MYOB vs Xero: An Analysis for Bakery Business

This assignment discusses the selection of accounting software for a bakery business over MYOB. It emphasizes the importance of meticulous planning to identify the requirements and needs of the business before choosing an Accounting Information System (AIS). Xero is recommended as a more suitable option compared to MYOB due to its compatibility with the business processes, needs, and system requirements. The assignment highlights the potential benefits of using Xero, including reduced complexities and costs.

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Accounting Information System

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Executive Summary
This report discusses and applies a systematic approach of making selection of an appropriate
accounting system in context of bakery business. B Bakers is a mid-sized growing firm, which
experiences requirement of an accounting software to support business. It is analyzed that
business needs related to accounting information may expand due to growth and due to this
flexible and less complex software is required for this. Xero and MYOB are compared with the
each other in terms of feature and functionalities. On the basis of comparison, Xero is
recommended to the Bakery business due to its more relevancy with the requirements of
accounting information.
Table of Contents

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Executive Summary.......................................................................................................................................2
Introduction:...................................................................................................................................................3
1. Define Business Process:.......................................................................................................................4
a) Business activities/processes of a bakery:.........................................................................................4
2. Develop Business Requirements:..........................................................................................................6
b) Processes that indispensable to be performed by bakery firm:..........................................................6
c) Outcomes of the process:...................................................................................................................8
3. Determine the systems requirement:......................................................................................................9
a) Software Features:.............................................................................................................................9
4. Software Selection...................................................................................................................................12
a) Available Option for Software Vendor................................................................................................12
b) Accounting Software Category...........................................................................................................12
5. Vendor Selection......................................................................................................................................13
a) MYOB vs Xero....................................................................................................................................13
b) Most Suitable Vendor (Accounting Software) for Bakery Business...................................................15
Conclusion...................................................................................................................................................17
References:...................................................................................................................................................18

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Introduction:
This report is prepared to develop the understanding about the accounting information system. In
addition to this, this report will also consist information about the components of accounting
information system. B. Bakery is selected for this report. The purpose of this report is to evaluate
different accounting software packages and after this evaluation recommending the appropriate
accounting software package to the business.

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1. Define Business Process:
a) Business activities/processes of a bakery:
What is a Baker?
A specialized type of pastry chef is called a Baker. A baker is someone who mix the ingredients
and bake according to recipes to make different types of breads, pastries, and other baked goods
(Hamelman, 2012). The goods which a baker made sold by grocers, restaurants, wholesalers and
institutional food services. Bakers mainly do the following works:
 A baker checks the quality of ingredients to be used.
 A baker prepares equipment that he will use for baking.
 He set the temperature of an Oven.
 He measure and weight flour and other ingredients that he will use for baking.
 He observes the color and state of products being baked.
 A baker applies glazes, icing and other toppings using spatulas and brushes to make the
baked dish more beautiful and tasty.
Business activities/processes of a bakery:
Almost every bakery business follows the same steps from start to finish to bake something.
These steps ensure that the bakery is producing the best quality bread without compromising
taste, texture and nutrition. Following are the step that an organization follows to bake:
Step one: Ingredient selection and scaling:
To make good bread it is very important for a baker to use good ingredients. When a baker
choosing flour for bread making, he should look for one labeled as “plain flour” or as “bread
flour”. Most of the breads are made with the four basic ingredients; water, flour, salt and yeast or
sourdough starter (Gamelas, et al., 2016). It is very important choose the best ingredients and

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measure those ingredients fairly, they can measure the ingredients in grams in scale because
scaling is much faster and more accurate than measuring in volume.
Step two: Mixing:
Mixing process involve two stages; the first one is to incorporate ingredients and the second is to
develop the structure dough. A baker can mix the ingredients with hands or he can use machines
for this work. Dough can be mixed in a tabletop mixer or can be kneaded by hands.
Step three: Primary Fermentation:
This is the step where the yeast starts to do its work, it covert sugar into carbon dioxide, alcohol
and organic acids. A primary fermentation can be sourdough starter or a yeasted starter (Coda, et
al., 2014). The primary fermentation time of every dough depending on its formulation.
Step four: Divide and pre-shape:
This step starts after the dough is properly fermented. In this step baker divide the fermented
dough into the desired size and give the divided piece a pre-shape.
Step five: Bench rest:
After the dough has been pre-shaped, the baker should provide rest to the dough for a short time
before final shaping. This bench rest normally takes 15-20 minutes.
Step six: Final Shaping:
After the bench rest the next step is to making final shape of the dough. There are mainly four
basic shapes in bread making; the boule (round), the baguette (stick), the pan loaf (a blunt-ended
batard) and the batard (an oval shape). After the shaping of the dough, the dough should be place
somewhere to rest during its final fermentation (Keller and Rouxel, 2016).
Step seven: Scoring:

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Scoring is a decorative function, in this step most loaves will be scored or cut just before they are
baked.
Step eight: Baking:
After the scoring, the next step of this process is to bake the lean doughs. The lean doughs
typically baked at a very high temperature, around 230-245°C.
Step Nine: Store and delivery:
After the baking is completed, the logistic and inventory management will need to store those
products safely because bakery products don’t have a long life so the inventory management
should store the products at a cool place and they should make delivery of those products as soon
as possible to different shops, pubs etc.
2. Develop Business Requirements:
b) Processes that indispensable to be performed by bakery firm:
Following are the procedures that are indispensable to be performed by a bakery firm:
Supply Chain Management process:
Supply chain management process plays a very important role in running key operations for
almost every organization. If a firm don’t have a successful supply chain, than all the processes
will halt at the floor level and it bring down the overall results. Supply chain management
involve material, information and finance because these factors move in a process and SCM
involve coordination and integration of these factors because these factors move in a process
from supplier to manufacturer to wholesaler to retailer to consumer (Tummala and Schoenherr,
2011). Supply chain managers have a responsibility to ensure the supply chain to make this
process cost efficient. It involve five basic stages to make the SCM process effective, such as;
plan, source, execute, deliver and return.

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Production Process:
Transformation of range of inputs into those outputs that required by the market is called
production process. This process includes two main sets of resources; first is the transforming
resources and the second is transformed resources. The transforming resources includes those
things that carry out the transforming processes like; machinery, people, computers and building
(Soesanti and Syahputra, 2016). On the other hand transformed resources are the components
and raw material that are transformed into an end product. Any production process include many
steps and at each step value is added in the course of production and this make the product more
reliable and it improve the quality of product.
Human Resource Management Process:
Human resource department is that department which hires the employees and provides them
training, provide compensation and benefits to employees and define work for the employees in
the organization. Human resource management involves the following processes:
 Human Resource Planning: Generally human resource planning is known as the process of
people forecasting. This includes recruitment, selection, hiring, training, induction,
orientation, evaluation, promotion and layoff.

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 Employee remuneration and benefits administration.
 Performance management.
 Employee relation.
Accounts Process:
Accounts process is a sequence of activities that involve the recording of cash inflow and cash
outflow. Accounts process is very important for any business because it works like fuel to the
whole business process. The accounting process is starts with a transaction and end with the
closing of books (Thiessen, et al., 2013). Accounts process helps a business to know the
revenues and expenditures of business and how much profit the business is earning.
c) Outcomes of the process:
The success of a business surely linked with the performance of supply chain of a business.
Those companies which have high performance supply chains achieve revenue growth more than
the average within the industries. Effective supply chain management ensures the availability of
raw material at production stage at proper time. Effective supply chain management help the
manufacture to reduce the overhead costs and direct sales cost (M. Hult, et al., 2013). Cost
efficient supply chain can reduce the unnecessary costs and can increase the revenue. If the
supply chain of a business is good than the distribution process of the company will run
smoothly and the customers will satisfy with the services.
Through the good production process, management can increase their productivity and can
utilize their resources. For a good production process, Company should make well planned
strategies that make the best use of resources. For a best production process, production
management department decide that how many workers are required for a particular production,
which equipment should be used, and what process will provide best product quality to meet the

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need of customer. Effective production process increase the profitability of a company and it
indirectly increase the investment.
Strategic human resource management is a process of linking the human resource functions with
the strategic objectives of the organization to improve the performance. Human resource
management helps an organization to evaluate the current HR policies and it help to replace the
outdated policies. HRM is very important for building team in organization and increasing the
team spirit (Boxall and Purcell, 2011). HRM is also very important for monitoring the progress
of organization towards achieving its pre define goals. HRM also evaluate the performance of
employees and provide them remunerations and profit for their performance.
Accounting is known as “the language of business” because it is a basic tool for recording,
reporting and evaluating the transactions of a business. Accounting process is very important for
a business because from this accounting process business can know the total income and
expenditure of business. Accounting processes documents of all the activities related to finance
in a business (Zimmerman and Yahya-Zadeh, 2011). Accounting process helps an owner to
evaluate the past performance and the present performance with the help of the accounting
documents.
3. Determine the systems requirement:
a) Software Features:
There are some software features that should be considered by a company to achieve the
investment objectives. Following are the features:
Reporting and analysis:
In today’s challenging business environment information is power. That’s why any accounting
software package that a company wants to buy should have robust reporting and analysis

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capabilities. Reporting and analysis function of accounting software helps an organization to
confirm the regulations of government and industry (Lewis, 2014).
Graphics:
Accounting is mostly based on the number system, so the accounting software should have a
good graphic quality so the charts and other illustrative formats can be represent with high
quality graphics.
Automation:
Support for simple accounting transactions and basic financial task is not enough for many
businesses. There are some special requirements of companies for the accounting software. Some
companies wants full automation of employee expenses, payrolls and time sheets, company and
departmental budgets, purchase requisition and other financial activities (Pleuss, et al., 2012).
Automatic Update:
This is a very important feature of accounting software because using outdated software is like
eating food that has passed its expiry date. If a company using outdated accounting software then
it may feel some problems in its accounting records. Tax laws, regulations and financial practices
change over time, so it is important for businesses to use that accounting software which have
automatic update feature.
Internet connectivity:
In today’s world every person is using the internet and every business is connected with the
internet so it is very important for accounting software to follow the crowd (G. Simkin, et al.,
2014). So it should be consider by the company to choose that accounting software which have
the ability to send or receive digital documents and handle electronic fund transfer.
Security:

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Security is very important and essential feature of accounting software that should all accounting
software have. Every business depends on its accounting software. In case any data lost than it
can be a dangerous thing for business because it can reveal the secrets of the business and it can
damage the business. So the security feature of accounting software is very important for
business and while choosing accounting software the owner should check the security level of
that software.
Data sharing:
Good accounting software should have the data sharing feature so user can easily share the data
with other departments (Pearce, 2012). This feature make the access of data easy for all related
departments of organization such as; HR department, Accounts department, Sales department
and management.
Customization:
A good accounting software should have the customization feature so the user can customize it
according to the need and requirement of business. With this feature it is easy to customize the
data and report according to the need of clients.
Scale ability:
Today organization is small but in future if the business grows and increases than the accounting
software should have the capability to increase the scale ability. With the growth of business it is
not possible to change the accounting software because changing accounting software is very
expensive (Guo, et al., 2011). Therefore accounting software should have the scale ability
feature.

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4. Software Selection
a) Available Option for Software Vendor
In order to make effective use of accounting information in business, several vendors of
accounting software package including SAP, MYOB (Mind Your Own Business), Xero, and
NetSuit can be considered by this firm. For conducting comparative analysis over the functions
and features, the website of three vendors including MYOB, Xero and SAP are gone through.
b) Accounting Software Category
The key categories of accounting software include low, medium and high. In accordance to the
requirements of B Bakers, low and high end categories of software are not selected. High/end
accounting software is more useful in large size firm, which has operations in the diverse
countries and huge number of employees. In such organization, accounting information is quite
diverse and complex and thus high end software is more suitable to fulfil this need (Whittington,
2012). Similarly, accounting software of low category allows firm to perform basic functions
such as accounts’ development and their storage, formulation of financial statements and
calculation of basic accounting data in regard to a market (Hall, 2012). Thus, it serves the
accounting information needs of a small organization.
The accounting software of medium category is suitable for this business as it employs more and
less than employees from a small and large organization respectively. It has 70 employees that
operate in single market but likely to experience expansion in business due to increase in demand
of its offerings. Medium software may allow this firm to manage the accounting data with more
efficiency and less complexity. The high end software is more difficult to implement and use and
thus it will create huge cost (Andrea Renwanz Boyle and Flores, 2010). Through medium

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category software, B Bakers may fulfil accounting needs of its growing business in relatively
less cost and time.
5. Vendor Selection
a) MYOB vs Xero
By comparing the features and functionalities of two accounting software, it would be more easy
to make informed decision regarding the selection of IT system for B Bakers. The comparison of
two accounting software is depicted in below table:
Functionalities MYOB Xero
Size of Business Small to large Small to medium
Limit of transactions Unlimited Limited
User friendly Less user-friendly More user-friendly
Update Partial Automatic Fully Automated
Ease of Access Low High
Add-ons Less More
Deployment and tailoring on cloud Less experienced More experienced
Installation Required Not required
Supporting operating system Windows and OSX Windows, Linux and OS X
Reporting Standard Different formats
Back-up Less time consuming More time consuming
Security Low measures High measures
Customer Support Available (12 hours) Available (24*7)
Formation of budgets Yes Yes
Management of accounts in terms of Multi-currency Multi-currency

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currency
User accounts Multiple Single
Integration with third party No Yes
Control over user access No Yes
Accounting App Yes Yes
Multi-browsing No Yes
E-commerce Requires Ad-on Yes
Managing Inventory Yes Requires Ad-on
Business Analytics Basic Basic
The above table depicts the similarities and differences between accounting software such as
Xero and MYOB. It is determined from the above table that these software packages have some
similarities and differences, which has potential to influence the IT investment decision of B
Bakers. Both accounting software provide facility to perform business analytics and data
reporting, budgeting and forecasting and accounts management in multi-currency (Graphiq Inc.,
2017). Although the features of both software packages are quite similar but the main difference
exists between the capacities of features. MYOB is suitable to small to large organization but
has capacity to handle unlimited transactions. In contrast to this, Xero is suitable for small to mid
size organizations but facilitates fully automatic update, more add-ones, high ease of access and
multi-browsing (GetApp, 2017).
MYOB requires installations to update the system, whereas in Xero, it happens automatically
and due to this, the later one is less time consuming and more ease of access as well as user
friendliness. The number of add-ons is quite high in Xero in compare to MYOB. MYOB provide
facility to develop performance reporting in both horizontal and vertical formats and to perform

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back-up data in less time than Xero (Xero, 2012). From the security measures, Xero is more
competent as it has more measures than MYOB.
Xero has more experience of developing cloud based accounting software and due to this, it has
more potential to design, deploy and tailor the software than MYOB, which makes this less time-
consuming and more user-friendly. Similarly, customer support service exists in the both
software packages but only Xero provides 24*7 services to the customers and allows third party
integration (Xero, 2017). Xero also controls the user access that confirms more security than
MYOB.
For performing e-commerce activities and inventory management, add-ons are required in
MYOB and Xero respectively. Multiple user accounts are possible in MYOB whereas single user
account is facilitated by Xero (Graphiq Inc., 2017). Thus, it can be stated from the above table
both accounting software provides facility to perform basic accounting functions but capacity of
their features is quite vary to each other.
b) Most Suitable Vendor (Accounting Software) for Bakery Business
In above section, a comparison between the accounting software packages namely Xero and
MYOB is performed to ensure informed selection of software for bakery business. In bakery
business, firm offers wide range of goods to the number of different types of customers including
pub-chains and supermarkets and thus costing and pricing become a key management issue. In
growth phase of a business, the accounting function is likely to become more complex to handle
(Horngren et al., 2012). Xero can be more relevant to the business needs of bakery business. In
bakery business, several activities such as production, procurement, storage and delivery are
performed and the cost associated with each activity is required to calculate to make pricing

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decisions. Xero is less complex to implement and upgrade and thus bakery business would be
able to fulfil the needs of accounting information without increasing complexity (GetApp, 2017).
Apart from this, cost is also major concern for growing business, which can also be addressed
through the implementation of Xero as it consumers less time and resources than MYOB. It
makes it a cost-effective option for bakery business. Similarly, bakery business has inventory
with the perishable nature thus it is also a key areas of concern. In absence of inventory
management, bakery business may incur high stock turnover and it would affect profitability and
growth (Scot, 2010). The customization of inventory management tools is possible and easy in
Xero than MYOB and due to this former one is more relevant to the needs of a bakery business.
In MYOB, bakery business will need to install or update number of add-ons and this inflexibility
may affect its ability to meet the changing needs of business more quickly and to remain
competitive in the market (Thomas, 2015).
The difference in customer support services of both vendors also crucial aspect to consider the
bakery business as it has no skilled staff and prior experience to implement, install and update
the accounting software. Xero offers customer support services for 24 hours, whereas MYOB
services are limited for 12 hours (MYOB, 2017). Due to this, MYOB is less suitable for a
growing bakery business which would need support anytime to handle the installation and use of
the new accounting software and get benefit from this.
The increasing diversity in the offerings of a bakery business due to the changes in the needs and
preferences of customers is likely to create need of a flexible accounting information system.
Xero is more flexible in terms of third party integration, multi-borrowing and user access control
than MYOB and due to this; accounting information needs of bakery business could be more
satisfied with this (Xero, 2017). Due to the facilities of automatic update, multi-browsing and

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online access over data, it would be possible for this firm to record, update, access and evaluate
the data regarding each operation on the real time basis and to take informed business decisions
accordingly. It could help bakery business to improve efficiencies of operations and to offer
goods at the competitive prices. Bakery business may choose to expand the market through
online platform and for this e-commerce facility is quite critical (Kempf et al., 2011). Xero has e-
commerce functionality but in case of MYOB, add-one requires. It also makes sense to select
Xero for bakery business over MYOB.
Conclusion
From above discussion, it is determined that meticulous planning is required to make selection of
AIS for a business. The planning includes definition of business requirements, development of
business needs and the determination of system requirements. On this basis, relevant accounting
software packages are compared and justification for selection of software is provided. Xero is
recommended over MYOB for bakery business due to its more compatibility with the business
processes, needs and system requirements. This software has more potential to meet with the
needs of a bakery business without increasing complexities and much cost. Due to this, it is
recommended over other accounting software package.

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