Accounting Software: Packages In Australia Assessment Answers

Introduction:

Accounting software or packages refer to the types of application software which commemorate a process of accounting dealings in operational modules that include payroll, accounts payable, trial balance, and accounts receivable. It operates like a reporting information scheme (Business review, 2014).

The accounting software has been considered to make work easy in accounting firms that operate on a daily basis. With the accounting software or packages, a firm is likely to serve many customers at a given time and, hence saving time. Among the kind of enterprises that use accounting software or packages include banks, insurance companies, and credit companies. Other organizations include hospitals and learning institutions (Curtis, 2013). 

History, Development and Adoption of Accounting Software/Packages

As years go by, the more financial reporting relies on computers for almost every accounting task in our daily operation. Computers are the ones running our industries in the most efficient way and have enhanced worldwide communication in accounting. The primary time computers were used for accounting purposes is 1955. Examples of accounting software or packages that have been used in Australia include Mind Your Own Business (MYOB), Intuit QuickBooks, Xero, Saasu, and Quicken. The first companies to use these packages were the ones that developed them as mentioned above (Marsden, 2014).

Mind Your Own Business (MYOB) was developed and first used for accounting services in the 1980s. The idea of the software was initiated by Christopher Lee and his team of programmers at Teleware Inc. who worked as a team and came up with the software.

Intuit QuickBooks on the other hand, was developed in 1983 and that is the time it was tested. The first release could not operate well as double-entry accounting software. Its version was DOS that used quicken code bases. It was effective for private enterprises that did not have formal financial reporting. However, the second and subsequent editions were modified and it became most effective for all the accounting needs.

Other packages like Saasu, Reckon, and Xero also came up. Saasu was developed in the year 2000 by Grant Young and Marc Lehman on the grounds of automating enterprises. Its abilities include inventory services, the point of sale, payroll, workflow and document control, CRM, and purchasing (Smith, 2015). Quicken was developed in 1987 by Reckon software company to offer digital and cloud-based solutions for accounting. Xero software was developed in 2006 and aimed at enhancing the small business in accounting.

Initially, few companies adopted the use of the accounting software because the majority of employees lacked the knowledge of operating them. However, accounting had strictly relied upon physical books. When most firms realized that their records could not be safer in books, they started adopting to the use of the software to facilitate cloud-based storage of data. Sharing of information became very easy and the businesses saw the need to use these packages. Automation of records became an enjoyable and secure way of handling business transactions. Thus, the accountants could prepare various records easily, share and print as soon as possible. 

The Current Market Size

Different accounting software or packages have different market share depending on their marketing potential and strategies. The strategies include market mixing, segmentation, positioning among others. However, other factors associated with cost and user-friendliness are taken into consideration.

Mind Your Own Business (MYOB) has invested the range of 13 to 16 percent of its earnings in financing software research and development hoping that its cloud services and products will enhanced than Xero’s who is the key competitor. The marketing and sales team of Mind Your Own Business has ensured that its market share grows by 10 percent in each year hence increasing consumerism of the package. Currently, it has approximately 528,000 customers who are paying for their software around the globe. The client’s base in Australia only, is estimated to be 250,000 customers who are paying for the software and this number is expected to grow in the next year.

Currently, Xero accounting software has a market share of 262,000 Australian users. However, the new managing director has assured that it will take part of the marketing share from their key competitor Mind Your Own Business (MYOB). Xero’s strategy focuses globally while that of Mind Your Own Business has a focus on local excellence in accounting services but also operates internationally. Xero has more than 10,000 partners who have enhanced its outreach. The Saasu, Quicken and Intuit Quickbooks share the remaining market which is estimated to be 30 percent of the entire market share.

The Key Market Leaders

In Australia, the following are some of the popular accounting software: Mind Your Own Business (MYOB), Intuit QuickBooks, Xero, Saasu, and Quicken. However, due to distinguished potential and marketing techniques, Mind Your Own Business (MYOB) and Xero are the leading because they take up 70 percent of the market share while the remaining the 30 percent is taken up by the other companies. (AdvisoryHQ, 2016).

Many factors have favored the Xero and Mind Your Own Business (MYOB) to succeed in attracting a big market share. Some of them are discussed below.

Reliable Partners

Partners play a significant role facilitating the operations of these companies and enlarging the outreach of their products. Since they have reliable partners such as banks and learning institutions, they are able to train the staff and students on how the software is used and its importance. In the process, the staff will see the usefulness of their product and have a desire to use. Students will also act as future agents of marketing in various ways. First, they may suggest using the product in places they will be employed or refer other businesses that are upcoming (Hohpe & Woolf, 2014).

Creative Market and Sales Team

The companies have a dedicated sales and marketing department which function as a team. The team attracts many customers by giving them good offers. For instance, both companies give new users a trial version of the accounting software which takes more time than the one offered by the other small companies. Having a dedicated sales and marketing department is what drives them most.

Challenges Facing the Accounting Software Users

Compatibility of the Software

Several users get disappointed since their financing software is not friendly with the programs they have on their computers. For instance, it can be difficult to import certain data or information into their programs they are most familiar with like Microsoft Word or other writing programs. Sometimes, a client may not import information from other software programs to the accounting software which is again a concern (Simkin, Rose, & Norman, 2015). 

Sustenance

 The process of how to maintain the accounting packages not only entails doing an upgrade to the software but further sustaining and improving all the key requisites to use the package because new versions demand an improved equipment. The equipment can be a laptop or desktop computer, modem, internet connection, backup drive, printer, operating system, and monitor (Bourke, 2014). 

The Cost

The price of the accounting software is not the exact cost of using it. An accounting package needs minimum measures or specifications for computer usage regarding Random Accessed Memory (RAM), hard drive memory and processor speed. The software may also need technical support which can raise its cost. However, the package may require yearly fees for licensing so that one is able to get upgrades. If one is also not skilled in software installation, will incur other expenses (Accounting web, 2015).

Recommendations

As far as accounting is concerned and has taken a big part in the current economy, it has to be improved and easy for everyone in the industry. In this way, every firm and accounting professional will easily adopt the accounting software (BusinessIT, 2016).

However, when the software is developed, the following factors should be taken into consideration. First, the maintenance requirement; most users find problems when upgrading to newer versions. As everyone is not conversant to technical skills, the software companies should look for ways of improving the software and retain its minimum requirements for operation of the software program (Australian Computer Society. (2013). In many instances, upgrades require improvement of the computer which is much expensive than the software itself. Secondly, software compatibility; accounting software should be compatible with lowest specifications possible to ensure many professionals and firms are using it effectively because not all the individuals will afford computers with high specifications. Lastly, the cost of the software; as usual, the developers of the accounting software should ensure the value of their product is not higher than the cost of maintaining and operating (The Business Victoria, 2016).

References

Accounting web. (2015). The biggest challenges facing accountants in 2015, the sector’s leading suppliers speak. Retrieved from: https://www.accountingweb.co.uk/community/industry-update/the-biggest-challenges-facing-accountants-in-2015-the-sectors-leading

AdvisoryHQ. (2016). 5 small business accounting software in australia. Retrieved from: https://www.advisoryhq.com/articles/5-best-small-business-accounting-software-in-australia/

Australian Computer Society. (2013). The Australian computer journal. Chippendale, N.S.W., Australian Trade Publications

Bourke, J. (2014). Communication & technology. Greenwood, WA, Ready-Ed Publications.

BusinessIT. (2016). Make technology work for your business. Retrieved from: https://www.bit.com.au/Review/344651,7-accounting-packages-for-australian-small-businesses-compared-including-myob-quickbooks-online-reckon-xero.aspx/2

Business review. (2014). Thailand's Leading Bussiness Magazine, Volume 13, Issues 153-157

.Retrieved from: https://books.google.com/books?id=KKkHq45U24cC

Curtis, V. (2013). Getting started in bookkeeping for dummies. Hoboken, N.J., John Wiley & Sons. https://rbdigital.oneclickdigital.com.

Hohpe, G., & Woolf, B. (2014). Enterprise integration patterns: designing, building, and deploying messaging solutions. Boston, Addison-Wesley.

Marsden, S. J. (2014). Australian master bookkeepers guide [2009/10]. North Ryde, N.S.W., CCH Australia.

The Business Victoria. (2016). How To Choose The Best Accounting Software. Retrived from: https://www.business.vic.gov.au/money-profit-and-accounting/financial-management-set-up/How-to-choose-small-business-accounting-software

Simkin, M. G., Rose, J. M., & Norman, C. S. (2015). Core concepts of accounting information systems.

Smith, H. N. (2015). Xero for dummies. https://www.books24x7.com/marc.asp?bookid=82578.