Organizational Structure of Pitcher Partners
The accounting software is application software which is used to record and process the different types of accounting transactions (Machado 2016). They are often categorized under the functional modules such as accounting receivable, accounts payable, payroll, general ledger and trial balance (Quinn and Kristandl 2014). This can be termed as accounting information system that can be developed “in-house” or they can be easily purchased from “third party” source (Machado 2016). This kind of software may be “online based” or they can be desktop-based too. There is great variety in the type and complexity of the accounting software packages used by various companies.
This literature review would study the accounting software packages that are used in a real organization- Pitcher Partners. It is a national association of the independent firms located in Australia (Pitcher.com.au 2017). It is also one of the independent members of Baker Tilly International. The firms operate in the form of independent business entity with shared commitment to the various common values (Pitcher.com.au 2017). This literature review would focus on the current organizational structure of the firm, operational problems of the firm, likely acquisition method and identify any type of control method. The second part of the system would focus on the development as well as adoption of the accounting software packages, current market size, identification of market leaders and the identification of current gaps.Current Organization Structure
The organization structure of Pitcher Partners is simple with the owner, board of management and the different committees as well as officers (Findikoglu and WatsonManheim 2015). The organization places high importance to the business structures and believes that it should be balanced between the long term as well as short term objectives (Pitcher.com.au 2017). They give emphasis on the current taxation laws and they measure the liability compliance. They are very prompt in understanding the business risks in their day to day functioning.Operational Problems
The simplified organization structure can cause significant errors in the system. This is because of the lack of division of labor in the system (Pitcher.com.au 2017). This causes over burden for the existing workers. The employees in the organization have to take extra work loads and they are unable to deliver complete work to the clients within the deadline (Pitcher.com.au 2017). There are issues with the management of the organization as a result of improper organization structure. There is an increased level on inefficiency in certain departments of the organization.Acquisition Method
Operational Problems of Pitcher Partners
The most common system acquisition method of Pitcher Partners is ERP system (Pitcher.com.au 2017). Mr. Mark Hynes, client manager, business advisory and assurance have rich years of experience in the implementation of different cloud based “ERP system” (Pitcher.com.au 2017). The Enterprise Resource Planning is one of the integrated management of the actual business processes of a firm in a real-time environment. This is done through the use of software and technology. This extensive system has the capability of integrating the various aspects of the business such as supply chains, manufacturing, finance, sales, budgeting, customer services and human resources (Tarhini Ammar and Tarhini 2015). It is important to aim for successful implementation of the ERP project and the company should engage in taking initiatives for minimizing them (Tarhini Ammar and Tarhini 2015). The organization believes in the fact that the ERP system should be accompanied by significant changes in the organizational structure and the ways people work in the organization (Tarhini Ammar and Tarhini 2015). The organization should try to resolve the employee resistances, which would help them to aim for successful ERP implementation (Hunton Wright and Wright 2015). The organization should discuss the different issues of the ERP system with the vendor such as adoption errors, risks, justification and the risk criteria (Tarhini Ammar and Tarhini 2015).
It is important to prepare a systems framework for the sales procedure used in the organization. The systems process begins with the original sale documentation from the client and receives the returns. The sales journal would confirm the sale of the item or the product (Peppers and Rogers 2016). The next step is involved with the updating of the inventory and keeping the details in the inventory records (Peppers and Rogers 2016). The next step is concerned with the preparation of the credit memo, which is often provided to the customers (if required). The “amount to credit” is being sent to the Accounts Receivable department (Peppers and Rogers 2016). It is important to prepare refund check, which is given to the customers for checking. The updating of the accounting records is directly linked with the Sales Returns, General Ledger and Cash Disbursements (Peppers and Rogers 2016).
There can be number of control problems in the system. There can be lack of security in the IT systems (Kushner and Dupuis 2013). There can be confidentiality breach, which may pose serious threats to the security. The maintenance of the systems can be a great issue and it may be difficult for the organization to track the data of the company. There can be features in the system, which may not be required by the users (Kushner and Dupuis 2013). It is also possible that the company has not set any clear goals of the implemented system. It may be an issue to manage the huge volumes of data that are generated in the organization (George Haas and Pentland 2014). The system may require extra processing and hence the data may be less current as well as less valuable.
System Acquisition Method of Pitcher Partners
There can be various kinds of frauds that are possible in the system (Baesens Van Vlasselaer and Verbeke 2015). There can be asset misappropriation, which comprises of accepting cash even before it is entered in the accounting systems of the company (Kushner and Dupuis 2013). There can be hacking of the systems, which implies that computer hackers would use variety of ways to enter the computer networks (Easttom II 2016). There can be Trojan horse or cyber-harassment, which may pose serious threats to the company. The hackers may engage in spreading hoax mails, accessing unauthorized systems, engaging in data mining and sending the computer viruses (Baesens Van Vlasselaer and Verbeke 2015).
There was early development of the accounting packages was closely related to counting, writing and auditing. As opined by Cooper Ezzamel and Qu (2017) the modern profession of Chartered Accountant was originally available in Scotland. There was history of the double entry bookkeeping and there was significant expansion of the role of accountants (Cooper Ezzamel and Qu 2017). The development of the joint stock companies created wider audiences for the accounting information and investors. They did not have knowledge about their operations, which was based on the availability of requisite information (Cooper Ezzamel and Qu 2017). This fostered the development of the accounting software for both internal as well as external purposes (Baesens Van Vlasselaer and Verbeke 2015). The management accounting was used for the internal purposes and the financial accounting was used for the external purposes. There was a growing need of the independent attestation of the different external accounts by the auditors.
The adoption of the accounting software packages has come a long way. There are cases when the implementation of the accounting software can be a big challenge than the actual selection of the software. According to Englund and Gerdin (2014), the larger applications and the midmarket applications are sold through developers, resellers and the various consultants. The organizations are usually passing the license fee to the different software vendors (Cooper Ezzamel and Qu 2017). They charge the various clients for the purpose of customization, installation and the support services. The accounting software is known to produce several benefits such as efficiency in Bank reconciliation process, information retrieval and real time financial status of the company.
The Accounting software industry has proliferated enormously in the past few years in Australia and there has demand for the various “industry” specific services (Afr.com 2017). The industry is estimated to grow at 3.4% over the next 10 years (Afr.com 2017). In Australia, Xero has around 65% of the market share and Sage occupies around 25% (Afr.com 2017). The market share of Intuit is 20%. Xero has promoted its sales to a large extent and hence it has gained prominence in the country. It aims to increase the market share of the company and stay ahead of the competition.
Sales Procedure used in Pitcher Partners
There are primarily three big market players in the accounting software market of Australia namely Intuit, Xero and Myob (Ferguson Pinnuck and Skinner 2016). There was an increase in the revenue of Xero by 67%in 2016 and the company has potential to proliferate its customer base and increase the market share (Afr.com 2017). The companies are constantly fighting for dominance in the huge market. They allow the business entities to cash flow management and invoicing decisions. Intuit is trying too hard to gather the market share.
There is considerable threat in this industry and hence there have been high investments from companies like Intuit. The company is considering acquisition in a regular basis and it is in the process of increasing manpower too. Myob has valued the company at $2.34 and there is huge forecast of increase in their business value in the coming years (Business Insider 2017). Myob secures more revenue as compared to Xero. Myob is considered as the largest software provider in Australia while Xero is considered as the biggest cloud accounting Software Company (Afr.com 2017). These attributes help these companies to gain competitive edge in the given market.
There are many challenges that are being faced by the managers and the employees when using them in their day to day lives (Wickboldt et al.2015). The following issues are highlighted-
- Weak reporting system- The accounting software prevents the retrieval of data and import of data. This prevents the users to put the data inside the software.
- Lack of proper security- The software data are often accessed by the foreign parties and hence the users are often worried about the privacy of the data fed in the accounting software packages (Wickboldt et al. 2015). The firewall set up may get screwed up at times and this causes the users insecure about their data privacy.
- Lack of efficiency- There are accounting software packages that lack certain features, capability and compatibility which diminishes the efficiency of the software system.
- Poor software compatibility- There is many users who become frustrated due to the incompatibility of their accounting programs. In such cases, the users are unable to retrieve information or import information from other programs since the accounting software prevents them from doing so (Wickboldt et al. 2015).
- Lack of adequate features- There are some accounting software, which are expensive, yet they provide less useful features, which often compels the user to switch to some other programs.
It is important that the accounting system should foster the retrieval of data by using simplified means. There can be the use of data mining tools for this purpose. There should be enhanced secured access, which would prevent the third parties from gaining access to the systems. A finger print scanner or retina scanner may be useful for this purpose. The accounting software should have advanced features, which would be solved by making a high degree of customization at the time of procurement. There should be system interconvertibility so that the users can have smooth experience.
The accounting software industry is rising steadily and the current market leaders in Australia are Intuit, Xero and Myob. This paper discussed the accounting software usage of one of the firms- Pitcher Partner in Australia. The organization structure along with the system acquisition method is discussed. Pitcher Partner uses ERP system in their organization. The second part of the paper discussed the current market leaders in Australia along with the size of the overall market in Australia.
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