At the present business environment, it is most important for the managers to get right information. For this, a right information system is a basic need. In this context, this report carries out the literature review on the accounting software used in the Australia.
According to Clumps (1994), the accounting practices improve the image of the organizations because it helps the organizations to make the effective relationship with the entire stakeholders such as the general public, employees and customers. On the other hand, the regulatory environment related to accounting and related practices helps the organization to ensure the investment because it forces organizations to implement the fair accounting practice and disclose the entire data and information about the organization without making any change. For this, business organizations had started to use the accounting software package because it helps them to set up an effective strategic accounting system (Clumps, 1994).
Warren & Hutchinson (2000) said that the processes and practices of accounting include huge calculation and manual work. Hence, there is also a chance of error that cannot only affect the business practices of the organizations, but also affect the existing decision making process and accuracy of the decisions. As a result, the organization may lose its competitive advantages. Hence, these issues gave the place for the birth of accounting software to reduce the human error and improve decision making ability of the management.
As per the statement of Keziere (2009), Australian companies were faced three successive movements related to the use of Information Technology, which allowed them to handle the outstanding authenticity of IT silos. It provides an opportunity to its users to ensure the functioning of entire departments in a collective structure rather independently. It facilitated the management of companies to reap certain inconsistencies related to capacity. Therefore, it can be stated that Australian companies were also faced these movements.
Industries of Australia were realized it, when they started to use Bespoke accounting application. Bespoke accounting application was a first step that helped the organizations to go towards the automation basic accounting information system and make offices paper free (Keziere, 2009). Since, accounting systems include several general terms. Therefore, there were huge possibilities to make changes in existing accounting applications to improve the accounting practices of the organization. For example, accounting software such as bespoke software required more than 30 days to develop required functions as per the need of organizations. Due to this, the organization tried to make changes in the bespoke to ensure the fulfillment of their business needs.
According to Keziere (2009), after the use of bespoke, the company started to use some off-the-shelf application such as Tally and Peachtree because these have developed to perform more accounting business practices at a time for sharing real time information. Bespoke accounting application was not able to complete reporting related tasks. These software applications do not require huge time for the installation rather skilled employees and the companies could use off-the-shelf software after getting purchase licenses. This is because these accounting software required only couple of weeks to customize the functions and required features (Keziere, 2009). In contrast, Cairns, et.al, (2011) found that the selection of effective accounting software allows the organizations to conduct the analysis related to stock, budget, sales, annual revenue and profits within a few minutes. It also facilitates organizations to reduce the number of accounting staff and cost of accounting activities by making accurate decisions very quickly. Hence, the improvement in the needs of organization also gives the reason for the development of new accounting software.
Through different view, Halabi, Barrett & Dyt (2010) say that the accounting software at present has ability to customize the functions and update the involved features automatically. As a result, they ensure the security of the storage data, which is a most considerable area for an organization. Therefore, an organization may not get failure, if the accounting software is used by the organizations.
Nandan (2010) says differently from Halabi, Barrett & Dyt (2010). The researcher says that an organization may not be able to manage and maintain the accounting practices as per the norms of the government, if they cannot be able to address the gap in the accounting management practices or the misuse or leakage of important accounting data.
As per the statement of Kanellou & Spathis (2013), software may be used by anyone after getting one or two days training. As a result, the organization may get the quick report of financial analysis to know either existing business practices are strengthening the business or should the strategy be changed. Through the help of this, the companies may prepare itself to face the competitors in the market because after the use of accounting software; companies can do calculation related to tax along employees’ payroll timely. It will help to improve the market value and brand image of organizations (Kanellou & Spathis, 2013). In this context, the accounting software, which is offered by various companies in Australia, may help the companies in addressing the gaps in accounting practices because accounting software package does not need expertise to handle the accounting system.
Niazia, Babarc & Vernerd (2010) focus on the gap areas related to the use of accounting software. The researcher says that accounting software can be effective for an organization, if it has ability to fulfill the entire needs of the organizations. In this context, the lacks of technical experts were a big gap for the organizations that restricted organizations from the complete use of software. On the other hand, the technical experts were demanding huge money to provide the technical training for the accounting personnel, which was also created a huge gap between the needs of the organizations and objectives of the accounting software.
In the similar sense, Bisman (2011) stated that after providing minimal training to accounting personnel, the organizations can ensure the complete use of the atomization based accounting functions to reduce the possibilities related to the error. These packages were effective for the Australian companies but they had a shallow learning curve. Due to this, business organizations faced various issues during the use of tally and other similar applications because of the problem related to other departments, who were not able to perform in isolation or silos.
In the different sense, Svejvig (2011) defined about the changes in the accounting processes through the emphasis on the software development. After the growing impacts of the globalization, the government of Australia had also changed the accounting system of the companies by enforcing them to prepare actual time accounting book that can be audited by the external auditors at any time. Due to this, the organizations faced the issues related to the management of computerized accounting books. The main reason for this issue was the use of different formats of accounting by different departments of an organization. Due to this reason, the accounting management department faced huge discrepancies and they took more than three or four weeks to detect and diagnose the inconsistency in business practices (Svejvig, 2011). As a result, the organizations did not able to complete the reconciliation of the accounts at the end of the financial year, which did not only affect the new investors but also imposed the negative impact on the existing shareholders. They did not able to get valid information related to the financial condition of the organizations.
In the similar sense, Curtis (2015) states that the major issue that was faced by Australian companies after the use of the tally and other similar accounting software was its independent nature, which has increased the chaos in accounting systems of the an organization. Because of this, the various organizations faced huge problems related to inefficiency of the centralized system that increased redundancy of data, which also restricted the accounting team of an organization by presenting the real financial status of the organization.
Redrup (2016) says that there are some organizations, who are the market leaders due to their market shares. These organizations are Intuit, Sage 50 and Xero, who have acquired the most part of the Austrian accounting software market. These companies produce several multitasking accounting software to their clients. For example, the cloud based accounting software package is developed by the Xero that helps the larger company to manage the task related to accounting at each business unit and collect the data to make conclusions at a place (Redrup, 2016). The cloud based accounting software also helped the new entrant into the market to manage the entire data as per the rules and norms of the government to avoid issues because it does not require huge time in successful implementation. It also allows storing entire accounting data at a reasonable price. On the other hand, Xero also helps organizations to secure their financial information from any data breach or data hacking. Due to this, it acquires more than 60% market share of clouds based accounting software (Redrup, 2016).
In addition, research of Rose (2016) describes that Xero faces strong competition from Intuit because it offers QuickBooks software package that mainly targets small business organizations. Due to this, it has acquired 39.34% of total market share, while it faces 3.62% growth in market share due to product features, easy in use, existing customer base, and good recognition of brand name, cost, quality and reliability (CSIMarket, Inc., 2016). Sage 50 is used by small and medium business organizations because it includes a layout which allows accountants to perform entire process and activities confidently. This organization covers 10% share of total accounting software market (Rose, 2016). This organization gets competitive advantages through its cost; cloud based accounting features and user friendly performance. This software does not require any special skill or training and any person can make cash-flow analysis for the company at any time on the basis of collected information. But, the issue related to security is a big gap in the use of accounting software because anyone can hack the entire stored data anytime due to its cloud based nature.
Bisman (2011) Cite and seek: Exploring accounting history through citation analysis of the specialist accounting history journals, 1996 to 2008. Accounting History,16(2), pp. 161-183.
Cairns, D., Massoudi, D., Taplin, R. & Tarcab, A. (2011) IFRS fair value measurement and accounting policy choice in the United Kingdom and Australia. The British Accounting Review, 43(1), pp. 1–21.
CSIMarket, Inc. (2016) Intuit Inc's [Online]. Available At http://csimarket.com/stocks/compet_glance.php?code=INTU (Accessed: 10 September 2016)
Curtis, V. (2015) MYOB Software for Dummies – Australia, 8th ed. Australia: John Wiley & Sons.
Halabi, A.K., Barrett, R. & Dyt, R. (2010) Understanding financial information used to assess small firm performance: An Australian qualitative study. Qualitative Research in Accounting & Management, 7(2), pp.163-179.
Kanellou, A. & Spathis, C. (2013) Accounting benefits and satisfaction in an ERP environment. International Journal of Accounting Information Systems, 14(3), pp. 209–234.
Keziere, R. (2009) Prepare Demolish Application Silos; A case for business process management federation. Information Management, 19(3), pp. 22-24.
Klumpes, P.J. (1994) The Politics of Rule Development: A Case Study of Australian Pension Fund Accounting Rule-Making. A Journal of Accounting, Finance and Business Studies, 30(2), pp. 140–159.
Nandan, R. (2010) Management Accounting Needs of SMEs and the Role of Professional Accountants: A Renewed Research Agenda. Journal of Applied Management Accounting Research, 8(1), pp. 65-77.
Niazia, M., Babarc, M.A. & Vernerd, J.M. (2010) Software Process Improvement barriers: A cross-cultural comparison. Information and Software Technology, 52(11), pp. 1204–1216.
Redrup, Y. (2016) Xero primed to keep gaining market share in Australia, new managing director Trent Innes says [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 (Accessed: 10 September 2016)
Rose, D.S. (2016) The Startup Checklist: 25 Steps to a Scalable, High-Growth Business. USA: John Wiley & Sons.
Svejvig, (2011) A successful enterprise system reimplementation against all odds a multi-sourcing case study. Journal of Information Technology Case and Application Research, 13(4), 1-30.
Warren, L. & Hutchinson, W.E. (2000) Success factors for high-technology SMEs: A case study from Australia. Journal of Small Business Management, 38(3), pp. 86-91.
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