Accounting Software and Packages in Australia - Essay Example

Accounting Software/Packages in Australia By: Name: Institution: City: Accounting Software/Packages in Australia Accounting is one of the essential elements of a business world that need not be taken for granted. Technological improvement and advancement have come up with a more diverse and efficient accounting practices unlike using manual manipulations and balancing of books of accounts (Xu et al. 2003). Many companies in Australia have embraced this new technology by use of sophisticated and more efficient accounting software and packages that include; cloud accounting software packages that comprise of; QuickBooks Online, Intuit, Xero, and MYOB( Mind Your Own Business) (Booth, Matolcsy, and Wieder, 2000). Most of the Small and Medium-Sized Enterprises (SMEs) have been in the forefront in migrating from analog accounting practices to digital ones to keep up with the increased competition in the business world. Before the year 2000, many small and large firms were complacent with the use of paper-based accounting systems until of late that GST (Goods and Service Tax) was introduced. This essay focuses on the history of accounting software/ packages, development, and adoption, current market size, challenges that face the users of these software packages, and how they gain the competitive advantage. History of accounting software/packages Each of the accounting software/packages has a distinct origin that needs to be elaborated. Cloud computing represents this accounting software and packages, which are in use globally. Cloud computing was given to birth in the year 1998 by Evan Golberg. By then, it was founded in the form of NetSuite to be a standout software in carrying out accounting practices that replaced paperwork. This was a web-hosted accounting software, which eventually gained fame all over America. Bigger companies majorly used it because of how costly it was. This marked a new beginning for a journey that would be reckoned in new future. This then spread to most of the parts of the world that were tech-savvy in carrying out businesses (Daniele and Mistilis, 1999). In 2001, Microsoft became interested in benefits that accompany cloud accounting. This led to them buying Great Plains, which was unarguably an ASP (Active Server Pages) model that had undergone evolution and survival to becoming the popular SAAS (Software as a Service). In 2009, it was the highest point of usage of cloud accounting where numerous players took shape in the market while the competition is increased due to improved efficiency of accounting practices. These key players include Sage and Coda (Booth, Matolcsy, and Wieder, 2000). It was in the following year, 2010, where cloud accounting recorded the highest amount of revenue, which amounted to 1.19 billion US Dollars. This was majorly derived from accounting segment. Australia was one of the principal contributors to this increased amount of revenue ever recorded in the history of cloud accounting. In 2013, more than 73 percent of companies made use of cloud accounting apps. This was according to data derived from Cloud Accounting Institute. More is expected in future in the rise of revenue in this field of cloud accounting (Christensen and Eining, 1991). Xero software that is used by many companies and SMEs in Australia was created in the year 2006. This was done by Xero Limited led by Rod Drury. It is online accounts software, which is cloud-based in nature, and it is geared towards achieving efficient and honest accounting services in businesses. This led to the Xero Limited buying the largest payroll provider in the entire Australia called Paycycle. This new development led to the Xero Limited carrying out payroll services on behalf of the company. It signaled a new move in computer affiliated accounting services in Australia, which was to shape how people viewed accounting at large (Daniele and Mistilis, 1999). The same company went ahead to acquire online accounting jobs from various small and big businesses in Australia. Invoice management solutions were also in the forefront when it came to the introduction of a more sophisticated software called WorkflowMax, which was created in early January 2012. Xero is nowadays offering business accounts software not only in Australia but also cutting across many countries in the world. Many accountants have recommended the use of Xero accounting software in carrying out accounting practices that would have been tedious when dealt it using manual procedures (Xu et al. 2003). Xero accounting software is usually sold in the form of subscriptions. In each year, high sales are recorded in Australia due to the adoption of computers in the accounting industry, which has replaced paperwork. It is accompanied by wealthy features that come in handy for any professional accountant (Booth, Matolcsy, and Wieder, 2000). The biggest worry is that this would replace accountants hence cutting off their number by more than a half. In the positive side, efficiency is enhanced in accounting field with fewer errors, which would have been costly in an organization. Third parties have also gained interest in Xero software whereby more than 275 of them have created add-ons on this marvelous accounting software (Daniele and Mistilis, 1999). Development and Adoption of Accounting Software/Packages This accounting software has been integrated and adopted at a faster rate, more than expected, into the system in Australia. Regardless of the size of the business, utilizing computerized accounting systems is more efficient and reduces errors that might have arisen when manual manipulation was put in place. MYOB is a large accounting platform and software whereby a customer from different walks of life; either around Australia or other parts of the world, would connect, and be helped in accounting services (Shanks et al. 2000). This accounting software was developed to quench the insatiable thirst that was figured out in many companies in Australia. MYOB, being recognized as the largest company in the accounting field in Australia has been in the forefront in investing in development and in-depth research to improve accounting services that are availed to its customers (Lai, 2008). As seen earlier in this discussion, Xero accounting software was created by Xero Limited as an initiative to control payroll services in Australia. This was somehow achieved even though competition piled up as a result of the adoption of more contradictory accounts software/packages from other companies across Australia and other parts of the world (Christensen and Eining, 1991). Current market size and major players in Australia Accounting field has grown drastically over the last decade. This has then led to the adoption of computerized methods of carrying out accounting manipulations and practices. The three major players of accounting software have been in a faceoff to prove their might in recent past in Australia (Booth, Matolcsy, and Wieder, 2000). In 2015, MYOB confirmed its details of IPO, which then worried its rivals. The current market is huge hence need for each player to pull up their socks to gain the most from such a market. Each business in Australia is at its feet to ensure it keeps track of its accounts hence the justification for the existence of these companies (Daniele and Mistilis, 1999). Currently, MYOB boasts of a larger share of the market while it experiences piled up pressure from rivals such as Xero and Intuit. Xero boss Rod Drury has been caught up in the limelight by accusing MYOB of leaving out crucial details from its prospectus in 2015. This shows how the rivalry has taken a new turn. MYOB has been at the forefront of maintaining market share while putting its IPO price between 3 to 4 dollars (Xu et al. 2003). Xero, on the other hand, has had more than 40,000 active customers across more than 180 countries spreading across the world; in both developing and developed countries. Entry of new accounting software companies to Australian market has brought up a more competitive platform. Recently, Intuit, an American-based company made it into the Australian market. There are possible ongoing talks between MYOB and Intuit, which have been seen by many people as a potential gesture of merger (Christensen and Eining, 1991). Each accounting software company has its unique ways of maneuvering the market to get the best out of it. Currently, the major threat lies majorly in competition to win a bigger share of the market. MYOB makes use of advertising to reach wider customer base hence increasing its sales. This leads to it consistently maintaining high market share as compared to the other companies (Booth, Matolcsy, and Wieder, 2000). Xero has turned to appointing a leader who spearheads successful business operations. This led to the appointment of Russ Fujioka, who has a record of accomplishment in building unique brands. This strategy is directed towards achieving the best and gaining bigger market share. The addition of Graham Smith into Xero’s board meant a fortune for Xero’s performance keeping in mind that MYOB has been running the market (Shanks et al. 2000). Challenges faced by users of accounting software/packages There are challenges faced by companies or individual users of these packages. These packages are not usually user-friendly while they are difficult in customizing (Arora et al. 2001). Users find it hard to perform tasks based on their preferences. Some of the systems used in accounting software are obsolete hence; they are not useful when it comes to carrying out current practices (Christensen and Eining, 1991). The cost of these accounting packages is also high hence; many individuals who would like to use them shy away. Some accounting packages lack required efficiency hence many business owners do not get attracted to them. They need things to be carried out inconvenient time and the shortest period so as not to interfere with their business (Daniele and Mistilis, 1999). Recommendations for dealing with such challenges I recommend that customers should be trained well in using this software. This means that each company should dig deeper in facilitating such awareness in order for the users to benefit from them. This would also lead to increased sales of such packages in Australia and other countries across the world (Booth, Matolcsy, and Wieder, 2000). The cost should also be made affordable for all the users to access these services. There is no need of very significant profit margin while the users who are meant to benefit are faced with difficulty in assessing such versatile packages (Burritt, 2004). Many are willing but are not in a position to acquire such services. The software engineers should come up with better features, which would enhance the user-friendliness of accounting packages by allowing customization to customer specification (Christensen and Eining, 1991). Conclusion Adoption of computerized accounting services has brought efficiency in the accounting field. There are three major players in cloud accounting sector in Australia; these include Xero, MYOB, and Intuit. They are yearning for a bigger share of the market. Each of them ensures that it is at its best to achieve this. MYOB takes on advertisements and publicity in order to maintain larger customer base while Xero has turned to changing leadership to put on board leaders who have a different perspective that would push the accounting software forward. These leaders include Russ Fujioka and Graham Smith. However, users of these accounting packages face challenges including non-user-friendliness of such software and the high cost of obtaining such services from the companies involved. References Arora, A., Arunachalam, V.S., Asundi, J. and Fernandes, R., 2001. The Indian software services industry. Research policy, 30(8), pp.1267-1287. Booth, P., Matolcsy, Z. and Wieder, B., 2000. The impacts of enterprise resource planning systems on accounting practice–the Australian experience. Australian Accounting Review, 10(22), pp.4-18. Burritt, R.L., 2004. Environmental management accounting: roadblocks on the way to the green and pleasant land. Business Strategy and the Environment, 13(1), pp.13-32. Christensen, A.L. and Eining, M.M., 1991. Factors influencing software piracy: Implications for Accountants. Journal of Information Systems, 5(1), pp.67-80. Daniele, R. and Mistilis, N., 1999. Information technology and tourism education in Australia: an industry view of skills and qualities required in graduates (pp. 140-150). Springer Vienna. Lai, M.L., 2008. Technology readiness, internet self-efficacy and computing experience of professional accounting students. Campus-Wide Information Systems, 25(1), pp.18-29. Shanks, G., Parr, A., Hu, B., Corbitt, B., Thanasankit, T. and Seddon, P., 2000. Differences in critical success factors in ERP systems implementation in Australia and China: a cultural analysis. ECIS 2000 Proceedings, p.53. Xu, H., Horn Nord, J., Daryl Nord, G. and Lin, B., 2003. Key issues of accounting information quality management: Australian case studies.Industrial Management & Data Systems, 103(7), pp.461-470. Read More