Literature Review- Literature Review -Research Reports Assessment Answer

Literature ReviewAssignment

Assignment Task

The literature review would be on accounting software/packages used in Australia. The research would cover history, development and adoption, the current market size, identify the leaders in the market and what gives them the competitive advantage. Students are also required to identify the current gaps or challenges encountered by users or customers of accounting software/packages and make relevant suggestions or recommendations.

Abstract

The use of accounting packages is vital in the current competitive business market. Some of the software includes Intuit QuickBooks, MYOB, Xero, Quicken, MoneyWorks, Reckon, and Saasu. However, the users of these accounting packages are faced with numerous challenges. The selection or implementation of an effective accounting package from among the many versions is a challenge to many consumers. Lack of external guidance, user confusion, lack of accounting skills is reported to be the major issues facing small-scale and medium businesses in the process of using the accounting software. However, external consultancy, training, and research can be of significance in helping to solve these challenges.

Introduction

The use of accounting packages has become a primary part of every small, medium, or large business. Accounting software, also known as the Accounting Information System (AIS) is software which processes and records different accounting transactions in business. It may be developed within an organization, purchased from a third party, or may be a combination of both local modifications and a third party application software. In the current competitive and technological market, the use of accounting packages has made enormous technical advances that are fast, powerful, sophisticated, and flexible for use in the accounting environment (Nah & Delgado 2010, P. 99). This paper presents a detailed analysis of the accounting software used in the Australian market. It examines the history, development, and adaptation of the packages, the market condition, and the competitive advantage of the market leaders. It also examines some of the possible challenges that are facing the customers and suggestions for improvement that can be adopted to improve the use of the accounting packages.

Over the years, different manufacturing companies and software suppliers have designed more innovative features to the accounting packages. For instance, Ismail and King (2011, p. 14) note that web interfaces, as well as better integration designs that are compatible with supply chain applications, have made some of the software more useable for both accountants and non-accountants. As a result, different accounting packages have been adopted in different federal states depending on the accountancy functions that are required to be fulfilled. In Australia, the use of Intuit QuickBooks and MYOB has dominated the market despite the use of other packages such as Reckon, Xero, Quicken, Saasu, and MoneyWorks. Even though MYOB and QuickBooks are more expensive than other accounting packages, the visions come together with other interfaces that are suitable for use in meeting the demands of other accounting management functions (Pulakanam & Suraweera 2010, p. 61). The history and adoption of the software are majorly dependent on the advancement of technology that has changed the general view and performance of the global business industry.

Market size, leaders in the market and their competitive advantages

The use of accounting packages is a global step towards effective maintenance of the accounting procedures and responsibilities. Depending on the size of the business, the cost of purchase of the software, and the version interface among other reasons, different accounting software are used at different rates depending on the users. In the Australian market, a diverse of the accounting software is used. However, MYOB and QuickBooks are the major accounting software dominating the market with a very large user base as compared to the other software according to Feiler (2014, p. 45). The two products are accompanied with product add-ons that are essential in integrating the software with other IT packages and can thus be used for other purposes, an advantage that is minimal with Reckon, Xero, Quicken, Saasu, and MoneyWorks (Burges 2011, p. 6).

According to Needleman (2011, p. 13), Intuit QuickBooks software gives users the opportunity to send an unlimited number of invoices, manage pay bills, access online data across wide ranges of mobiles and computer platforms, and make secure and free payroll payments. It is hence popular in the Australian market as a result of price and the comprehensive level of features it provides such as the add-ons. The ordinary basic version costs $12/month while the premier version costs $21/month. Business individuals across the Australian market, thus use QuickBooks in tracking their profits, expenses, and business incomes. However, it is not able to work both online and offline in addition to its huge, compliant compatibility as MYOB works (Mohamed 2011, p. 35).

MYOB has a free ATO-certified SuperStream solution that ensures the user is up-to-date with the compliance obligations. The software thus provides the ability to work online with bookkeeping individuals in different locations. Its add-on Center enables the user to build and extend the software with a range of accounting solutions from the comprehensive suite of tools within an organization. It also has five software versions that are charged between $50 to $99/ month depending on the version selected by the user according to Matthews (2010, p. 823). MYOB is thus one of the leading accounting software as it performs more functions than the normal accounting programs. It helps in the increase of profitability and better decision-making from the real-time view of the financial operations of the business. With the MYOB Kounta interface, the point of sale transactions can be integrated into the entire operation of the business (Powell 2012, p. 60).

Challenges faced by users and possible suggestions that can solve the challenges

In his study, Powell (2012, p. 63) reports that many small, medium, and large business users are well aware that technology is the major driving force of successful competition in the current business environment. However, lack of knowledge, support, and training of the different IT software or even the resource of knowing how it can be applied effectively is a major drawback. In a similar manner, Louadi (2010, p. 45) points out that many users experience the following challenges when it comes to the use of accounting packages.

• Affordability

The cost associated with the implementation of the accounting packages includes the cost of both the software and the hardware, the cost of hiring consultants, employee training, as well as on-going maintenance. It is a major issue for small businesses since they operate on a very strict budget. Others do not have sufficient capital for investing towards the necessary technological strategies that can improve their business.

• Business size

Many studies suggest that the size of the business organization has a direct positive relationship with the successful use and adoption of accountancy management packages and software. Larger organizations tend to have more opportunities as they have more developed infrastructure and strategic planning functions in addition to the skilled labor force. Small and medium sized businesses, thus find it more expensive in adopting and maintain the use of the accounting packages.

• Relevant expertise and knowledge

Many of the small scale and medium accounting software users do not have the technical skills and knowledge of the software. They thus tend to be oblivious to the benefits of these packages. Other users also lack the available information such as the relevant updates and impartial, technical advice necessary to keep up with the use of the software.

• External vendors and consultants

With the adoption of accounting software, hiring or employing external consultants is a vital practice that is necessary for the effective use of the system. However, Matthews (2013, p. 818) points out that most of the external consultants and vendors do not understand the business market of the small and medium owners. The level of support provided is thus not very adequate and focused on the challenges facing the small scale business owners. As a matter of fact, more external consultants have a charge level that is within the same range as large business owners.

In finding solutions to the above challenges, Feiler (2014, p. 50) points out that a good external support is necessary to reduce the possible failures that can occur in the process of adopting the accounting software. Good training and harmonious working relationship provided by the consultants can thus help the users in gaining the relevant knowledge and skills required to adopt the use of the software for small businesses. However, this requires a careful selection of the vendors so as effectively to integrate the software and hardware compatibility requirements and knowledge gap of the users. It is a step that is supported by Lee and Runge (2001, p. 45) as able to help the users gain experience essential for the future maintenance of the software. It is also recommended that the small businesses place more emphasis on the acquisition process, mainly the specification requirements, user friendliness, quality support and documentation that can fulfill the desires of their business levels (Daniel & Maher 2013, p. 2).

Conclusion

The use of accounting packages is vital in the current global market. Different accounting software has led to the improvement of the accounting processes. It has led to the reduction of the huge office files and accounting books as well as increasing the speed of accounting operations. Sharing of accounting information is now easy while the data can also be kept for future use. Accounting packages are hence vital primary components of the current business industry.

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