Introduction – Accounting packages
Introduction – Accounting packages of Master of business administration In a new era every bit of business world is affected by the change in technology. Due to rapid growth in the market a new term is becoming popular in business. It is called accounting packages. It came into existence due to change in the size of business. Now the volume of recording the accounting entries is very large and it becomes a challenge in front of financial controller to how they record these transactions. Accounting packages gave an answer to this problem. Accounting packages is term used for record the data in Computer. It also assists the option to generate a accounting reports in it. There are different categories of accounting packages available in the market. These all are a set of accounting software those specifically prepared to satisfy different types of business needs. (Sale, 2003)Woolworths is a very well known name in the retail of supermarket in Australia. The use of accounting software makes their work more associated and more transparency of results can become possible through the use of accounting packages for maintaining their financial records. (Woolworths, 2017) There are much noticeable advancement in information and technological field. But since there are some issues in the use of accounting software these become a obstacle in the transparency results of financial reports and system. In the following few paragraphs it will be discussed that how these package developed and how these approaches helps to find out the various problems in use of it. Further it also suggests some ways through the example of selected Company that how they can improve their efficiency of accounting software.
Literature Review – The analysis of literature shows the ideas and theories of different researchers. These theories help to find the development stages in accounting software packages used by Companies.
It is belief that Computers for using accounting purposes has been long time ago. But the form of computing was far different from today’s modern type of technology for keeping the accounting records. In the early 1800 the punch card was used to compute the entries and it was known with the name of abacus. After that in 1945 the ENIAC was developed to deal with the financial data. (Computing history, 2016)
The computation of financial data was started with the development of arithmetic numbers. The first computer used for accounting entries was in 1955. (Scott, 2015) Italy is known for the origin of accounting software and after getting success in Italy it became demanded by the Other Counties. In 1980 IBM is known Company in the information technology field brought a revolutionary change in the accounting world with the introduction of Computers at a large level and it initiate the idea of using computers for preparing trial balance for the financial accounting. But it does not bring a complete revolution in accounting field and still there was a long way to go for bringing the complete use of accounting software for preparing and recording the financial records of the Company. In the year 1987 TURBO was developed by the South Africa and it causes a reduction in spending time for preparing ledgers under a manual system. The vast developments in the technological field results in improved form of software for maintaining financial records of the Business. In today’s business world the fully developed accounting software is used as a management tool for reviewing the financial position of the Business.
Windows brings a more developed form of accounting packages and after that there was need arises to develop a accounting software those can use for computing taxation purpose as well. The another feature added in the accounting software is preparing trial balance and balance sheet with the complete use of accounting packages. (Ryan, 2012)
As in case of Australia until 2000 the most of accounting entries were recorded with manual accounting system. But after that new change in the accounting world was to initiate the use of computer for preparing financial statements. It helps to reduce the time and cost of computing accounting entries with the help of accounting packages. It improves the overall efficiency of accounting statements and it also facilitates to trace the financial entries at any time. (James, 2013)
With the revolutionary changes in telecommunication Industry the newly added feature in the use of accounting packages is to transfer the data online to any other source and networking of computers makes it possible to connect with any system at any time. It is an important feature of accounting packages those facilitates the auditors for auditing of financial statements. There are varieties of accounting software available for the users to recording and preparing their financial reports in Australia. Intuit is launched in Australia by American Company and it started its business from Zero and raised up to 33,000 customers for their software packages. The reason behind the users of accounting software is customers shifts their interest from windows to cloud computing for improving their efficiency for producing financial reports. (Adhikari, 2015)
Xero and MYOB are also popular accounting software in the Australia. Xero originates in New Zealand and its fastest growing Company in the Global market. Xero and MYOB are the competitors in the Australian market. Xero has a more than 2, 62,000 customers and the market share of the Xero is nearly 15% in the Australian market. Cloud computing raises the scope for software users in Australia. (Redrup, 2016)
The above analysis of the developments stages of accounting software and discussions on the use of different types of accounting software highlights the market analysis of accounting packages.
Advantages for using Accounting packages – Accounting packages of Master of business administration with the help of accounting packages the financial statements become more reliable and accurate as compare to the past.
Easy access to the various reports at any time make it possible for the business personnel to make right overview for the financial position of the Company and conveys the information about where business stands and what efforts can be do to bring efficiency in the business.
Cost and time efficiency has been improved with the help of accounting software and improves the efficiency of preparing financial statements. It also assists the auditors or accountants by generating a trial balance and balance sheet on a daily basis.
Accounting packages records the transaction in a very less time and makes it possible for the business enterprises to deal with the bulk of transactions. It is an important tool for expansion of business in a worldwide. This is reason of more growth in the international market scenario of the different Companies.
Challenges for accounting software users – There are different types of challenges increased due to advanced developments in the field of accounting software. These are discussed as follows –
- Change in the Technology. It is all known that technology has been changing day by day. It can cause a obsolensce of current technology based software in the Company. Thus it fails the purpose of using accounting packages and shows a false or wrong presentation of accounting statements.
- The use of accounting software also raises a issue or risk to assess the accounting data by the external users. It can harm the Company very badly and results in closure of the Company operations. Disclosure of financial data to external parties may cause serious issues for the business.
- To work with the accounting packages there is need to employ a highly skilled workforce and it increases the cost of maintaining the financial statements. Especially for a medium to small sized business organizations it is not possible to acquire the services of specialized personnel.
- Another challenge for the accounting users is that it becomes hard to compare the financial data of different organizations due to lack of common software.
The above discussion shows the list of challenges faced by the different Companies and brings inefficiencies in the accounting statements.
How to choose a suitable accounting package for business – Accounting packages of Master of business administration The reliability and accountability of the software is depends upon the selection procedure for selecting suitable accounting software for a Company. The selection process for choosing a suitable accounting package follows a various steps. These are discussed as follows –
Nature of the Business – The selection for accounting package is based on the type of nature of business. The accounting packages are prepared according to the needs of different types of business enterprise. So it is first factor need to be considered for selecting a accounting package for business.
Cost effectiveness – The another important factor for choosing a accounting package depends upon the analysis of cost and benefit related to the different packages and select a cost effective software package for the Business.
Suggestions for Improvement – There is always a way to bring improvements in the use of accounting software’s. These are discussed as follows –
- To improve the accountability and efficiency of the accounting information it is necessary to review the accounting software’s at a distance of time. Because technology is the fastest move in today’s world. Time to time review of accounting packages make it possible to upgrade the system as and when required. The use of outdated system may affect the efficiency of Business and also causes a wrong presentation of accounting information.
- To maintain a stronger control over the financial aspect of the Company there is need to make amendments as when there is need arises in the business environment. It helps to provide the information required to run the business smoothly. For example to improve the efficiencies of Aldi there is need to implement a system which helps to assess the information of different stores at a same time and helps to produce a integrated accounting information for the Company.
- To choose a accounting package there should be analysis of company requirements so that selection of accounting package helps to accommodate the needs of the Business and formulate a more stronger results for the Company.
Conclusion – Accounting packages of Master of business administration The complexity in the business world causes a development in accounting software packages in market. With the increase in the market size and it raises the requirement for accounting software so that recording of accounting transactions can be make it easier. As there is example of Aldi who has expanded its business rapidly in the Australian market. There was need to connect the accounting information of different stores so that reliable financial statements can be prepared at the end. MYOB, Xero and Intuit are the popular forms those offer a different types of packages for maintaining a control over accounting system of the business. The use of these software’s facilitates the fastest process of recording and maintaining a financial statements and it makes the system cost and time effective. This eliminates the financial errors in computing the financial data of the Company. The aim of the every Company is to improve the reliability and accountability of the financial statements. With the new technology there are some issues raised in accounting software like the accuracy of financial report depends upon the recording of transaction and if it is not caught at the initial stage then it may cause the wrong overview of financial statements. The choice of using a accounting software is depends upon the nature of the business. The accounting software packages are designed according to the needs of different types of users. The wrong selection of accounting package may cause to the closure of business operations because it causes the wrong presentation of financial position of the business.
- Timothy Sale, 2003 “Advances in International accounting” published by Elsevier in Oxford, UK.
- Woolworths, 2017 [online] available at http://www.woolworthsgroup.com.au/page/about-us/ assessed on 20.04.2017.
- Computing History, 2016 [online] available at “http://www.aussieeducator.org.au/reference/history_computer.html#history” assessed on 21.04.2017.
- Ben Scott, 2015 [online] available at “https://www.myob.com/au/blog/60-years-of-accounting-software-introduction/” assessed on 21.04.2017.
- Eamonn Ryan, 2012 “The Evolution of Accounting software: Past, present and future” published by The Journal of the Global accounting Alliance.
- Daniel James, 2013 [online] available at “http://www.bit.com.au/Review/344651,7-accounting-packages-for-australian-small-businesses-compared-including-myob-quickbooks-online-reckon-xero.aspx” assessed on 21.04.2017.
- Supratim Adhikari, 2015 [online] available at http://www.theaustralian.com.au/business/business-spectator/intuits-australian-customer-base-starts-to-takes-off/news-story/1c51e80fdc06cba6af1d54141f76a5f8 assessed on 22.04.2017.
- Yolanda Redrup, 2016 [online] available at http://www.afr.com/technology/xero-primed-to-keep-gaining-market-share-in-australia-new-managing-director-trent-innes-says-20160106-gm0b08 assessed on 23.04.2017.