Cloud-Based Accounting Software for BHP Billiton

This report examines the use of cloud-based accounting software for managing financial data of BHP Billiton. It recommends the adoption of XERO accounting software based on business needs and requirements.

Accounting Information System
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Executive Summary
This report is being developed for carrying out an examination of the cloud-based
accounting software applications such as XERO, MYOB or SAP to be used by businesses for
managing the financial data. It has analyzed the online software system requirements of BHP
Billiton Ltd and has proposed the company to adopt the use of XERO online accounting software
application. The recommendation is made on the basis of business needs and requirements that
can be adequately met with the adoption of XERO accounting software.
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Contents
Introduction.................................................................................................................................................4
Background..................................................................................................................................................4
Description of BHP Billiton & its Key Business Activities..........................................................................4
Business Processes of BHP Billiton...........................................................................................................4
Software Features and Functionalities to be Considered by BHP Billiton for Supporting its Business
Activities......................................................................................................................................................5
Software Selection.......................................................................................................................................6
Accounting Software Package Vendor & their Products..........................................................................6
XERO....................................................................................................................................................7
Comparison of MYOB & XERO Accounting Software Packages....................................................................7
Most Suitable Vendor and Accounting Software Package for BHP Billiton..................................................9
Conclusion...................................................................................................................................................9
References.................................................................................................................................................11
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Introduction
The business entities are largely adopting the use of innovative and latest accounting
software for better management and coordination of their accounting and financial operations.
The adequate management of financial resources is critical for the growth and success of a
business firm. The use of accounting software that provides the efficiency to business firms to
better manage their financial resources by providing access to real time data which can lead in
better decision-making. This report has been carried out in the context of examining the
usefulness of cloud-based online software applications in management of accounting and
financial data of an ASX listed entity. The analysis has been done from the perspective of a
management consultant providing recommendations to the CFO of the selected entity regarding
the need and consequent benefits of integrating the online accounting software for supporting the
various business activities. The company selected for analysis purpose is BHP Billiton Limited,
an Australian based international mining company.
Background
Description of BHP Billiton & its Key Business Activities
BHP Billiton is an Australian mining company that is recognized as one of the largest
mining company across the world in terms of revenue. It is involved in extracting and processing
of minerals, oil and gas products across the world and possesses a dual-listed business structure.
The company is listed on ASX as well as stock exchange in London (BHP Billiton, 2017). The
company is mainly involved in producing the various commodities such as iron ore, coal, copper
and uranium. The major business activities of the company include production and exploration of
petroleum, copper, iron ore and coal (Gilroy, 2015).
Business Processes of BHP Billiton
The business model of BHP Billiton consist of the following four stages, that is finding a
deposit, establishment of mining, carrying out mining activities and lastly involves conducting
purification. The primarily business process of the company includes identifying suitable
location for mining and conducting feasibility studies. This is followed by obtaining the
regulatory approval and then establishing the infrastructure for conducting mining operations.
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The next business process is extraction of minerals from the identified location and lastly
removing impurities to purify the minerals obtained.
Software Features and Functionalities to be Considered by BHP Billiton
for Supporting its Business Activities
BHP Billiton places large emphasis on increasing its capital productivity by reduction in
the cost of operations and improving its business performance across all its business segments.
The company conducts its operations on an international level and therefore control and
managing of diverse business segments in various countries is quite complicated for the
company (Schaeffer, 2017). The managing of large volume of financial data regarding the
maintaining of inventory, purchase orders, expenses, sales and tax compliance can be quite
troublesome for the company. Thus, with numerous financial operations running simultaneously
for the company in various countries it is largely difficult for the finance managers to accurately
process all the accounting and financial transaction. Besides accuracy, the recording and
interpreting of large volume of financial transactions is also time-consuming. The company also
requires quick decision-making by accessing the accounting and financial data at any point of
time and also through gaining access to real time data (Svobodova and Cerna, 2016).
These operational and financial problems of BHP Billiton can be adequately addressed
with the use of cloud-computing accounting software. The adoption of a cloud accounting
application will enable the company to create a centralized financial system in which employees
can gain access to different information as per their needs with the use of an online platform such
as internet (Brewer, Sorensen and Stout, 2014). The complete elimination of manual handling of
financial processes and automation of accounting to information would have a positive impact on
the productivity functions will have a positive impact on the productivity by reducing the time
involved in managing the financial data. The reduced time and labor costs and better access level
of the company. It would also improve the security of the accounting and financial data of the
company so that it is less vulnerable for cyber attack (Kosalge and Ritz, 2015).
It would also enable the company to effectively integrate its different supply chain
activities that are carried out in different countries so that financial data can be accessed by
managers and employees for taking accurate decisions. Automatic tools provided by the use of
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cloud accounting software applications will help in reduction of error and provide accurate
financial results providing a clear picture of the bottom line of the company (Hossack, 2015). It
would provide assistance to the business managers to develop accurate and realistic strategic
goals by gaining access to real time financial data and aligning the goals with the financial
resources. BHP Billiton is an international company conducting its various business activities
across the world and therefore it is necessary to keep a continuous track of the sales and expense
figures from the various units across the world. The continuous tracking if the financial records
and sale figure would help in identifying the gaps in the performance and therefore taking
continuous measures for overcoming the gaps in performance (Kosalge and Ritz, 2015).
Software Selection
Accounting Software Package Vendor & their Products
The accounting software packages selected for discussion in this section are MYOB &
XERO. Here is presented a detailed description of above two accounting vendors and their
respective products:
MYOB
MYOB is an abbreviated term (Mind Your Own Business) that is an online accounting
cloud-based software application developed for simplifying and managing the complex financial
data of business entities within Australia. The accounting vendor along with its subsidiaries is
involves in providing business management accounting solutions to various business entities
across Australia. It is an online accounting solution for businesses irrespective of their sizes. The
major accounting solutions provided by the vendor includes managing tax, invoicing, payroll,
tracking of expenses and development of financial reports (Madjid, 2017). The cloud-based
application provided by the vendor provides the future of giving real-time updates to taxes and
forms. The different accounting products provided by the vendor are described as follows:
 MYOB Essentials: It enables the users to manage the cash flows and payroll processes.
The business managers can easily manage their invoices and also complying with the tax
policies with the use of this online accounting software.
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 MYOB Accountright: It is powerful accounting software that enables the business
owners to manage adequately the complex payroll, transactions including superannuation
and leaves. This product provided by the vendor posses an advantage over MYOB
Essentials that it can run from the desktop or cloud or both.
 MYOB Account edge: The accounting software that is being developed to be used on the
platforms such as Mac, iPad and iPhone and conducting complex accounting activities
(About MYOB, 2019)
XERO
XERO is an ASX listed public company of Australian involves developing and providing
cloud-based online accounting software products to businesses within the country. The
difference accounting solutions provided by the accounting vendor includes asset management,
invoicing, bank reconciliation, inventory management, payment processes, maintaining purchase
orders, managing mufti-currency transactions and sales operations. It also co-ordinate and
integrated financial data from various business processes for the purpose of developing the
financial reports. XERO is becoming a domain cloud-based online accounting vendor within
Australia due to its innovative features that helps in securing the accounting data and at the same
time providing smart solutions to diverse accounting problems of business entities. The different
products provided by the XERO accounting vendor are stated as followed:
 XERO Tax: This accounting product of XERO includes providing cloud-based accounts
development and tax filing solution.
 XERO Cashbook: It has been developed for the purpose of managing the cash flows of
business and enabling the accountants to manage the accounting books
 XERO Ledger: It is used for the clients who require only development of financial
accounts on an annual basis. It integrates all the financial information in a single place
that can be used in development of financial reports (XERO, 2019)
Comparison of MYOB & XERO Accounting Software Packages
Factors of Comparison XERO MYOB
Xero provides a complete MYOB is firstly installed on
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Accessibility online platform as it involves
storing each and everything on
the cloud platform. Thus, the
financial data stored can be
accessed from any part of the
world
desktop and then can be
accessed with the use of
online cloud based program
User interface
XERO is much easier to be
accessed by the users as it is
more customizable as
compared to the interface of
MYOB
MYOB interface is rather
complex and thus largely
difficult to be accessed by the
users
Financial reporting XERO helps in developing
simplified business reports
that can be readily understood
the users
MYOB, on the other hand,
rather develops complex
financial reports that can pose
difficulty before the users to
be understood
Inventory All plans offered by the
accounting software contains
the basic features of managing
the inventory
MYOB basic plans do not
contain the feature of
inventory management.
MYOB Accountright only
provides advance features
such as inventory or
management
Installation process & Cost XERO is rather costly as
compared to MYOB but its
installation process is fast and
easy
MYOB subscription plans are
less costly however its
installation process for more
complex accounting issues
such as inventory or job
management is rather
complicated
(Lane, 2018) & (MYOB or Xero, 2019)
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Most Suitable Vendor and Accounting Software Package for BHP Billiton
BHP Billiton needs the adoption of online accounting software that enables in gaining
real time access to relevant information at any point of time and from any part of the world. This
would help in centralizing the decision-making and thus simplifying the complex financial
transactions of the company. The company is recommended to adopt the use of XERO
accounting software as it possesses advance features to manage the complex accounting
calculations required for managing the international transactions of BHO Billiton (Crozier,
2015). XERO enables in effectively compliance with the tax requirements within various
countries as compared to MYOB that does not possess such advanced features of complying with
tax obligations on an international level. Thus, the use of XERO accounting software would
enable in simplifying the complex tax filing of BHP Billiton as it carries out its operations on an
international level. The adequate compliance with various tax regulations and reporting is
essential for BHP Billiton. The misrepresented information on tax returns could result in
imposing fines, penalties and possible legal issues for the country in various countries. The use
of XERO accounting software is appropriate for meeting such business needs as it would help in
ensuring that tax calculations are performed with greatest accuracy and results obtained are
reliable (Lee, 2017).
The use of accounting software would enable BHP Billiton to improve the reliability in
its financial reporting system. Also, XERO helps in preparation of simple financial reports that
can be understood easily by its various global stakeholders. It is also relatively easy for
conducting audits on these financial reports and thus improving the brand image of the company
in the mind of its global investors (Biafore, 2012). In addition to this, XERO contains basic
features of inventory management which is lacking in MYOB and therefore it requires the use of
XERO accounting software for regular managing of its inventory and thus reducing the cost of
goods sold which would ultimately result in improving the company profitability. BHP Billiton
possesses huge inventory levels and therefore the integration of XERO is more adequate for the
company for improving its operational efficiency (Smith, 2019).
Conclusion
The above discussion has inferred that accounting software such as XERO or MYOB are
largely being used by business entities within Australian for better management of their financial
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information. These types of software are developed on cloud-based applications that enable them
to provide regular access to real time data for business managers for better decision-making
regarding the business growth and development. The use of cloud-based accounting software
such as XERO could enable BHP Billiton to reduce the cost of its operations and also manage its
complex international financial transactions.
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References
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[Accessed on: 23 May 2019].
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Australian mining and metal industry: A combined approach of quantity and quality
measurement. Business Strategy and the Environment, 26(2), pp.209-223.
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Madjid, T. 2017. Enterprise Information Systems and the Digitalization of Business
Functions.USA: IGI Global.
MYOB or Xero?. 2019. [Online]. Available at: https://www.dothesums.co.nz/myob-or-xero/
[Accessed on: 23 May 2019].
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