Evaluating Accounting Information Systems for Eastwood Refrigerator PVT LTD

The assignment discusses the importance of adopting a custom-made accounting information system for Eastwood Refrigerator Private Limited (PVT LTD) to address their organizational structure issues and improve efficiency. The paper highlights that SAP provides cloud-based data storage, allowing clients to alter and amend software features as needed. It also notes that the company's current organizational structure is based on a line structure, which can lead to problems such as lack of inter-departmental communication and accountability. To overcome these challenges, Eastwood PVT LTD should adopt a custom-made AIS that is user-friendly, secure, and affordable. The paper concludes that SAP is the best choice for the company given its medium-scale operations.

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Part – 1
Introduction
With the introduction of highly advanced technologies, the complexity of business world is
increasing by every passing day. To deal with these complexities a business organization needs
to prepare such a information system that provides them the required information on their finger
tips (Amri 2003). With the advent of accounting information system it has become possible for
the business firms to operate the information in a manner to obtain the best out of it. Accounting
information systems are such software’s that helps the firm in recording, classifying, analyzing
the financial data of the organization (Alice 2010). Most of the organization needs such
software’s to record the payroll, ledger, accounts receivables, accounts payable etc. These
software’s not only provide financial information to the firm but also helps in decision making,
cost cutting and improving effectiveness of the employees of the organization.
Literature Review
Most of the organization nowadays is failing not because of the competition but because of the
lack of advanced accounting information systems. The business organizations from every other
corner of the world are now opting accounting information systems into their workings.
Accounting information systems are not only meant for large businesses but it is also been
prepared for small and medium size organizations by its developers (Arey 2013). Now we will
talk about Eastwood Refrigerator’s private limited, an Australian firm that is into business since
last 45 years and holds a significant market of refrigerator in Australia. The firm is experiencing
unexpected losses in their business, so in order to overcome these losses; they have decided to
install an accounting information system in to the computer systems of the organization. Earlier
the Accounting information system developers used to make software’s that were not customer
friendly and if they are installed into the systems then the client cannot make changes to the
software. The AIS developing companies understand this situation and made further changes and
now they are developing newer software’s that are customer friendly and the client can alter or
amend any feature of the new accounting information systems (Garg 2016). Below are the top
three popular accounting information systems that are currently being used in Australia (barbasor
2012).
 MYOB
 SAP
 Reckon-One
MYOB

The full form of MYOB is Mind Your own Business. It is one of the most used and preferred
accounting information systems that have been designed for small and large scale firms. The
developer of MYOB is Christopher Lee (Dahuja 2007). The official website of MYOB claims to
have active number 160000+ users in Australia alone.
SAP
SAP is considered to be the best for Mid-size and Large scale firms. It also has a large number of
active users. SAP is growing its market day by day and soon it may over take the market of
MYOB as SAP is really providing some best of the features a client wants. H.R, Finance,
Payroll, Digital supply chain, Customer Engagement and commerce are the services which they
provide. SAP uses cloud based storage data system that gives the client a full proof security. The
information is available on a click. SAP is best suited for mid and large scale firms (Q S R,
Limited Service - Unlimited Possibilities 2011).
Reckon-One
Reckon-One is again, accounting information system that uses cloud based storage system. It is
designed to help small and medium scale industries. It is widely used still not much popular as
MYOB & SAP. Many individuals like accountants and auditors use this accounting information
system for their work (bhonsle 2013). It also has a good number of users in Australia and New
Zealand.
Coming to East wood private limited, they are using the SAP AHANA accounting information
software that not only provides them with theoretical information but also help them in practical
processes of decision making and others (Bactor 2012). Following are few plus points that have
made Eastwood to choose SAP:
 Customer Friendly: SAP is considered to be the most customer friendly accounting
information system. It is easy to use and let the client make any changes even after the
installing of the system.
 Economical: A big reason to choose SAP is that it is economical; every organization
wants to spend less and get more.
 Confidentiality: SAP provides confidentiality over the information of the organization
only people with authentication code can access to such information. SAP uses cloud
based data storage system to secure the information.
 Custom-Made: SAP provides its client a feature of altering and amending the software.
If at any point the client feels of alter the features of the software he can do even if the
system is already installed and working.
Organizational Structure

An organizational structure is that structure which an organization follows, to operate its day to
day and long term operations. It is a structure that describes the hierarchy in an organization; it
shows who is at the higher end and whom he will direct. In case of Eastwood Refrigerator’s
private limited they are using a Line Organizational structure in their firm. A line organizational
structure is that structure in which there is mainly one boss and he directs all the other who is sub
ordinate to him. There are different departments in the firm that is headed by sub heads and the
departments are not inter-linked (Thether 2016). A diagram given below will help the audience
to understand, how a line organizational structure works (Kumar 2011).
Now as you can see the structure is showing that on the top most point there is a managing
director who has sub-ordinates like sales and production manager, then they both are sub-
ordinate by sales person and workers. Now if u sees more into details the sales and production
department are not interlinked. However they are accountable to managing director but they are
not accountable for their actions to each other. Here is where the problems occur in this type of
structure. Sales department will not have any information about production department that what
and how much they are going to produce and vice-versa, which will not only affect the working
of the organization but will also effects its profitability (Rosewell 2013).

If the Eastwood PVT LTD wants to choose between a custom made software, commercial
software or ERP then they must go with the custom made software as it is the Eastwood
Company itself that knows about its requirements. If they choose custom made software then
they can with the help of a third party develop an accounting information system that could be
altered and amended according to the need of the hour.
Part - 2
Adoption
The adoption of accounting information system is not new. The need for accounting information
system raised a long way back. However it is now when every company wants accounting
information software to be installed into their organization. No company wants to keep its record
in the piece of papers. Even the smallest of the organizations are adopting such software’s not to
just match their steps with modern time but to give their employees a better and a tireless
working environment. It is more than 60 years to the invention of these software’s, however
earlier they were underground as they were only used in fewer firms and that too which were
made by themselves but now they into the limelight and every firm is waiting in a queue to get it
installed (brain 2014). It would be not wrong to say that the SAP is ruling the Australian market
with its vast features including the one that let its client to alter and to amend the features.
Current Market Size
The Australian accounting information market is currently being influenced by the three top
popular brands namely; MYOB, SAP & Reckon-One. SAP as we have chose for Eastwood
Organization has a vast market share after MYOB (Adele 2011). It enjoys a large number of
customer’s in and around Australia. SAP has a big squad of different software’s that has a large
number of features. The market share of SAP is around 19% and it has a total cost of ownership
of around $2.9 AUD million. SAP is now being considered by almost every large scale firm of
Australia and New-Zealand (Techie 2014).
Gaps & Challenges
It would be wrong if one say that this software’s are fully error free and provides 101% security
of the data. Technology is really advanced now no doubt but still it hasn’t reached a spot where it
can’t be conquered. Same is in the case of accounting information systems. Few gaps and
challenges of faced by these software’s are as under (Kontio 2005):

 Security: If at any point the security provided by this software’s gets hang or delayed, a
computer hacker won’t even waste a single second and will hack the systems of the
organization. It is mostly happens with government websites and with their systems.
 Not so economical: These custom made software’s are not so economical, few of the
firms spends on such software’s more than they earn, which ultimately results in their big
losses.
 Technical support: These software’s are not so customer friendly, a client needs
professionals to operate these software’s and in case if any problem occurs the
accounting information companies do not provides any technicians which again results in
the waste of money and time and efforts.
Recommendations
The accounting software’s firms in order to overcome these challenges and to maintain their
market must look into this matter. They must work and develops such software that can’t be
hacked, which are more users friendly and provides such software’s at a reasonable amount.
Conclusion
After observing all the informational facts about the accounting information system software’s a
detailed and a brief conclusion provided here. The future of accounting information systems
companies are bright, however they need to work on such software’s that cannot be hacked and
that are not so expensive. It is their moral responsibility also to provide such software’s at a price
that can be paid even by the small firms. Eastwood refrigerator PVT LTD needs to work on its
organizational structure. They might be earning a good amount of profits in the present but this
kind of structure gives problems in long run. Eastwood Company as they are right now operating
at a mid scale and soon they will achieve the tag of large scale firm, so SAP is the best choice as
it is designed for medium and large scale firms.
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