2015. ACCOUNTING SOFTWARE WARS: WHO WILL WIN? Accessed on: 14th June 2017. Accessed from: https://rogermontgomery.com/accounting-software-wars-who-will-win/
Mohamed, A. 2007. Accounting for The Needs of SMEs. Computer Weekly, pp.34-35.
Pulakanam, V. and Suraweera, T. 2010. IMPLEMENTING ACCOUNTING SOFTWARE IN SMALL BUSINESSES IN NEW ZEALAND: AN EXPLORATORY INVESTIGATION, Accountancy Business and the Public Interest, Vol. 9. Pp. 98-124.
Tijani, O.M. and Mohammed, A.K. 2013. Computer-Based Accounting Systems in Small and Medium Enterprises: Empirical Evidence from a Randomized Trial in Nigeria, Universal Journal of Management. 1(1), pp.13-21