Holmes Institute: HA2042 Accounting Information Systems Report

This report, prepared for the HA2042 Accounting Information Systems course, examines the adoption of accounting software within businesses, focusing on the benefits of cloud-based solutions for financial transaction management and reporting. The report evaluates and compares the features and...Read More

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Accounting Information Systems

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Executive Summary
The report has examined the benefits of adopting accounting software within business
firms for easy maintaining and reporting of financial transactions. In this context, the comparison
and evaluation of different features ad functionalities of XERO and MYOB is evaluated in the
report. The report ahs recommended the use of MYOB accounting software for managing its
huge financial data related to development and selling of its diverse products and services.

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Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
Background......................................................................................................................................4
System Requirements......................................................................................................................5
Software Selection...........................................................................................................................5
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

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Introduction
There has been significant increase in the adoption of cloud computing accounting
software within Australian firms as per the Australian Bureau of Statistics. The concept of
accounting software lies within the Accounting Information System (AIS) and can be regarded
as the use of computer software in recording and processing of accounting transactions. As such,
this report is developed for evaluating and recommending the use of cloud-based accounting
software for an ASX listed company from the perspective of a management consultant of a firm.
In this context, it has specifically provided a description of the client and its business activities
and processes. The description of the software features and functionalities required by the
company is also provided within the report developed. The description of the accounting
software packages that are, MYOB and XERO and a comparison of their features are also
included within the report. This is followed to provide the recommendation of the most suitable
vendor and accounting software package for the company to be used.
Background
Description of the Client & its Business Activities
Wesfarmers, a supermarket giant within Australia, is regarded as one of the largest
employer within the country. The company conducts its business in various segments including
home improvement, outdoor living, apparel, general merchandise, office supplies, industrial
division and is involved in providing chemicals, energy, fertilizers and industrial and safety
products. The company has been established in the year 1914 and since then has evolved as
largest retail conglomerate within Australia and New Zealand. It is regarded as the largest private
employer within Australia and has the presence of about 220,000 employee base (Wesfarmers: a
diversified corporation, 2017).
Key Business Processes
The key business processes of Wesfarmers are discussed as follows:
 Product Development: This involves all the processes involved in developing a product
such as sourcing, manufacturing, designing and packaging that leads to creation of
product
 Quality & Process Improvement: This involves checking the quality of the products
developed and identifying the gaps in the business processes for developing measures to
overcome them
 Marketing: This involves development of strategies for selling the products developed to
the customers with the use of effective marketing approaches

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 Employee Development: This involves development of strategies for managing and
controlling employees so that they are able to perform their work roles and
responsibilities
 Financial Analysis & Capital Management: This involves development of accounts by
recording the financial transactions carried out for determining profits. Capital
management involves examining the capital needs of the company and determining the
sources of acquiring capital such as from debt or equity (Robbins, 2014).
System Requirements
Software Features and Functionalities to be considered by Wesfarmers for Supporting its
Business Activities
Wesfarmers is regarded as the most diver company in the retail sector of Australia as it is
involved in providing different types of products and services. The company deals in various
industries due to versatility of its products and therefore requires the use of ERP (Enterprise
Resource Planning) software for managing adequately its diverse operations. This type of
software is best suited for Wesfarmers as per its needs of managing its complex managerial and
accounting operations (Crozier, 2018). The major advantage of the use of this type of software is
that it will help the company to centralize all its diverse operations and thus facilitating quick
decision-making. The company is recommended to adopt ERP software that is hosted on a cloud
computing platform that enable users to gain access to software applications that is on a shared
computing resource (Zinghini, 2017). The use of cloud based software would enable the
company to simplify the management of its complex accounting operations due to development
and selling of different types of products. The use of a could based accounting software would
enable in reducing the paper work and time involved in recording of financial transactions
involved in development and ales of its various types of products. The diverse accounting
processes such as maintaining of sales ledger, purchase ledger, cash book, trial balance, adjusting
entries and development of financial reports could be performed in an easy manner with the use
of a ERP based accounting software. Thus, the effectiveness and efficacy of accounting software
can be regarded as major factors that lead to its adoption within the company financial
accounting process (BPO Connect, 2014).
Software Selection
Part 1: Brief overview of two accounting software package vendors that provide cloud
based accounting software and brief description of their products
MYOB
MYOB has its full name as “Mind your Own Business” and it is first Australian vendor
that has provided the cloud based accounting software. MYOB is famous for providing tax and
accounting software services for all categories of business enterprises. MYOB has been listed o

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the Australian stock exchange and it falls under the information technology industry. There are
number of accounting packages provided by MYOB that helps the business in Australia to solve
their accounting needs and also allows them to process for payroll and tax formalities as per the
formal guidelines of Australian taxation law and payroll taxation. The accounting software
provided by MYOB has ability to get connected with cloud platform and provide services to the
client as and when they want to access it (Mageto, 2017).
The accounting products provided by MYOB have been divided into two major
categories and their basis of division is according to business size:
 For Small and Medium Size Business: For small and medium size enterprises Myob
has provided three categories of accounting software, namely Myob Essentials, MYOB
ACCOUNTRIGHT and MYOB ACCOUNTEDGE. Myob Essentials is available on
online platform only and it is best for new & smaller businesses. Whereas MYOB
ACCOUNTRIGHT is advance version software which has to be installed on system and
it can be get connected to the cloud system of Myob. It offers facility of job tracking and
inventory management. It also allows to process payroll with ease and also allows
processing requirement of Australian tax. Lastly MYOB ACCOUNTEDGE is designed
for complex accounting process and it is based on MacOS and can be access offline.
 For bigger enterprises: The Myob accounting software provides ERP based solutions
for bigger firms. Myob designs powerful accounting software that is complete modified
to suite the requirement of business. Some of Myob software packages are Myob EXO,
Myob Advanced, Myob PayGlobal and Myob Greentree. Myob EXO is powerful
accounting software which is completely flexible and adaptable to on premises ERP and
HRM solutions. Myob Advanced is completely customized software that is designed to
suit the cloud based business management platform (MYOB, 2017).
Xero
Xero is accounting software package providing company based in New Zealand and it
provides software packages for small and medium size enterprises business. The accounting
software packages provided by Xero are based on Software as a Service (SaaS) Model and this
software is sold through subscription. Subscription is based on type and number of companies
that are entitled to use the product.
Xero offers only web based product that can be accessed through its website only. The
key features of Xero accounting software includes automatic banking service, credit card
transactions, invoicing, payroll transactions, business reporting and management reports. It has
unique feature of API that allows integrating the third party software with Xero (Marsden, 2013).
Part 2: Comparison of features and functionalities of two cloud based accounting software
(MYOB versus XERO)

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Comparison chart based on functions and features
Type of Feature or
functions
XERO Accounting
package vendor
MYOB Accounting
package vendor
Best software
Cost or price
The subscription of
Xero is available on
monthly basis which
is divided as starter
($25), standard ($50)
and premium ($60).
Premium package
has facility of adding
payroll of 5
members.
Myob offer two board
categories of accounting
package: Myob
Essential and Myob
AccountRight. Both of
these accounting
package are further
divided into three
categories based of
requirement such as
Starter, plus and
premier.
Cost of Xero is
very low but when
compared with
features and
payroll facility it is
suggested to use
Myob.
Firms that can be
added per subscription
Only one company
can added
It allows two firms in
single subscription Myob
Ease of Installation and
sign up process
It is accessible only
on Xero Website and
it has high security
features
Essential can be
accessed online while
AccountRight requires
offline installation
process. It comes with
very high security and
can be with password
Myob is best as it
allows both online
as well as offline
process of
installation
Accessibility or system
configuration required
Any system that has
valid internet
connection can
make use of Xero on
its system (Windows
and Mac)
AccountRight can be
installed on MAC and
Windows and Essential
can be accessed through
webpage.
Myob
Payroll Limited Unlimited Myob

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Reporting
There is facility to
run multiple report at
a time
It can run one report Xero
Invoice Customized Invoice AccountRight provide
customized Invoice Xero
(Lane, 2018)
Part 3: Identification of most suitable vender and accounting software package for
Wesfarmers
Wesfarmers is recommended to adopt the use of MYOB ERP accounting software for
managing its complex accounting systems and processes. This is selected as the most adequate
method for the company as it is all in one software package in meeting the demand of the
organizational operations. This is because Wesfarmers is involved in development of diverse
range of products and services and thus have to manage and co-ordinate extensive financial data.
It has to maintain huge inventory levels and MYOB provides the functions of inventory check
(Schaltegger, Etxeberria and Ortas, 2017). Thus, if the inventory amount is low as compared
with the future sales then MYOB can help in identification of the shortage in inventory so that it
can be increased for meeting the future demands. It would also ensure that the input data is
complete in all aspects and also ensures the accuracy of the data entered. The accurate data input
in the MYOB system would ensure the correctness of the output data and thus enabling the
company to provide accurate financial results. As such, it can help in managing large amount of
financial data for Wesfarmers and conducting accurate financial analysis and forecasting. It also
ensures that the financial reports developed are in accordance with the required reporting rules
and procedures (Crozier, 2018).
Conclusion
The report has inferred that ERP based accounting software such as XERO or MYOB are
largely being used by Australian firms for managing their complex financial transactions in an
easy manner. Wesfarmers requires managing of large amount of financial data as it is involved in
developing different types of products and therefore requires sue of MYOB for ensuring the
correctness in maintaining and development of its financial records and assisting correct
decision-making.

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References
BPO Connect. 2014. Australian Small Businesses Lead the Cloud Accounting Adoption.
[Online]. Available at: https://bpoconnect.com.au/australian-small-businesses-lead-cloud-
accounting-adoption/ [Accessed on: 8 May 2019].
Crozier, R. 2018. Wesfarmers builds out advanced analytics centre. [Online]. Available at:
https://www.itnews.com.au/news/wesfarmers-builds-out-advanced-analytics-centre-496652
[Accessed on: 8 May 2019].
Lane, S. 2018. Xero vs MYOB: Which will work better for your business. [Online]. Available
at: https://www.listonnewton.com.au/information-centre/xero-vs-myob-which-will-work-better-
for-your-business [Accessed on: 08 May 2019].
Mageto, J. 2017. Accounting Softwares in Australia. An Overview. Germany: GRIN Verlag.
Marsden, S. 2013. New Zealand Master Bookkeepers Guide. New Zealand: CCH New Zealand
Limited.
MYOB. 2017. About Myob. [Online]. Available at: https://www.myob.com/au/about [Accessed
on: 8 May 2019].
Robbins, S. 2014. Management. Pearson: Pearson Australia.
Schaltegger, S., Etxeberria, I. Á. and Ortas, E. 2017. Innovating Corporate Accounting and
Reporting for Sustainability–Attributes and Challenges. Sustainable Development, 25(2), pp.113-
122.
Wesfarmers — a diversified corporation. 2017. Who we are. [Online]. Available at:
https://www.wesfarmers.com.au/who-we-are/who-we-are [Accessed on: 8 May 2019].
Zinghini, F. 2017. Xero vs. MYOB – Which Accounting Software Is Best For Your Small
Business?[Online]. Available at: https://www.fieldgroup.com.au/xero-vs-myob-accounting-
small-business/ [Accessed on: 8 May 2019].

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