Accounting Software in Australia

Introduction

In this study the description of the accounting software along with its history, implementation, deployment and competitive advantages. Especially the detailed analysis on the development and competitive advantage of the software is provided in the study.

The accounting software can be referred to as the software which is responsible for processing and recording transactions that are related to accounting (QuickBooks and Premiere 2013). The transactions are directly associated with accounts receivable, accounts payable, trial balance and payroll.

History of Accounting Software in Australia:

Up to 1974, bookkeeping was done to a great extent in the same way as the old Egyptians had begun doing it 3000 years prior (Sangster 2015). Bookkeeping moved to Europe towards the end of the Crusades, which saw an ascent in exchange amongst Europe and the Middle East. Italy is generally viewed as the origination of bookkeeping’s twofold passage framework, with its initially recorded use being in Genoa in the thirteenth century. This was before the times of Microsoft or even (PCs). Massive CRT screens offered only 20 lines and 80 characters width on their screens. Still, it was such a great amount of less demanding to see information on-screen than it was to bumble about with information cards. At that point, in the mid-1980s, IBM propelled the PC (Metropolis 2014). Still, the adjusting of books was done physically, however soon the principal bookkeeping bundles showed up available. In South Africa, TurboCash dispatched in 1987 with a mechanized framework for trial equalization, accounting report and pay articulation. In 1990, TurboCash started being dispersed by Pastel. In spite of the fact that it got to be known by the last name, it was viably the same framework. This item developed to wind up pervasive in South Africa and has 80% of the neighborhood bookkeeping programming market (Whitt 2015). As controls turned out to be more perplexing, other non-bookkeeping disciplines felt the need to advance from a straightforward spreadsheet, and jolt on modules were produced for assessment, finance, and organization secretarial capacities. All these had, obviously, to be coordinated with the center back office capacities.

The MYOB, Xero and Intuit are the biggest organizations in Australia’s accounting software market. The evolution of Xero initiated from a small New Zealand based startup. The organization had spent about    two hundred and fifty million of Australian dollars for developing software (Hossack 2015). Intuit is an US giant and entered in the Australian market through purchasing the startup named Invitco.

Development and Adoption of Accounting Software in Australia:

Development:

For implementing an accounting software two things, programming tools and development skills, must be present in the development team’s members. The following are some steps thorough which the development of the accounting software can be carried out.

Sketching ideas: At first the development team must record the ideas on software. The application will analyze the sketches and find the errors in the initiation (Clarke and O’Connor 2012). Along with it, the future features of the software will also be assessed for providing additional value to the system. All of these will be tested on small amount of selected users.

Designing the architecture: The development team will design required control tables. The control tables can be referred to the tables that are associated with the transactions (Bernardos et al. 2014). The department and the account are most valuable control table for any accounting software. In addition to that the planning and creation of the transaction table will be done. The generic ledger journal accesses are the component of these transaction tables. The design will be effective enough to support the flexibility, data use and scalability.

Building the prototype: The first module will be developed by following the extensive user interactions (Bernardos et al. 2014). Before deploying the software, it will be tested and examined through collecting user feedback regarding the functionality of the prototype.

Enabling transactions: Front end GUI forms will be developed around the tables of the software (Clarke and O’Connor 2012). In addition to it, the implementation of the new functionalities and transparent interface bridging will be carried out. As a result the users can get the software as per their required peed.

Speeding the development: The development of the fresh features and the activities of the software have to be quicker for meeting the allocated time.

Adoption:

The organizations in Australia are more willing to adopt the cloud based accounting software. From a research of 12 months the knowledge has been gathered that the sixty percent fit the business in Australia accepting cloud accounting software (Apostolou et al. 2014). The business in the Australia is accepting cloud accounting software more than fourteen percent than other nations. According to the Xero, the adoption of the accenting software is happening at a remarkable speed. As stated above, the acceptance rate is most in the Australia. As per the Australian organizations, the mobility of the cloud accounting software is considered to be the best feature of it. The accounting software development organizations are working closely with the organizations to make them know the accessibility, reliably and security of the software.

Market Size of Accounting Software:

Currently Intuit QuickBooks is the most popular accounting software in Australia.  The income, profits and expenses of the business can be racked through the software efficiently. Another big name on the Accounting software market is the MYOB (Hennes Leone and Miller 2013). The objective of the organization is to provide some more than just accounting to the consumers. The real-time view of the data provides the management to take better decisions. The Xero, another dominator in the accounting software market also provide the feature of viewing the real time data. At present the half million users are making use of the software in Australia.

Leaders in the Market of Accounting Software

The distribution of accounting software has changed over the years and it varies from country to country. The accounting software is being used in a small, medium and large range of business operations. Xero is the most widely used software package and it covers 65% of the total market share. Sage 50 has occupied 10% and Intuit 20% of the market. These are the statistics of the Australian continent (Hossack 2015). These values differ largely at the United States. In the USA Inuit has covered almost 55% of the total market. Sage has covered the second spot with 33% market coverage. These are the stats for small business enterprises. However, if a medium range of business is considered, then Sage holds the top position with 42% of market coverage followed by Inuit with 22%. The larger business scale CA, SAP, and VAR hold a prominent position in business operations.

Figure 1: Comparing leaders of Software accounting market

(Source: Paternoster et al. 2014, pp-1210)

Competitive Advantage of Xero and Inuit over other Accounting Software

Xero has gained competitive advantages over other accounting software because of its features. Xero is cloud based accounting software and it provides the ease of wireless access for accounting data (Burdon and Dovey 2015). Most of the accounting software does not support cloud service. Hence, the cloud service has provided Xero with a competitive edge over its rivals. The accessibility provided by Xero because of cloud network is the main reason behind its dominant use in small scale enterprises. The user Interface of Xero is very simple and it has provided the users with ease of access. The getting started box of Xero is deployed in every section of the accounting software. Hence, a user would just need to go through the box for understanding the features of the accounting software.

Inuit has a gained competitive advantage over its competitors because people are sticking with it for desktop accounting software. It has helped them in achieving good revenue from its brand value (Hagiu and Altman 2013). The company has formed new resources in new market with the help of their long term accounting system. Inuit has been able to influence the third party programs and vendors for becoming a part of their ecosystem. The customers of Inuit have gained promising access to the system base. Inuit had involved the easy user interface for developing applications. These applications would be supported in their platform and the users would be able to find the app user friendly.  Inuit has advantage of marketing, point of sale, payroll, bank feeds and tax. These are the areas where Inuit has found its applications (Burdon and Dovey 2015). The use of sophisticated tools has helped Inuit to reduce the risk.

Conclusion:

The accounting software is consisting of several functionalities and features which facilitate the multi organization consolidation facility. The account software is a great solution while an organization has a parent organization and several child one. Like multi organization consolidation facility, progress billing is another feature of the software which indicates that the management can keep track of the bills as the consumers make use of the products. From the above study it can be concluded that the future of the software in Australia is bright. Various organizations from other countries can enter in the Australian market, like the Intuit did.

References

Apostolou, B., Dorminey, J.W., Hassell, J.M. and Rebele, J.E., 2014. A summary and analysis of education research in accounting information systems (AIS). Journal of Accounting Education, 32(2), pp.99-112.

Bernardos, C.J., De La Oliva, A., Serrano, P., Banchs, A., Contreras, L.M., Jin, H. and Zúñiga, J.C., 2014. An architecture for software defined wireless networking. IEEE Wireless Communications, 21(3), pp.52-61.

Burdon, S. and Dovey, K.A., 2015. Exploring the cultural basis of innovation.Journal of Innovation Management, 3(3), pp.20-34.

Clarke, P. and O’Connor, R.V., 2012. The situational factors that affect the software development process: Towards a comprehensive reference framework. Information and Software Technology, 54(5), pp.433-447.

Hagiu, A. and Altman, E.J., 2013. Intuit QuickBooks.

Hennes, K.M., Leone, A.J. and Miller, B.P., 2013. Determinants and market consequences of auditor dismissals after accounting restatements. The Accounting Review, 89(3), pp.1051-1082.

Hossack, S., 2015. Cloud-based accounting and productivity tools for practitioners and taxpayers. Taxation in Australia, 50(5), p.265.

Metropolis, N. ed., 2014. History of computing in the twentieth century. Elsevier.

Paternoster, N., Giardino, C., Unterkalmsteiner, M., Gorschek, T. and Abrahamsson, P., 2014. Software development in startup companies: A systematic mapping study. Information and Software Technology, 56(10), pp.1200-1218.

QuickBooks, I. and Premiere, C., 2013. Accounting Software Supported: Accounting Software Version MISys Manufacturing Version. Sage, 6, pp.0-7.

Sangster, A. (2015). The genesis of double entry bookkeeping. The Accounting Review, 91(1), 299-315

Whitt, P., 2015. Additional Software Products. In Pro Freeware and Open Source Solutions for Business (pp. 235-241). Apress.

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