Benefits of Accounting Software
The literature review is on the of strategic information system on an Australian organisation. The strategic information system considered is the Accounting Software system and the organisation chosen is Woolworths. The review is done on the basis of the previous structures of company and the difficulty faced by the company for not having the Accounting information system. The review also describes about the ERP and other accounting software and the internal problems attached to it as well as the fraud that could take place by applying this system.
Woolworths was first started as a company situated in Sydney and having one basement store over there. Gradually the company started to flourish and attained a big height with the help of the investors and the correct measures of business process. The company then became one of the largest retailers first in Australia and then globally (Frederick Rose, Hawryszkiewycz and Kang 2014). As the company started to grow and their business started to flourish the accounts department became vital for them. The organisational structure of the company did not have any framework for the information system of accounting.
The works of the accounts department was done manually. Being such huge retail base company dependency on manual working can lead to a disadvantage for the company. As there are huge chances of having some error in calculation and the time taken for accounting department will be much higher. The accounting department was dependent on the excellent work of the accounting employees. As all the works were done manually therefore, more number of employees was required for conducting the accounting works (French, Guo and Shim 2014). There will be some inefficiency as well as error present in the work that might affect the process of business considerably. The implementation of accounting information software will reduce the dependency on the manual work and the work can be done double the fast rate of manual work. Moreover, number of employees could be reduced as the work is been conducted automatically.
In the field of Information Technology in Australia successive three movements took place which made an attempt of handling the business accounting process. Accounting software were developed in this revolutionary movement so that company gain some advantages and benefits. As accounting incorporates a lot of calculation as well as paper works therefore it is inevitable that some mistakes will be committed by the workers and those mistakes could be fatal for the company. Woolworths started using software like Peachtree and Tally as accounting software. Software named Bespoke was in the developing mode as it took few months before it could be applied in the organisations. Peachtree and Tally being commercial as well as custom software could be applied in the organisation. These two softwares were user friendly and it required minimal training for the account staff to get used to these softwares.
Issues Faced by Woolworths with Accounting Software
The research shows the problem faced by the accounts staff after implementing these softwares. The departments of accounts in Woolworths started using this software and made all the account books computerized. The problem faced is though the department of accounts is maintaining the computerized format but the information received by them from other various departments is completely different (Rahman et al. 2015). It was also been observed that duplicate information were been circular where the payments were already been made. Therefore, duplicate invoices were being generated due to the some inadvertent error persisting in the system. The department of Accounts started facing cumbersome task for reconciliation at the time of year end. The system also saw that there was presence of discrepancies and for identifying as well as diagnosing the inconsistency it even takes more time. Thus the centralised system is lacking and data redundancy losses are the main problems of these commercial and customised accounting information software.
As these softwares include the absence of business intelligence therefore it was needed in reduction of discrepancies and incompatibility. These software were been changed with the revolutionary discovery of software like enterprise system that incorporates Enterprise Resource Planning, Enterprise Application Integration and Business Process Management. The main aim of ERP is to integrate various several applications and procedures of accounting with mainstream of the software (Jinno, Abe and Iizuka 2017). Therefore, accounting became the most significant part of softwares like ERP and EAI. EAI aims in integrating the development effort of wide application of enterprise. In 1980 operating system like UNIX, Oracle and SQL are been used for uniting the logic but those systems are not been centralized. The invention of ERP helps in centralising the organisational system and helps in achieving the goals of business (Ahmad and Cuena 2013).
On the other hand ERP has disadvantages also. The amount of fund required for implementing the system of ERP is quite high. Moreover, if the implementation of ERP is not done appropriately then all the funds will be in vein. The rate of success in implementing ERP is low as if it is not implementing in an appropriate way it can lead to failure (Ravasn and Mansouri 2014).
The two flowcharts are been provided. One of the flowcharts is showing the manual procedures and the other flowchart is showing sales procedures using Accounting Information System. The manual procedures include billing, inventory control, accounts receivable and the ledger. It shows that it includes a lot of paper works in form of journal paper and the vouchers. The automated systems shows that after the process of customers, sales there is a process of computer operations which includes point of sale system and both the customers data and sales inventory could be merged together.
Advantages and Disadvantages of Enterprise Resource Planning (ERP)
The major problem of Accounting Information System is the data quality. It is a significant role in adoption of AIS. The data quality level for is too critical for the organisations. In particular, the data quality level is basic for all bookkeeping forms, and significantly affects business basic leadership (Xu 2015). It must be noticed that present day associations depend vigorously on the utilization of bookkeeping data frameworks for their bookkeeping forms. These days, organizations persistently try to enhance the proficiency and adequacy of their operations for higher benefit and increment profitability. There is solid confirmation that DQ issues have turned into a basic worry of associations in which the advancement of data stockrooms and the quick access of data from various sources by boss and data customers have extended the need of significant worth data in relationship to perform well, obtain high ground, and make due in today's overall economy (Porgo, Moore and Tardif 2016). In addition, accounting and organization decision-making is liable to the assault of the Accounting Information Systems (AIS) with the affiliation's necessities. Consequently, affiliation should get learning of legitimate data quality criteria for accounting information structures choice to improve work execution and what's more help relationship to make benefits.
The fraud by implementing this software includes Misuse and Misappropriation of the assets by changing the readable and recordable files of the system. It can also be done by altering the logic of computer software. The readable information can be use and copy.
Accounting is considered to be the heart of the business. Accounting software is all about the several modules of function that it contains. The function includes General Ledger, Accounts payable and Accounts receivable. Ledger generally deals with the financial aspects, account payable deals when the company is entering the bill and the money company owes and accounts receivable deals when the money is been received by the company.
There are several types of accounting software that are been used in Australia. The softwares that are been used are:
Intuit Quickbooks: It is one of the popular software that are been used in the small business of Australia. The two major significant factors that led to the popularity of the software are its price for installing and the second factor is level of comprehensive features that is been provided by the software (Keylly 2017). The owners of small business generally use this software for tracking their income in business, profits as well as expense.
Data Quality Issues
MYOB: It is also one of the most popular software in the field of accounting in Australia. The software aims to finds its utility more than that of the accounting software. The design of platform was done in such a way that it can be used to perform the accounting functions. It was been so designed that it helps to increase the profitability as well as taking better decision in the financial operation of the business. The retail business in Australia like Woolworths use accounting software like MYOB is much more useful than store register (Curtis 2015). It has Kounta interface and provides transaction by point of sale, which help in integrating the business of operation.
Reckon: It is considerably the best software for the businesses in Australia. It also helps the accountants as well as bookkeepers. It is been designed on the platform of cloud. It is one of the affordable clouds accounting software that can be adapted by the small as well as medium businesses. It provides the interface of the payment process where the debit as well as credit card could be accepted with the help of phone (Gregory 2016).
Australia is having two giants in the field of accounting business that are competing. Xero that is belonging to the neighbourhood of New Zealand as well as Quickbook online is an Intuit of US- Based. QBO has already been established globally for the last six years. However, the introduction of this software in Australia is recent. On the other hand, Xero is already been running in the market of Australia for the last three years and they are having excellent accountants. Small businesses favour the use of Xero as it communicates with the customers at a higher level. Xero in Australia has faced an exponential growth (Avital et al. 2015).
QBO Intuit has opened and launched an innovative interface in Australia with a code name Harmony. The software is been added with Australian localisation on the softwares as well as they have hired quite a few number of staffs for their offices. They are also having certified partners. They are aiming in gearing up the campaign so as to attract the small and medium level businesses.
In Australia Xero has already become the leading market segment that has acquired most of the businesses in Australia. The company already initiated a strategic decision by appointing the global executives as well as regional managers. Xero has high level of experience in SaaS finance. The company expanded the strategic partnerships that incorporate the accounting of small business on the platform of Big Four and large accounting brands within Australia (Nicoletti 2017).
Risk of Fraud with Accounting Software Implementation
The competitive advantage of Xero includes there broad ecosystem that has the solutions of third party and they are been excellently integrated with the platform of Xero. The company allows the business of small size to get adopt with the integrated solution of the business provided by the accounting software system. It continues working with close partners like Vend, Zen Payroll, Square and Receipt bank. Twenty percent of the customers of Business edition are using the applications those are add on and nearly forty percent of the business have taken the membership for the premium products (Cain 2015).
Xero being cloud base software has the challenges to keep the data securely and protect it from breaching. The clouds based software are providing immense protection and security to the significant data of businesses. The security is important as online data are vulnerable and they can be hacked or fraud that lead to the fatality of business. However, many of the organisations do not have the affordability to install the higher level of security (Correira and Alexander 2014). The workforce of the organisation should be trained regarding the software so that employee can continue to work efficiently. The advantages of cloud automation are not been taken by many companies therefore the training of staff is difficult.
The software packages should be selected after analysing the needs of the company. A software vendor is needed to excel the business. If the business is only going to operate in as sole trader only Excel is required for recording the income as well as expense.
If the business is setting up with Pvt Ltd Company then MYOB software is needed. Other software like Xero and Saasu could be implemented but there are some chances of failing in implementation of that software. Moreover both of them being online software have some chances of data theft.
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