Cloud-Based AIS: MYOB Essentials & Xero Analysis Report, ACC2002

This report analyzes cloud-based accounting information systems (AIS), specifically focusing on MYOB Essentials and Xero. It begins with an introduction to accounting and the evolution of AIS, highlighting the advantages of cloud-based systems over traditional desktop software. The report details the requirements for adopting cloud-based AIS, including organizational needs and user knowledge. It then compares the advantages and disadvantages of MYOB Essentials and Xero, such as accessibility, data security, and user-friendliness. Furthermore, the report discusses the strategic use of cloud-based AIS for IS/IT-enabled innovations, emphasizing automation, improved decision-making, and reporting capabilities. The conclusion summarizes the key findings and the importance of cloud-based AIS in modern business operations.

Running head: ACCOUNTING INFORMATION SYSTEM
Accounting Information System
Name of the Student:
Name of the University:
Author’s Note:

1ACCOUNTING INFORMAITON SYSTEM
Executive Summary:
This report is prepared to demonstrate the use and effectiveness of cloud based accounting
software, which a business organisation can use for recording their daily business transactions
and for preparation of their final financial statement. Cloud based accounting system is a
computerised automated information system, which gives all the accounting treatment the books
of accounts upon a primary entry of a business transaction in the system. It can also be used for
preparation and issue of invoices, debit notes, credit notes and some other essential business
documents. There are various such cloud based accounting information systems are available in
the market, and MYOB Essentials and Xero Cloud based accounting information system is much
popular of them. In this report, the need for adoption of cloud based accounting systems and their
implications have been explained briefly.

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Table of Contents
Introduction:....................................................................................................................................3
Accounting Information System:.....................................................................................................3
Cloud based Accounting Information System:................................................................................4
Requirements for Adoption of Cloud Based Accounting Information System:..............................5
Advantages of using MYOB Essential and Xero:...........................................................................6
Disadvantages of using MYOB Essential and Xero:.......................................................................7
Strategic use of Cloud based accounting information system for IS/IT enabled Innovations:.......8
Conclusion:......................................................................................................................................9
References and bibliography:........................................................................................................10

3ACCOUNTING INFORMAITON SYSTEM
Introduction:
Accounting is the process of recording, classifying, summarising and preparation of the
final financial statement. The objective of accounting is to prepare meaningful information for
the users of financial information for their decision making process. Before the era of
technological revolution, accounting activities have been done manually with the help of books
of accounts and writing every transaction in the physical books of accounts. With the
technological revolution and innovation of various advanced computer based accounting
information systems, the process of book keeping and accounting have been computerised with
the help of certain advanced accounting information systems. In this report, the essence of
adoption and application of such Accounting Information Systems have been analysed. There are
certain advantages and disadvantages associated with the application of such cloud based
accounting information system, which have also been discussed in this report (Bhimani and
Willcocks 2014).
Accounting Information System:
Accounting is a continuous process of recording transactions in the financial books of
accounts and summarising them and preparing meaningful information. The whole system of
accounting is intended to provide with some meaningful information to the financial information
users for their decision making process (Bhimani and Willcocks 2014). Therefore, the
accounting starts with the recording of raw data or transactions and ends with the preparation of
final financial statements and various other reports. As the information users uses the output of
accounting system for their decision making process, those information must be accurate and
free from any error. Manual accounting might have such errors and inaccuracy. To eliminate

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such errors and inaccuracy from the accounting information, various computerised accounting
systems have been developed. Accounting information systems is a fully automated or semi
automated computerised system which process with all the business transactions and prepares
required financial information with a given command over it (Bhimani and Willcocks 2014). It
needs the raw data to be entered manually or even automatically and rest of the accounting
process it completes itself. There are two types of such accounting information systems, one is
the desktop accounting software and the other is the cloud based accounting information system.
Desktop accounting systems are mainly for single use in a single desktop computer and cannot
be access through the internet, whereas, the cloud based accounting information system can be
accessed through the internet from anywhere. In the following paragraph the need for adoption,
application, advantages and disadvantages of two such cloud-based accounting information
systems have been discussed.
Cloud based Accounting Information System:
Accounting information system means a computerised software package, which can be
used by business organisations for recording their business transactions ad it will automatically
process those data and will prepare the desired reports automatically. Desktop accounting
information systems or desktop accounting software can be accessed through a single place at a
time, and it cannot be used from a different location through the internet or a remote use. Also in
desktop accounting software, all the information is stored in the hard disk drive of the computer,
which has a risk of loss of data due to damage of the computer or the hard disk. Information
sharing is also an issue with the desktop accounting information systems (Rikhardsson 2017). To
eliminate those disadvantages the cloud based information systems have been developed.

5ACCOUNTING INFORMAITON SYSTEM
Cloud based accounting information system is a web based fully automated accounting
systems which can be accessed through the internet from anywhere. It only needs the user
identification number and the password to enter into the system and to enter the transactions. The
main characteristic of the cloud based accounting information system is its accessibility through
the internet and storage of data in the cloud based servers. All the information is stored in the
web and there is no such chance of data loss as it can easily be recovered from the web again.
One more important feature of the cloud based accounting system is its user interface. Its user
interface is very user-friendly which allows the user to record the transactions and generate
reports without having much accounting knowledge. Some example of best cloud based
accounting information systems are, MYOB Essential Cloud based accounting information
system and Xero Cloud based accounting information system. In the following parts of this
report, the requirements for adoption of such a cloud based accounting information system and
its advantages and disadvantages have been discussed (Bhimani and Willcocks 2014).
Requirements for Adoption of Cloud Based Accounting Information System:
If the business organisation is having various operating units located at different
locations, then it can be suggested to adopt the cloud based accounting information systems, as it
enables the organisation to record all the business transactions in the same data base and to
compile the overall business reports from a single accounting system. There are many other
importance for adoption of accounting information system, such as, it helps in generating
meaningful financial reports as and when required just by a single command over the cloud
based system. In addition, the report can be generated and accessed from anywhere in the world
having the internet connection. To operate such an information system in the cloud, the operators
need to have a minimum knowledge of the accounting and bookkeeping. They also need have the

6ACCOUNTING INFORMAITON SYSTEM
knowledge of basic computer applications. There must be a proper control over the access level
and authority of the users at different levels of the organisation and they must be working within
their assigned authority (Rikhardsson 2017).
If an organisation need to adopt such a cloud based accounting information system, they
need to register their organisation with the details of their organisation. An annual subscription
needs to be paid to the host company for using the information system. Then the host company
will provide the access to the accounting information system and will provide the user
identification number and password. Then various administrators’ roles need to be defined and
access levels need to be specified for every user. For example, if an organisation wants to use the
MYOB Essential cloud based accounting information system, then they need to register their
organisation with the MYOB Essential cloud based system and they need to pay the annual
subscription. All the existing accounts and account balances along with the account receivables
and accounts payables information need to be recorded in the MYOB Essential. Then with the
primary company set-ups and access levels, they can start recording their business transaction
into it. They can generate required accounting and financial information easily from it with a
detailed analysis of the information. One more important and very user-friendly cloud based
accounting information system is the Xero Cloud based accounting system. Xero is more user-
friendly and easy to use. It also enables to make the payments directly from the accounting
systems to the employees and suppliers (Rikhardsson 2017).
Advantages of using MYOB Essential and Xero:
MYOB Essential is most popular and renowned cloud based accounting systems, which
is used in various countries. In Australia, also a significant number of business organisations use

7ACCOUNTING INFORMAITON SYSTEM
this accounting system. MYOB is having both the desktop accounting software as well as the
cloud based accounting system. MYOB desktop accounting software is also used by various
organisation since a very long time. There are certain limitations and access restrictions for the
MYOB desktop software and to overcome those issues the MYOB Essential cloud based
accounting system can be used. The most important advantage of the MYOB Essential and Xero
cloud based accounting systems is its access from anywhere in the world through the internet.
Another more important advantage of the system is the incorporation of existing accounting
process and accounting details in the system directly from the MYOB desktop accounting
software (Collier 2015). The MYOB Essential and Xero accounting system allows the user to
send a particular report to any individual through email or any other internet based sharing
system directly from the MYOB Essential and Xero Cloud based accounting system. It can be
used in point of sales for preparation of the invoices and debit credit notes and issuance of
receipt vouchers. Preparation of the payroll vouchers and payment to the employees can be made
directly from the MYOB Essential and Xero directly from the organisation’s bank account.
Preparation of meaningful information in the form of reports, such as age receivables, age
payables, incomes statement, balance sheet and general journals help the organisation for their
accounting and information needs. It is a very less time consuming process as most of the
accounting operations are done automatically by the system itself (Collier 2015).
Disadvantages of using MYOB Essential and Xero:
MYYOB Essential and Xero is a completely cloud based accounting system, which is
used through the internet. It just needs a single user identification number and a password to gain
access to the accounting system (Schaltegger and Burritt 2017). Therefore, there is an
information security issue with the system. If in any way the user identification number and the

8ACCOUNTING INFORMAITON SYSTEM
password is lost to or hacked by any third party then they can enter into the company’s
accounting system, which may result into a huge loss of information. On the other hand, the user
interface of the MYOB Essential is complex in nature and without having a proper knowledge of
accounting; it becomes difficult for the user to use the system (Schaltegger and Burritt 2017).
Strategic use of Cloud based accounting information system for IS/IT enabled Innovations:
With the revolution in the business and with the advancement of the technologies, various
management information systems and accounting information systems have been developed for
helping the management in their decision making process. Innovation is the key behind the
survival of every business organisation. As the demand for the products and services increases,
the volume of the business also increases and to serve the customers with a better products and
services experiences, business organisations need to adopt certain technological innovations in
their internal and external business process. As the business organisations adopt innovations in
their product and service offerings, they also need to adopt innovations in their business
operations. Use of advanced management information system can be given as an example of
information and information technology based innovation in the business process (Tarmidi et al.
2016).
Adoption of cloud based accounting information system is the most important
information technology based innovation in the business process that an organisation can have in
present business scenario. It automates most of the accounting process of the organisation and
helps in better decision making and reporting by generating meaningful information in the form
of reports. It also helps in presenting and analysing that information, with the help of charts and
graphs (Tarmidi et al. 2016).

9ACCOUNTING INFORMAITON SYSTEM
Conclusion:
From the above discussion and analysis, it can be concluded that, use of accounting
information system helps an organisation to manage their accounting process efficiently and to
generate meaningful reports for the use of management and various other stakeholders. There are
certain risks and issues associated with the adoption and application of such a cloud based
accounting information system. It saves labor costs due to automation of most of the accounting
processes. It also helps is keeping track of all the transactions and applying an internal control
system easily on the accounting system. Therefore, it must be adopted and used with due care
and with adequate knowledge of accounting and bookkeeping. Lastly, it can be concluded that, a
successful adoption and use of an advanced cloud based accounting information system can help
an organisation to have IS/IT enabled innovation in their business process.

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Brandas, C., Megan, O. and Didraga, O., 2015. Global perspectives on accounting information
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Cleary, P. and Quinn, M., 2016. Intellectual capital and business performance: An exploratory
study of the impact of cloud-based accounting and finance infrastructure. Journal of Intellectual
Capital, 17(2), pp.255-278.
Collier, P.M., 2015. Accounting for managers: Interpreting accounting information for decision
making. John Wiley & Sons.
Ismail, N.A. and King, M., 2014. Factors influencing the alignment of accounting information
systems in small and medium sized Malaysian manufacturing firms. Journal of Information
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Libby, R., 2017. Accounting and human information processing. In The Routledge Companion to
Behavioural Accounting Research (pp. 42-54). Routledge.
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Maskell, B.H., Baggaley, B. and Grasso, L., 2017. Practical lean accounting: a proven system
for measuring and managing the lean enterprise. Productivity Press.

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Muda, I., Wardani, D.Y., Maksum, A., Lubis, A.F., Bukit, R. and Abubakar, E., 2017. THE
INFLUENCE OF HUMAN RESOURCES COMPETENCY AND THE USE OF
INFORMATION TECHNOLOGY ON THE QUALITY OF LOCAL GOVERNMENT
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