Study on Major Accounting Softwares in Australia

Question: Disuss about the Study on Major Accounting Softwares in Australia. Answer: Introduction As different business ventures are striving hard for expansion the requirement to supervise cash flows is at the highest priority in an organization and no negligence is accepted, and managing numerous transaction in a day has become a very tedious task. Hence need for comprehensive accounting solutions was paramount for such area. This report talks about the various accounting solutions available in the market their functionalities, differentiating factors, their current market share, pricing, additional support through the Add-ons and the use of accessibility and customer friendliness. Accounting solutions have continuously evolved from DOS based to Offline solution providing Basic functionality now to cloud computing which provides an extensive variety of services and modules to integrate cash transactions with other business operations such as making payments to receiving payments, Inventory management, automated scheduling of payments etc. Not all business require all the features this report helps in understanding the various solutions available and choosing according to the needs. History, Evolution and Adoption of Accounting Software/Packages Footprint of accounting can be traced back to 13Th century in a town known as Genoa, Italy where the first double entry system of accounting was recorded. It was invented when the business from ancient Egypt started migrating to Europe and the western part of the world (Lewis, 2014). This knowledge was needed because increasing trade led to the business expansion so much that it became impossible for one single person to handle it. It was paramount to have a system where transactions can be recorded by multiple people working in the same business to monitor the cash inflows and outflows (Previts, Walton, and Wolnizer, 2012). It was then fine-tuned in Venice and became popular after Lucia pacioli father of accounting published a book Method of Venice where he discussed about three books of accounting: The Journal, Ledger and memorandum book. For over 800 years the system kept evolving and the technological development was very minimal (Carlton, 2010) In Mid 80s IBM launched its PC which was the start of the digital era, subsequently the first accounting software known as TURBOCASH was launched in South Africa with an automated system for income statement, balance sheet and trial balance. The lengthy process of combining ledgers which took approximately 15 days came down to few minutes but it had some flaws. For example, it wasnt capable of computing tax nor was capable of generating invoice for the clients and above all it was not a part of machine learning hence, unable to think. Since, the software package was programmed on DOS it was highly stable but lacked the capability of updates it was Microsoft when launched Windows OS updates became a regular feature (Computerized Accounting Systems Technologies QuickBooks, 2013). In 1990, company known as pastel started selling the updated version of turbocash which included customer invoicing, functionality to calculate tax, supplier and inventory management etc. the software went on to become the market leader acquiring 80% of the software market in south Africa. The evolution in software package since then has been tremendous. (Steven Cohen, managing director of Softline Pastel). (Scott 2015). The evolution in 1990s was low because the packages never had the capability to interact with the key elements in the business, like sales, CRM activities, marketing activities and various others. That is when these software packages started acquiring functionality of basic ERP systems and adding payroll management, tax liability and inventory management to interact with the basic core backend operations of the business (Deshmukh, 2011). The second wave of change in the accounting systems came with the introduction of Internet and mobile devices, now known as cloud computing or software as a service with the introduction in WLAN cable networks are no more the bench mark of service catering and everything has been so interconnected that it has facilitated internal audit departments (Bromwich Bhimani, 2014) such as in banks to connect in a much efficient manner for transaction and audit requests in a highly secure environment (Bhansali, 2016). Major players in Australian Accounting software market (5 best small business accounting software in Australia, 2015) Xero Intuit QuickBooks MYOB Saasu Sage The current leader in the Australian market is MYOB acquiring more than 58% market share and serving more than 116000 clients followed by Zero with 24% market share followed by intuit QuickBooks 12% and balance is taken by others players like Saasu, Sage and Reckon. There are approximately 2 million small businesses which use software solutions but only 375 thousand use the cloud based service so it poses a huge opportunity for these software giants in order to capture the uncaptured market. (Heber, 2015). Xero: It is a cloud based platform that collaborates between various team members, departments and accounting processes, the need for calculators to make calculations is eliminated, manually entering the transactions from ledger is also gone as the software automatically pulls the data from the bank feeds and compile them in seconds. The company currently serves more than 150 000 customers which is 96% increase in last 2 years. The software also lets you check the cash flow in real time, with functionality to collaborate online data with that of offline database. It boasts the capability of enabling online payments add business invoices. The main advantage of Xero is it lets you integrate major cloud based apps using its huge add-ons community. Price starts at $25/month for the basic package and $50 for the advanced version. MYOB: It is the leader in Australian software solution market catering more than 100000 customers, it was slow to enter in the cloud based system which Xero used to its advantage and capture significant share. But it has been fast to cover up as of now 70% of the business comes from the online business which is good but the functionality is particularly low as compared to that of other softwares like QuickBook and reckon. MYOB provides the user with interface to integrate the data from the offline database created using different softwares. The trend in the cloud is still emerging and company is doing enough to capture it, it is focused more in the Australia and New Zealand market and small add-on community may not give all the integrations you need. MYOB price starts from $29/month and more features like stock tracking and invoice billing price is $43/month. QuickBooks Online: It is a cloud accounting software developed by intuit and currently global leader with 75% market share. QuickBook is very successful in US, UK, Europe Africa but doesnt have significant market share like Xero and MYOB. The product is globally renowned for its usability it gives very easy access to the basic functions which are difficult to perform in other packages also comprehensive detailed report functionality, in depth audit trail in software package which seamlessly connects the smaller packages used by the clients gives it an edge. QuickBook price starts at $15/month for basic, Essential version is for $25/month and Online Plus for $35/ month. Other accounting softwares available in Australia Reckon: Another local Australia/New Zealand solution package with its payment platform of reckon pay it gives additional functionality to accept payments on the mobile phones. The business which function on POS transactions it is a comprehensive solution for them. Freshbooks: very simply software to use, preferable for one-man businesses, freelancers and companies with small operations. Saasu: It has taken the accounting solutions a notch above offering additional due diligence reports for the businesses, customized invoices as in when required. For the businesses requiring such functionality this is the perfect solution at a price which is very competitive. Gap Analysis Recommendations Due to the recent incidents of Data leaks customers are in constant worry about cyber security threat, financial data being the most sensitive data of any organization online software packages must try harder and find out new ways to increase the security of the packages through encryption or by adding additional firewalls. There is constant need to invest excess cash in the securities which needs through analysis of the companies hence lot of financial data is required for the same, softwares like ace equity provide such databases it would be helpful for the customers if such functionality can be added to link such softwares into the accounting packages, or additional database may be maintained by the companies. Not many softwares in the market provide the integration of Data from the offline database to the online cloud based platform which makes it significant difficult for the customers to transfer the data from one medium to another, hence companies must try and develop ways to extract the data from various offline databases. Softwares like QuickBook are very easy to use but lack complex functions, whereas Xero has additional functionality but difficult to understand. A right balanced software with ease of usability with significant utilities must be developed in order to capture the market. Stock analysis widely used by small business who wants to invest in securities but doesnt want to hire an investment manager for the same, tips about the various stock movements, 52 weeks high and low, stock tips are widely required. Software companies can cash on this to create a differentiating factor from other packages available. Conclusion Each and every product has their own advantages and disadvantages their individual set of functions which may not be suitable for every organization hence the organizations must go through the offered functionalities which help them choose the right one. If they want the basic functionality with the ease of usability Quick book is the choice and market leader in the global market, for the balance between the two Xero would be the right choice where as if the basic function plus huge add on functionality MYOB should not be a tuff choice. Other functionalities like POS transactions reckon and softwares like sage and Freshbook are the choices to choose from. References Scott, B. (2015). The Accounting Journal: Accounting Software Grows Up. [Blog]MYOB the pulse. Available at: https://myob.com.au/blog/the-accounting-journal-accounting-software-grows-up/ [Accessed 30 Aug. 2016]. Anon (2015).5 best small business accounting software in Australia. Available at: https://www.advisoryhq.com/articles/5-best-small-business-accounting-software-in-australia/ (Accessed: 31 August 2016). Computerized Accounting Systems Technologies QuickBooks 2013. (2016).History of Computerized Accounting Systems Technologies. [online] Available at: https://568389526522580108.weebly.com/history-of-computerized-accounting-systems-technologies.html [Accessed 31 Aug. 2016]. Deshmukh, A. (2011).The effect of Internet and ERP on Accounting. Erie: Penn state university, pp.11-27. Previts, G., Walton, P. and Wolnizer, P. (2012).A global history of accounting, financial reporting and public policy. Bingley: Emerald. Bromwich, M. Bhimani, A. (2014), Management Accounting Pathways to Progress, CIMA, London Carlton, CJ, (2010), How to Select the Right Accounting Softwareà ¢Ã¢â€š ¬Ã… ¸, Journal of Accountancy, vol. 188, no. 3,pp. 61-69 Lewis, J. (2014).The Book You Need Before You Buy That Accounting Software. Cork: BookBaby. Bhansali, C. (2016). Revolutionizing The Accounting Industry Through Cloud Computing.siliconindia magazines. [online] Available at: https://www.siliconindia.com/magazine_articles/Revolutionizing_The_Accounting_Industry_Through_Cloud_Computing-IKQI203807594.html [Accessed 1 Sep. 2016]. Heber, a. (2015). The cloud accounting supremacy war in Australia.business insider. [online] Available at: https://www.businessinsider.com.au/charts-the-battle-for-supremacy-in-australias-cloud-accounting-market-2015-4 [Accessed 1 Sep. 2016].