MYOB Software Implementation and Analysis for Electrical Business

This report examines the transition of John and Jane's electrical company from a manual accounting system to online accounting software, specifically MYOB. The report begins with an abstract and then discusses the challenges faced by the company with manual accounting, including human err...Read More

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MYOB Exercise

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Contents
Abstract............................................................................................................................................3
PART A.......................................................................................................................................4
PART B...........................................................................................................................................5
Economic transactions that would take place at a small business:..............................................5
Benefits of using online accounting software..............................................................................6
Problems faced by John and Jane’s electrical company are:.......................................................7
How MYOB will be useful to John and Jane’s electrical company in respect of specific
economic transaction stated above:.............................................................................................8
Risks that John and Jane's Electrical Company may face in the implementation of MYOB......8

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Abstract
In the following assignment we will be discussing why John and Jane electrical company shifted
from manual accounting system to online accounting software tools and what are the advantages
and disadvantages of doing so.

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PART A
John and Jane run an electrical business since last 8 years. But, recently due to high demand in
electrical supplies and fitting they have planned to open 3 stores all in different locations. Earlier
they use to follow traditional manual system of accounting and now considering shifting to
online accounting because they faced lot of difficulties in maintains accounts manually.
They faced difficulties such as:
a. The accounts were prone to human errors. The electrical supplies business is such that lot
many number of transaction takes place in a day and there are high chances of mistakes
happening.
b. In accounting software reports are generated automatically. But, in manual accounting
reports are required to be created manually. Therefore, its takes longer time to generate
reports (Manual Accounting Systems - advantages, disadvantages and overview of
Manual accounts proceedures).
c. Manual accounting was suitable to John and Jane electrical when they were small
electrical business. But now they are planning to expand so manually accounting is not
viable at all.
d. In case of manual accounting there is a risk that their manual data might get destroyed or
get stolen and it is harder to implement disaster recovery plans (Johnsten).
e. Apart from above problems, manual accounting process is very time consuming process
as well. This requires a full time employee to take care of the accounts 24/7.
f. Now John and Jane will be having 3 more showrooms and large number of transactions
will be happening in a single day. So it will be impossible to maintain manual accounting
system.
So due to all these problems they decided to convert to online accounting software
because this has the following benefits:

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a. Online accounting system is user friendly. Once it is install the concern people just
have to enter the basic data and rest is all taken care of by the system.
b. In online accounting, data is stored online so one does not have to worry about the
security of data. In fact, in makes many customer transactions easy such as raising
invoices, receiving payments etc.
c. Online accounting makes many transactions easy such as employee’s incentives,
calculating discounts. And enterprise can view income and expense account in
comprehensive manner.
d. The most important benefit of online accounting is that it provides 100% accuracy
which is very important for any business to run successfully in long term
e. Online accounting provides cost effectiveness as well. The company just has to pay
the cost of software or else in manual accounting company has to bear employee cost
for managing the accounts.
f. Online work is not tedious and tiring. Therefore, it enhances productivity of
employees (Macaluso, 2011).
g. Online software’s provide company with the knowledge of the current trends new
business opportunities which helps company to grow.
PART B
Economic transactions that would take place at a small business:
1. Retail to customer (physically): this is the most prime and simple transaction to take
place in small businesses. In this the customer will be going to the retail store, placing
the order and making the payment.

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2. Retail to customer (not in person): in this the customer himself will not be going to
the store. He will place the order on phone and will make the payment along with
shipping charges at the time of delivery of goods.
3. Wholesaler to retailer: many retailers are not manufacturing the product they are
selling at the store. So in this case retailer will place the order with the manufacturer
of the goods and will make the payment as per terms and conditions (Newton).
4. Business to business: at times the purchase and sale transaction takes place between
one company and another company. In which one is the seller and other is the
purchaser.
5. Making salaries and allowances payment to employees
6. Taking care of other miscellaneous expenses.
Benefits of using online accounting software:
1. It provides real time reporting: the online accounting software system provides proper
details about the cash flows. So the business owners are having clear picture about the
current cash situation of the company and can take decisions accordingly. Business
owners can have access to income and expense account of the company anytime
anywhere and this really helps them to take decisions on day to day basis.
2. Fast reconciliations: having an online accounting system updated in the company
which is having more than one store is very beneficial. The system reconciles all the
transactions together without having any chances of errors and save lot of efforts.
3. Cost effective: installing online accounting system saves lot of cost. Because in
manual accounting system a professional employee is require all the time to take care
of all the transactions but in online accounting it is very simple and fast (Thompson,
2016)

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4. Security: online accounting software provides proper security to the financial records.
There is no risk of data getting lost or destroyed and the owner can check the accounts
(te banafits on online accounting software).
Anytime anywhere.
5. The data process manually has chances of errors and mistakes but data processed in
online system has no chance of having any error or mistake.
Problems faced by John and Jane’s electrical company are:
John and Jane running an electrical company since last 8 years there business is
doing well because of increased demands they have opened 3 showrooms in different
locations and they are following manual accounting system. The problems faced by
John and Jane’s company are as follows:
1. The company has to keep record of stock, tax, payroll, accounts receivable
accounts payable and many other things. So due to expansion reconciling the
accounts together is very difficult process.
2. In process of reconciling the accounts there is high chance of mistakes and errors
happening.
3. It is a very tedious and tiring job for the person doing the manual accounting
procedure. Because the concern person has to coordinate with all the showrooms
and have to keep very detailed tracks of all the activities happening on daily basis.
4. John and Jane cannot have the clear picture or position of the company because
income and expense account is not prepared on daily basis. Therefore, they face
difficulty in taking decisions.

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5. To compare individual store performance with other is a difficult task and to
identify the reason for good or bad performance of particular store is even more
difficult.
How MYOB will be useful to John and Jane’s electrical company in respect of
specific economic transaction stated above:
1. Retailer to customer (not in person): the case where customer is placing order on
phone or ordering online the MYOB software will be very usable to the company
because it will facilitate customer to make online payment and will generate the
invoice automatically.
2. Business to business transactions: at times apart from customers the other
businesses or competitors are our customers and benefit of MYOB software is
that it provides the enterprise with the information about the latest trends, current
scenario, market demand, competitors’ trend and lot more.
3. The benefit of MYOB software is that it provides automatic calculations of
employee payroll, commission and incentive. It also calculates customer
discounts and provides the status of income and expense accounts on regular
basis. This really helps the top management to formulate strategies and can also
evaluate company’s performance (myob case studies).

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Risks that John and Jane's Electrical Company may face in the implementation
of MYOB.
1. There is a risk that an unauthorized person may access the company’s data and
can make misuse of company’s confidential information. But to prevent this
risk company should have proper passwords for computer files so that only
authorized users can access the data and should also install firewall. Company
should also install virus scanners (myob security recommendations).
2. Mandatory internet connection: one can have access to data anytime anywhere.
But, if there is no internet connection available then all this won’t be possible.
So internet connection is mandatory requirement for MYOB.
Bibliography
Johnsten, K. (n.d.). Advantages & Disadvantages of Manual Accounting Systems. Retrieved from
http://smallbusiness.chron.com/advantages-disadvantages-manual-accounting-systems-
23862.html
Macaluso, J. (2011, 12 16). 9 Benefits of Online Accounting Software for Small Businesses.
Retrieved 10 4, 2017, from Getapp: https://www.getapp.com/blog/benefits-online-accounting-
software-small-businesses/
Manual Accounting Systems - advantages, disadvantages and overview of Manual accounts
proceedures. (n.d.). Retrieved 10 04, 2017, from http://www.accountsman.com/manual-
accounting-systems.html
myob case studies. (n.d.). Retrieved 10 05, 2017, from myob:
https://www.myob.com/au/enterprise/case-studies#?filterBy=Industry&filterByTag=All
myob security recommendations. (n.d.). Retrieved 10 05, 2017, from myob:
https://www.myob.com/au/about/security/security-recommendations
Newton, C. (n.d.). Six Types of Business Transactions. Retrieved 10 2017, from smallbusiness:
http://smallbusiness.chron.com/six-types-business-transactions-25729.html
te banafits on online accounting software. (n.d.). Retrieved 10 05, 2017, from efolioaccounts:
https://www.efolioaccounts.com/the-benefits-of-online-accounting-software/

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Thompson, J. (2016, 01 21). PJT accountants and business advisors. Retrieved 10 05, 2017,
from Top 5 Benefits of Online Accounting Software: http://blog.pjtaccountants.com.au/top-5-
benefits-of-online-accounting-software

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