Accounting Software Selection for SMEs

This assignment examines the critical factors influencing the decision of small to medium-sized enterprises (SMEs) when choosing accounting software. Students will conduct a comprehensive literature review analyzing various theoretical frameworks and practical considerations related to software selection. Additionally, a case study analysis of an SME implementing accounting software will be undertaken, followed by recommendations for successful software adoption based on the research findings.

Literature review 1
LR Accounting Software Packages in Australia

Literature review 2
Table of Contents
Introduction................................................................................................................................3
Part 1..........................................................................................................................................4
Organization Structure of H&R Block Company......................................................................4
Operational problems in the organization structure...................................................................5
Most expected system acquisition method.................................................................................6
A system flowchart of the sales procedures of H&R Block Company......................................7
Control problems and fraud in the system.................................................................................7
Part 2..........................................................................................................................................9
Development and adoption of the accounting software packages.............................................9
Existing market size.................................................................................................................10
Challenges faced by users and appropriate recommendations.................................................12
Conclusion................................................................................................................................14
References................................................................................................................................15

Literature review 3
Introduction
The main objective of this report is to get knowledge and understanding of the application of
accounting software packages in the companies situated in Australia. In this report, literature
review will be done on the H&R Block Company which is using Xero accounting software
package in Australia. With the help of this report organization structure, operational
challenges, flow chart of the sales processes, problem in the control process and possible
fraud in the system of H&R Block will be determined. This report is helpful in determining
the competitive advantages and challenges faced by the users of accounting software. At the
end of this report, appropriate recommendations will also be explained to make efficient use
of software.

Literature review 4
Part 1
Organization Structure of H&R Block Company
H&R Block is an American multinational company headquartered in Kansas City, Missouri,
United States having more than 25 million customers in whole world. Main products and
services offered by company are tax preparation, business consulting services, banking and
payroll services having branches in Australia, Canada, India and North America. The
company was founded by Richard Bloch and Henry W. Bloch in 1955 and presently having
more than 14,000 retail tax offices all over the world. The main softwares used by company
are Xero accounting software and TaxCut as its own consumer tax software and electronic
tax preparation. The organization structure of H&R Block is as follows:

Literature review 5
Figure 1 Organization structure of H&R Block
Operational problems in the organization structure
The organization structure of any company based on the communication methods between
departments and various functions it performs such as sales, procuring, finance, marketing,
HR, accounting, customer service, CEO, R&D, operations, legal, engineering and
administrations (Cummings and Worley, 2014). On the basis of above organization structure,
H&R Block can have conflicts related to different departments and lack of coordination
between the functions of various retail stores situated worldwide. Company can have lack of
efficiency and lack of effectiveness in the accounting processes and tax preparation system
because different department cannot have consistency in the accounting policies and software
H&R Block
Richard Bloch
(Co- Founder)
Robert Gerard
(Chairman of the
board)
Angela Archon
(Director)
Government
Relations officer
(M.V.)
William Cobb
(Chief Executive
Officer)
Paul Brown
(Director)
Innovation
Department
(J.H.)
Henry Bloch
(Co- Founder and
Chairman)
Tony Bowen
(CFO)
Richard Johnson
(Director)
Marketing
Department
(K.C.)
Tom Gerke
(Interim CEO)
David Lewis
(Director)
Reginal Director
US
(Christianna
Wood)

Literature review 6
used for tax preparations (Foss, et al., 2013). If company want to change any existing policy
or software related to accounting and taxation methods then it could have errors in system
and more problems to change it worldwide.
Most expected system acquisition method
There are various methods available to companies for system acquisition such as custom
software, commercial software and ERP. First of all, companies have to evaluate the
requirement of information system according to the nature of business then analysis of the
different software alternatives available to companies. Custom software developed by the
companies specifically for performing particular function which best suited to the operations
of the organization. It is also known as Tailor-made Software. Major disadvantages of custom
software are it covers high cost in implementation and sometimes software defects can occur.
It is used by the companies for minimizing the modifications in business procedures and
meeting constrains of existing system (Daneshgar, et al., 2013). Commercial software
packages are readily available in the market and helpful in minimising cost and time for
implementation. It requires less technical expert staff then custom software and future
upgrade is also available. Better documentation process and less software defects available in
commercial software in comparison with custom software. Major disadvantages of
commercial software are it is less efficient and cannot meet all the requirements of the
companies.
ERP (Enterprise Resource Planning) software generally integrates the internal and external
operational system of the organization. It is only software which is helpful in integration and
management of all the functions such as purchasing, Human Resource, sales, accounting,
CRM customer support, and inventory management. Custom software cannot be upgraded
according to changes whereas ERP can be customized and upgraded according to market
demand (Lin, et al., 2016). ERP software can be installed and effectively implemented in 2 to

Literature review 7
5 months but there is no specific time period for custom software. On the basis of overall
discussion it can be determined that EPR is the most likely method for system acquisition.
A system flowchart of the sales procedures of H&R Block Company
Figure 2 Flow chart for payroll services (ConceptDraw, 2017)
Control problems and fraud in the system
In the system flow chart of payroll services of the H&R Block Company mainly problem can
be faced in the monitoring and control process. There can be lack of effectiveness in hiring
process for client and hiring of less talented employees. Fraud can be occurred in the process
of contract management and contract delivery such as improper fee structure charged from

Literature review 8
the client for ineffective service delivery. Lack of quality and lack of responsibility can be
faced by clients or customers (McCormack and Johnson, 2016). Payroll services mainly
performed for the large organizations which are fully engaged in the other services and don’t
have time to recruit the employees. These big organizations mainly outsourced their hiring
process to the consultancy companies like H&R Block. But different departments located at
different places cannot adopt the same process of their service delivery. So, various retail
offices of H&R Block Company can offer unsatisfactory services to their clients which can
make great impact on the brand image of the company. Company cannot be able to control
the whole process of all the retail offices located at different places worldwide. So, there can
be chances of fraud and problems in the control system of the overall sales procedure of the
H&R Block Company.

Literature review 9
Part 2
Development and adoption of the accounting software packages
Accounting software is a class of computer software that helps to the accounting
professionals for managing the accounts and also helps to perform the accounting operation
in the organization. There are various accounting software’s that offer most comprehensive
accounting feature that is used in Australia. According to the Ismailand King (2014),
accounting software gives a clear picture of the company financial health by tracking the
money flow so the accounting software is an effective tool in the every small business
organization. On the other hand, there are various software’s available in Australia that has
been used by the Australian organization such as-QuickBooks, Xero, Zoho Books, and many
more.
Bernardos et al (2014) Support the views of Ismail and King (2014) that accounting is a
lifeline of the business and the accounting software used by the organization can record and
processes the accounting transaction of a business. In addition to this, Ramasubbu and
Kemerer (2014) states that the accounting software provides a sophisticate report and
tracking the financial results in the business for the calculation of profit. With the help of
accounting software, a business can track the payable and receivables so it will save the time,
money and frustration because there is no need spent time on the complex double entry
accounting concepts.
Existing market size
Taiwo (2016) support the views of Ramasubbu and Kemerer (2014) that selection of the
accounting software packages is often a difficult process for the business. In Australia,
accounting software for the specific market segment is also available in the market such as
for the retail industry. Moreover, the accounting and payroll application software are widely
used in the business organization of Australia and they also used the computer accounting

Literature review 10
software to manage the accounts of business. All the accounting software used in Australia is
compliance with the regulatory laws and guidelines that increase speed and the integrity of
financial data in the organization. According to the Kanellou and Spathis (2013), Intuit’s
QuickBooks is at popular software that is used by the Australian small business owners. The
small business owners of the Australia used these software’s to track their commercial profit,
income, and cost of the business. In addition to this, MYOB is also popular accounting
software in Australia but it is used for the extra elements of business rather than the simple
function of accounting.
Smith and Binti Puasa (2016) states that accounting software comes under the accounting
information system that records the accounting transaction within the organizations for the
function modules of the business such as accounting payable, accounts receivable, trail
balance and payroll. The accounting software’s may be the combination of the application of
the third party with the help of local modification. At the present context, the accounting
software not only managed the accounting transaction in the organization but also they
include the functions related to the decision-making aimed to gain the competitive advantage
in the business.
Ramazami et al (2012) favor the words of Smith and Binti Puasa (2016) that the accounting
software’s is used for the elimination of man-made errors to improve the accuracy and
consistency of the financial data in the organization. In addition to this, the end of the
crusades saw a boom in trade between Europe and the Middle East. In this way, the business
cannot be managed by a single owner. Therefore, when the business is run by more than one
person than a system is also needed that all the agents are making good spending decision in
the organization. In supports of this, Askari et al (2012) state that MYOB accounting
software eliminates productivity roadblocks when traveling with a client or at home, it can be
content from anywhere by using a device. The uses of accounting software’s can provide a

Literature review 11
serious competitive advantage and provide freedom to work from anywhere at any time with
their customer, suppliers, and partners.
Challenges faced by users and appropriate recommendations
According to the Alamin et al (2015) Accounting software that is used in Australia gives
many problems to the users that are normally outdated and not so much user-friendly so that
do not enable users to fully use their keyboard. In addition to this, sometimes the accounting
software’s are powerless that help the users who wish to get their business data out.
Moreover, the outdated accounting software is a very big challenge to the business
organization because the organization the detail that has been collected from the software
may be inaccurate, system slow down and errors happen into the system. Hence, data
corruption is a serious matter for the business firm of Australia. Moreover, users are stressed
out due to the lack of training and guidelines for using software and extra training may also a
reason of extra cost to the customers of accounting software in Australia.
According to the words of Tijani and Mohammed (2013), accounting software offers a huge
technical function that will help to manage the finance of business. It can be suggested that
accounting software used in the organization can be based on the needs. The accounting
software should consider the size of the business and also consider the industry of the
business. In addition to this, it can be recommended that organization should make the list of
all the points and use the software that will help to solve the issues. If there is any doubt
related to the feature of accounting software’s than organization can consult with the software
vendors.
Bishop (2016) supports the views of Tijani and Mohammed (2013) that the accounting
software used in Australia is wide and fully-fledged accounting software for the organization.
In addition to this, as per the size of accounting software, the supplier may offer a free trial to
the organization and all the accounting software should be familiar with the functionality of

Literature review 12
software packages to set up the business. Moreover, it can be recommended that business
organization should place more acquisition and developer should improve the user
friendliness in the organization with the help of accounting software.

Literature review 13
Conclusion
On the basis of above discussion it can be concluded that the accounting, taxation and payroll
application software are extensively used in the companies of Australia. There are various
software for accounting available in Australia that has been used by the Australian companies
such as Xero, Zoho Books, QuickBooks and MYOB. The use of software provides
competitive advantages to the companies and helps in increasing speed and integrity of
financial and operational data in the organization. There are many system acquisition
methods available for the companies but ERP is the most accepted method of system
acquisition in the Australia.

Literature review 14
References
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Askari, R., Ramazami, M., and Fazli, E. (2014) Application of ANP in Evaluating
Accounting Softwares based on Accounting Information Systems Characteristics. Journal of
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Bernardos, C.J., De La Oliva, A., Serrano, P., Banchs, A., Contreras, L.M., Jin, H. and
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Medium-Sized Entities During The Selection Of Accounting Software Packages.
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ConceptDraw (2017) How to Draw an Effective Flowchart. [Online]. Available at:
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Daneshgar, F. Low, G.C. and Worasinchai, L. (2013) An investigation of ‘build vs.
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Foss, N.J., Lyngsie, J. and Zahra, S.A. (2013) The role of external knowledge sources and
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Literature review 15
Ismail, N.A. and King, M. (2014) Factors influencing the alignment of accounting
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