Accounting Software Packages: A Comprehensive Analysis of Market Trends and Challenges

This literature review delves into the evolution, market size, and competitive landscape of accounting software packages in Australia. It examines the development and adoption of these systems, highlighting key players like Xero, MYOB, and Intuit. The review analyzes the current market size and identifies the factors contributing to the competitive advantage of leading players. Furthermore, it explores the challenges faced by users and provides relevant suggestions and recommendations for addressing these gaps. The analysis concludes with a discussion on the importance of accounting software packages for organizations of all sizes and emphasizes the need for robust internal control mechanisms to ensure efficient and secure accounting practices.

Assignment 1 (Literature review)
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Contents
Introduction................................................................................................................................3
Part 1..........................................................................................................................................4
1. The Current organisation structure..................................................................................4
2. The operational problem faces by the organization due to this operational structure....5
3. System acquisition method of AGL energy limited........................................................6
4. System flowchart for sale procedure of the AGL energy limited...................................7
5. Control problems in the system and sorts of fraud in AGL private limited....................9
Part 2........................................................................................................................................11
1. Development and adoption of the accounting software packages.............................11
2. The current market size.................................................................................................12
3. Identify the leaders in the market and what gives them the competitive advantage.....13
4. Identify the current gaps or challenges encountered by users or customers of
accounting software/packages and make relevant suggestions or recommendations..........14
Conclusion................................................................................................................................16
Recommendations....................................................................................................................17
Reference..................................................................................................................................18
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Introduction:
This assignment depicts about usefulness and issues in the organisation structuring and
information systems in an organisation. In context of Australian ASX listed company,
organisation structure of AGL energy and the operational issues faced due to this are also
analysed. Further, there is analysis about information systems software which are
implemented and executed in the company. There is also analysis about sales system of AGL
energy limited and the possible control issues are also discussed. Lastly, there is thorough
analysis of current market size of accounting software’s and software requirements across
Australia.
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Part 1:
1. The Current organisation structure:
AGL energy limited is ASX listed company based in Australia. The company deals with the
generation and retailing of electricity and gas across Australia. The company produces
electricity from coal steam gas, wind power, hydroelectricity, thermal power, and natural gas.
It was founded in 1837 at Sydney, New South Wales and supply gas to street lamp in Sydney
in 1847. Several projects are going on for fulfilling the demand of energy of Australia. The
company headquarter is situated at north Sydney, New South Wales, Australia. The company
deals in electricity and natural gas distribution, electricity generation and retailing. The
revenue of the company is noted 12,584 million Australian dollars in year 2017 (AGL energy
limited, 2018).
Organization structure of AGL energy limited
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Figure: Organization structure of AGL energy limited
(Source: AGL energy limited, 2018)
The CEO of the company is Andrew Vessey and the chairman of board is Graeme hunt. The
other members of board of director are Jacqueline Hey, Diane smith Gander, Leslie Hosking,
Belinda Hutchinson, Peter Botten, and John Stanhope. The board controls the people and
performance committee, audit and risk management committee, nomination committee,
safety, sustainability and CSR committee (AGL energy limited, 2018). The audit and
committee are responsible for group audit and external auditor. The CEO and managing
director of the company manage strategy, business plan and policies approved by the board.
Executive team report to the managing director and manage and oversight the employees
(AGL energy limited, 2018).
2. The operational problem faces by the organization due to this operational
structure
The organisation is quite large but still it faces many problems regarding its operational
structure. The CEO of the company has a great vision for the company but many workers
complain that the senior management are irresponsible and take wrong decisions. The
organization of AGL energy limited is quite complex due to which workers faces problem
regarding communication and do not able to communicate to higher official. There is much
politics going on in upper and middle management due to which the decision making is slow
and there is a lack of communication on time. The lack of communication in the organization
structure leads to problem in giving promotion to the workers. The AGL private limited is a
quite big company handling many of the power generation plant, due to its large
infrastructure covering many part of Australia it require a better and flexible organization
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structure, in which the qualified worker get the chance to keep chance to grow and the
operation speed of worker could able to increase (AGL energy limited, 2018).
3. System acquisition method of AGL energy limited
All the big company use various software to manage the business and control the function
related to human resource, services and technology of various offices of the company. The
different software uses are
Commercial software is the software develops by different companies and then sells to
various industries which needed that software. The company make the software according to
the demand of the industry. This software can be used for product planning, manufacturing,
product development, marketing and sales of the industry (Beal, 2018).
Custom software is the software which is updated by the industry for its convenience and
expansion. Generally many industries tends to grow in future and its infrastructure grows
with time, to make a proper operation of the industry and merge the new infrastructure of the
industry the software needs to be update by the company (Beal, 2018).
Enterprise resource planning is software which integrates various applications including
marketing, product planning, manufacturing, product development, and sales to manage the
function of an organization. This is quite beneficial for the industries that have a quite
complicated management process and whose industrial infrastructure is spread in a large part
of area across various nations. This is quite beneficial as it integrate operation of various
branch of company and help to manage the productivity of various branch of industry (Beal,
2018).
AGL private limited has a large infrastructure covering many of energy generation and
distribution plant across Australia. AGL has variety of power generation plant including
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peak, base and intermediate power generation plant, generates power from both renewable
and non-renewable source of energy. To operate such a complicated infrastructure body AGL
private limited need Enterprise resource planning software to manage its operation. The work
of power generation is also complicated as the power requirement fluctuates at regular basis
and to maintain proper energy supply to the customer it require Enterprise resource planning
(Beal, 2018).
4. System flowchart for sale procedure of the AGL energy limited
AGL energy limited has a business of gas and energy generation and retailing across
Australia. The energy is first generated from different power plant across Australia these
plant uses hydroelectricity, wind power, thermal, coal seam gas and solar energy to produce
electricity (Bodnar, and Hopwood, 2012).
Then power is transmitted to different distribution centre using transmission cables and then
the power is then distribute to the customer. The energy transmission team include the
administrative support, engineering technical support to sort out problem in transmission.
Supplies officer is responsible for monitoring the supply chain of the energy. The power
requirement by different customer varies with time so there is a requirement of proper
monitoring of the grid of electricity if any transmission line faces scarcity of electricity then
power is diverted from some other power station to this transmission line. The whole process
requires a proper check on the transmission line from time to time and this is done using
modern technology (Bodnar, and Hopwood, 2012).
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Source: Energy sales distribution
AGL energy limited also deal in gas supply to various household. The gas is first extracted
from oil and gas well then it is process in gas processing plant then the processed gas is
transmitted through the pipe lines to various customers. There is a risk involve in
transmission of gas so there is a proper monitoring on the pressure of gas supplied and the
condition of gas pipe is properly monitored by risk and hazard management team (Bodnar,
and Hopwood, 2012).
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Power Generation
Power
Transmission
Power Distributer
Customer

(Source: Gas sales distribution)
5. Control problems in the system and sorts of fraud in AGL private limited.
AGL energy limited has a rigid working structure due to which the process of detecting
problem in the structure is slow and hard this lead to increase in expenses on decision making
by the company. The worker also complains about the stressful working condition in the
industry. Many workers complain about irresponsible behaviour of the higher authority.
There is a huge problem in communication among the employ and higher management
authority due to which skilled worker do not get chance to grow within the industry (Hall,
2012).
In 2015 the environmental protection agency suspended AGL Gloucester operation after
finding toxic chemical in the hunter water system introduce by AGL energy limited but it do
not harm the aquatic life of the system due to which the suspension has been cancelled. This
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Gas
extraction
transmission
Customer

type of incident shows problem in the structure of AGL energy limited. AGL energy limited
is heavily investing in renewable source of energy to fulfil the Australian renewable energy
demand and to achieve this goal AGL energy limited have to make his execution process
more flexible and transparent and give chance to the highly skilled worker to grow within the
industry and create a positive environment within the company (Hall, 2012).
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Part 2:
1. Development and adoption of the accounting software packages.
Accounting Information System (AIS) includes accounting software and is a mechanism
which is used for recording and processing accounting transactions. Accounting software has
increased significantly in the last few decades (Lim, 2013).
It originated since 1950’s and the first development occurred when IBM developed “9PAC”,
a first report generation “language”. Australia is also one of the countries which adopted the
concept of accounting software at faster pace. The accounting process starts with several
ledgers, cash book, petty cash ledgers, trial balance, adjustment entries and lastly financial
publications. The accounting software system is easy and quick. With increase competition in
accounting software’s packages, all types of companies, are implementing accounting
software’s. The biggest players include Xero, Intuit and MYOB. Xero is most populous in
implementing accounting software which emphasizes over cloud accounting software. Xero
accounting uses SaaS (model) (Lim, 2013).
Cloud Computing:
Cloud computing provides computing services—servers, databases, storage, and networking,
software through internet or termed as cloud.
History of accounting software
 In the late 1950s and early 1960s.
 Data used to be handled manually.
 Time consuming and cost effective methods were used.
 Data were stored in flat files.
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 As the demands on these systems grew, programs were modified and updated (Lim,
2013).
2. The current market size
Market size is analysed on the basis of certain parameters. The distribution has changed over
the last 10 years and will change from country to country (Lim, 2013).
Market share of top most companies using accounting software packages in Australia
Companies name % of market share
Xero 65%
Sage 33 %
Intuit 20%
AACA 55 %
Major players in the market are MYOB and QuickBooks. Today new software providers like
XERO and RECKON has emerged.
Quick look to the accounting software in Australia
Reckon Accounting Software
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 Flexible in pricing and features
 Basic package start from $5 a month
The major features of the software are database centralisation, free connectivity with large
number of members, flow of communication, high level security, budgeting techniques, SSL
encryption, book-keeping systems and analyses.
The major features of XERO Accounting Software are that it is beautiful Accounting starts
from $25/Month; try Every Feature Free for 30 Days (Mahesha, and Akash, 2013).
The major features of MYOB Accounting Software are that it is a small business accounting
software, $35 a month (payroll for one), reduce instant reports on PAYG, GST and BAS,
implementation of accounting transactions, timely update etc. (Lim, 2013).
The major features of QuickBooks is that it is built for small and start-up businesses, starts
from $13.50 a month, make taxation work, banking transactions, GST ascertainment etc.
3. Identify the leaders in the market and what gives them the competitive
advantage.
As the accounting software is emerged as basic tools to be used by small and big business,
there has emerged the strongest leadership among the accounting software industries amongst
its price, quality and durability issues. As well as a leading competitive advantage is
developed amongst all of them. So, let’s have a oversee to that (Lim, 2013).
Leaders in accounting software
1. MYOB
2. Intuit
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3. Xerox
There is large competition in accounting software’s and each company is making itself better
for improved productivity.
Xero: It is based in New Zealand and worth $250 million. It has large number of customers
who had aided large number of customers.
Intuit: It is US based company which is expanding its services across Australia.
MYOB: It is Australian based company which is working and expanding its business
throughout.
Xero is leading in competitive advantage:
Reasons:
1. Cloud computing
2. Accelerates a small business’ growth
3. Accessibility
4. Easy availability anywhere
5. Easy to use and useful for less expertise as well (Mahesha, and Akash, 2013).
4. Identify the current gaps or challenges encountered by users or customers of
accounting software/packages and make relevant suggestions or
recommendations.
There are a number of gaps in the accounting software –
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Lack of efficiency – The accounting system lacks better controlling options. Even for the
basic day to day functions, one has to repeat the entire process which is cumbersome. It
lacks user-friendliness and thereby it increases the time even for the basic tasks (Ramasubbu,
and Kemerer, 2014).
Lack of speed – As the accounting software is used at multiple points at the same time over
the internet it needs to perform faster but the software lacks speed and takes a lot of time for
one entry which is done at one point to display at the other point. It causes unnecessary delay
to the customers of the company (Ramasubbu, and Kemerer, 2014).
Lack of customer support – Company lack customer services executives which can address
these concerns over time and thereby offer quick solutions to the customer. The company
also lacks visiting services where customer service executives visit the customers to resolve
their disputes and train their accounting staff to become used to the new accounting software.
To resolve these issue company first of all needs to understand the need of the user and make
tailored adjustments in their services. Provide options on the home screen for functions which
are regularly used. It needs to improve the response time of the accounting software over the
internet as unnecessary delays are being caused to the customers. Customer service
executives will also be able to assist new customers in their day to day work while they are
learning to use their software. By providing customer service executives who visit the
customer regularly it will improve the consumer satisfaction and will help their accounting
staff to understand the new software (Šimůnek, et. al., 2016).
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Conclusion:
It can be concluded that accounting software packages are highly important for recording
accounting transactions and accounting framework. There are number of accounting
software’s such as Xero, MYOB and cloud computing and other techniques which are useful
for presenting developing accounting framework. The market size analyses also provide
information that accounting software’s is useful in all sizes of organisations, and provides
more benefits than cost to organisations.
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Recommendations:
AGL energy is a large organisation and is working in varied segments such as gas, petroleum,
natural resources etc. It is important that company implements large software’s such as ERP
which would not only manage departments but would also aid in planning and controlling
purpose. And there must be effective internal control mechanism which would eliminate
operational issues and would allow safe, secure and recording of accounting work.
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Reference:
1. AGL energy limited, 2018. About us. [Online] agl.com. Available at:
https://www.agl.com.au/about-agl. (Accessed as on: 10th May, 2018).
2. AGL energy limited, 2018. AGL energy review. [Online] glassdoor.co.in. Available
at: https://www.glassdoor.co.in/Reviews/AGL-Energy-Reviews-E37991_P2.htm?
countryRedirect=true. (Accessed as on: 10th May, 2018).
3. AGL energy, 2018. AGL energy. [Online] theofficialboard.com. Available at:
https://www.theofficialboard.com/org-chart/agl-energy. (Accessed as on: 10th May,
2018).
4. Beal, V., 2018. Enterprise resource planning. [Online] webopedia.com. Available at:
https://www.webopedia.com/TERM/E/ERP.html. (Accessed as on: 10th May, 2018).
5. Bodnar, G.H. and Hopwood, W.S., 2012. Accounting information systems. Pearson
Higher Ed.
6. Hall, J.A., 2012. Accounting information systems. Cengage Learning.
7. Lim, F.P.C., 2013. Impact of information technology on accounting systems. Asia-
Pasific Jornal of Multimedia Services Convergent with Art, Humanities and
Socialgy, 3(2), pp.93-106.
8. Mahesha, V. and Akash, S.B., 2013. Management Accounting Benefits: ERP
Environment. SCMS Journal of Indian Management, 10(3).
9. Ramasubbu, N. and Kemerer, C.F., 2014. Managing technical debt in enterprise
software packages. IEEE Transactions on Software Engineering, 40(8), pp.758-772.
10. Šimůnek, J., Van Genuchten, M.T. and Šejna, M., 2016. Recent developments and
applications of the HYDRUS computer software packages. Vadose Zone
Journal, 15(7).
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