Accounting Systems Analysis: Xero and MYOB for Wesfarmers Limited

This report presents a comparative analysis of Xero and MYOB, two prominent cloud-based accounting systems, evaluating their suitability for Wesfarmers Limited, a large Australian company with diverse business operations across multiple countries. The report begins with an executive summary, providing an overview of the advantages of cloud-based accounting and highlighting the specific needs of Wesfarmers, including inventory management, multi-currency support, and integration with existing business processes. The background section introduces Wesfarmers Limited, detailing its various business activities and the importance of an effective financial system for its success. The system requirements section outlines the essential functionalities a cloud-based accounting system must possess to meet Wesfarmers' needs, such as invoicing, inventory management, and multi-currency capabilities. The software selection section then delves into a detailed comparison of Xero and MYOB, discussing their features, advantages, and disadvantages. The report concludes with a decision, recommending Xero software as the most appropriate accounting system for Wesfarmers due to its comprehensive features, international capabilities, and ease of use. The report emphasizes Xero's ability to handle multi-currency transactions, integrate with existing business processes, and provide detailed financial information to support management decision-making. The report also touches upon the security concerns associated with cloud-based systems, highlighting the need for robust data protection measures.

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Executive Summary
Xero software is one of the best cloud-based accounting systems that are available for
Australian companies. They are listed in the Australian stock exchange which makes it a huge
and successful company. For any progress to take place in an Organisation, change has to take
place by doing things that were not done before. Wesfarmers Limited is an organization that
deals with different products in multiple states where a more effective accounting system could
result in the growth of the business. Cloud-based systems is the future of accounting since they
make the bookkeeping process fast and easy to understand. WYOB software is not a bad
accounting system, but it is more focused on the Australian accounting system with very few
considerations to the other countries. Wesfarmers Limited operates in different countries, and it
will be advantageous to the organization if they could find an accounting system that could
compile all their clients into the same system and help the organization by determining their total
cost of operations and amount of revenue generates from all operations. The best accounting
system for Wesfarmers needs to provide all the services required by the organization.

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Table of Contents
Executive Summary.......................................................................................................................2
Introduction......................................................................................................................................4
Background Information..................................................................................................................4
Wesfarmers Limited....................................................................................................................4
System Requirement....................................................................................................................5
Software Selection...........................................................................................................................5
Xero Software..............................................................................................................................6
WYOB Software..........................................................................................................................8
Decision...........................................................................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

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Introduction
One of the most considerable advantages of having a cloud-based system is that the
business is always up to date with the recently implemented regulation and it is easier to file tax
returns and keep company records compared to a desktop accounting system. A cloud-based
accounting system helps the user to access accounting information from anywhere. It is also easy
to attach files to the date entered on a database (Du and Cong, 2015). This report looks at the
advantage Wesfarmers Limited could have in using a cloud-based accounting system. The best
applications to compare are Xero and MYOB software. They are both internationally recognized
accounting system that is used in multiple countries. The aim is to find the best option for
Wesfarmers Limited to implement as a cloud-based accounting system.
Background Information
Wesfarmers Limited
Wesfarmers Limited is a company that is located in Western Australia with multiple
businesses that include coal mining, the sale of fertilizers and chemicals, and the production of
industrial and safety products (Group, 2019). It is one of the leading companies listed in the
Australian stock exchange owned by multiple shareholders. It is a profit based organization with
the aim of providing its shareholders with satisfactory returns through some of their objectives
and goals. The company aims to anticipate customer needs and delivering quality goods as
expected. They believe in teamwork and care for the environment within which the company
operated. Profit making is not the only goal of the organization; they also participate in
community development projects and value integrity and honesty in all their business
transactions (Group, 2019).

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All the business and extra-curriculum activities are only possible if the financial planning
organization is effective. Wesfarmers Limited is involved in numerous business activities as
stated above and proper management of resources is a major factor in the success of the
organization. The best cloud-based accounting system should be able to integrate all the business
processes of Wesfarmers by identifying individual business operations in the system and finding
a way of making the financial operations of the organization more effective (Christauskas and
Miseviciene, 2012). The major operations of Wesfarmers are done from the headquarters of the
organization in Australia.
System Requirement
Wesfarmers Limited requires a cloud-based accounting system that performs inventory,
invoicing, and multi-currency operations. This will help the organization monitor all the good
they have in store, and the number of sales they have made in all the countries the organization
operates (Ciger and Kinay, 2017). All these financial operations have to be explained by
attaching files to a particular set of financial data to provide clarification to the management. A
good cloud-based system for Wesfarmers should also be able to create purchase orders for clients
since it will be simpler to compile all transaction when they are handled on one system. It is also
an advantage for Wesfarmers if the accounting system could claim expenses according to the
Taxation Acts of Australia and in all the countries, the organization is operating.
Software Selection
Xero and MYOB softwares are both cloud-based accounting systems that are based in
Australia and affordable to Wesfarmers Limited.

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Xero Software
One of the basic services Xero provides is invoicing services. They have business invoice
templates that can be customized according to their client’s preferences. The only thing
Wesfarmers will have to upload is the business logo and all the business information they would
like to appear on the invoices (Xero, 2019). This makes it easy to invoicing all business
transaction. All information will be available in the system. The customers who operate on credit
can be remaindered continuously by the system automatically through mail according to the
number of times set by Wesfarmers. Invoices that are fulfilled they can b closed in the system
and the same data updated in all the relevant sections (Xero Accounting Software, 2019).
Business inventory is an essential factor for all organization. They affect the amount of
taxes an organization has to pay, and it has to be managed effectively (Xero, 2019). Companies
practice monthly stock taking to identify goods that have been sold, those that are still in
production, and those that are complete but not yet sold. Xero software will enable Wesfarmers
to keep track of the stock levels and its value. It is an effective way of identifying the amount of
stock available and sales made daily. The software has the capability of calculating the value of
the inventory available using the average costing method. Wesfarmers is a retailer and even a
wholesale supplier of its products, which makes the software very effective in its operations.
Accounting information such as the data found in the balance sheet and income statement
is very hard to understand if it is not accompanied by files such as invoices and bills justifying
how the revenue was spent (Xero, 2019). Xero software provides a platform where such
information can be shared with the management in an organized manner for easier
understanding. The customers can also be supplied with additional information that explains the

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information found on an invoice. The information is subsequently attached to individual
customer files for better organization of information. The system can be used as an online filing
system for accounting information.
A company that operates in multiple countries is prone to make mistakes in their
accounting due to the fluctuating exchange rates. Xero software enables the company to have
client accounts in various states, and their exchange rate is updated hourly (Xero, 2019).
Wesfarmers can set the currency preference for individual client accounts while doing their
financial computation, and the software will automatically update the date in case of any
fluctuation. The hourly updates enable the business to know the exact financial cost of each
transaction and the amount of money generated
One other important factor about Xero software is it is easy to use. The organization can
control their cash flow, and it also makes it possible to pay suppliers in batches at one go.
Expenses are also easier to handle on this cloud-based accounting system. The Chief financial
officer has to review the receipts on the software and make the appropriate payment. With fast
approval of receipts and efficient way of managing cash flow, Wesfarmers Limited will be able
to maximise on all its business activity and identify areas where improvements can be made.
All the mentioned points are important for a cloud-based accounting system, but
organization prefers to keep their financial information a secret for their business security (Ficco,
Palmieri and Castiglione, 2014). All accounting records need to be kept in Wesfarmers private
servers, but Xero comes with its own servers. Security could be an issue if a third party can
access the data from Wesfarmers Limited. This is a major disadvantage of using a cloud-based
accounting system.

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WYOB Software
Just like the Xero software, WYOB is a cloud-based accounting system that allows the
business to conduct efficient accounting and financial record keeping. Through this software, it
is possible to compile expenses and carry out monthly employees salaries. Financial information
is constantly uploaded into the software that can be used both offline and online depending on
the preference of the business.
Having a system that can manage invoices, pay bills, and manage expenses is very good
for Wesfarmers Limited as they reduce the time spent in preparing financial reports and focus
more on business operations (Myob.com, 2019). The software is s advanced that it can be linked
to the business accounts for easier management of the cash flow.
The software is also able to generate invoices that are directly mailed to the clients, and
payments made can be done directly using the invoices generated from the software. All these
financial information play major roles while filing for taxes in Australia (Myob.com, 2019). All
tables in the software are automatically updated when any information is added to the software.
The software automatically does any tax computation related to the business, and the content can
be accessed from anywhere.
The main disadvantage of this software compared to Xero software is that it is more
focused on the Australian market putting multinational corporations such as Wesfarmers Limited
at a disadvantage. Computation of all exchange rates will have to be done separately before the
data is entered into the software.

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It still possesses a security threat just like Xero software where data is stored in the
softwares private servers and if they were to be accessed by another party it would cause a lot of
business harm to the organization. They do not offer many services like Xero software, and those
that they do provide are also available in the other application (Myob.com, 2019). It is a good
accounting system when it comes to storage of accounting information and computation of taxes
in Australia, but Wesfarmers Limited would still be required to use other means for all their
international business records due to the limitation of the software. The software is effective in
Australia with the implementation of all tax regulations as required by the taxation office.
Wesfarmers would benefit significantly from using the software but it would not be enough for
all their business transaction. A good cloud-based system should perform all the financial
requirements of the organization.
Decision
Wesfarmers limited deals with products as retail and wholesaler-distributors in more than
one country. The most appropriate cloud-based accounting system would be Xero software. To
start with, the company is also listed on the Australian stock exchange implying that it is a large
company that is able to handle all the business requirements of Wesfarmers Limited.
Xero software is the best option to provide all the accounting requirements for the
organization. They can easily identify the amount of revenue generated from all their transaction
regardless of the currency used in the transaction. They also need a system that provides
accounting information with additional primary information such as invoices and paid bills to
help the management in understanding the accounting information they receive and make
decisions accordingly. Xero invoicing system allows businesses to customize the templates
which are advantageous for Wesfarmers limited since the clients will not see any changes in the

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invoices they receive. Inventory taking is also emphasized on the software where an additional
application can be applied to monitor the stock of an organization effectively, especially where
the company deals with different products at once. It is faster and more reliable compared to the
traditional QuickBooks that are still popular among businesses.
Conclusion
A cloud-based accounting system comes has its own advantages and disadvantages like
any other system applied in businesses. Wesfarmers Limited aims at maximizing its shareholders
return and Xero software would be very useful in achieving this goal. All financial requirements
for the organization can be found in the application making it easier to prepare the financial
statements as required by the management of the organization. It also means that the accounting
department will do less work, but it is more effective than the traditional desktop accounting
systems.

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References
Ciger, A. and Kinay, B. (2017). A field work to determine effectiveness of cloud based
accounting on accounting professionals. Pressacademia, 3(1), pp.104-117.
Christauskas, C. and Miseviciene, R. (2012). Cloud–Computing Based Accounting for Small to
Medium Sized Business. Engineering Economics, 23(1).
Du, H. and Cong, Y. (2015). Going Cloud for Agility: Beyond Financial, System, and Control
Motives. Journal of Emerging Technologies in Accounting, 12(1), pp.153-167.
Ficco, M., Palmieri, F. and Castiglione, A. (2014). Modeling security requirements for cloud-
based system development. Concurrency and Computation: Practice and Experience, 27(8),
pp.2107-2124.
Group, D. (2019). Who we are. [online] Wesfarmers.com.au. Available at:
https://www.wesfarmers.com.au/who-we-are/who-we-are [Accessed 22 May 2019].
Myob.com. (2019). Online Invoicing Software for Small Business | MYOB Australia. [online]
Available at: https://www.myob.com/au/accounting-software/invoicing [Accessed 22 May
2019].
Myob.com. (2019). Online Invoicing Software for Small Business | MYOB Australia. [online]
Available at: https://www.myob.com/au/accounting-software/invoicing [Accessed 22 May
2019].
Myob.com. (2019). Cloud Accounting Software | MYOB Australia. [online] Available at:
https://www.myob.com/au/accounting-software/online-accounting [Accessed 22 May 2019].

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Xero Accounting Software. (2019). Online Accounting Software – Free Trial, Free Support |
Xero. [online] Available at: https://www.xero.com/ [Accessed 22 May 2019].
Xero. (2019). Xero online invoicing and invoice reminders | Xero. [online] Available at:
https://www.xero.com/features-and-tools/accounting-software/invoicing/ [Accessed 22 May
2019].
Xero. (2019). Manage inventory, stock and items in Xero | Xero. [online] Available at:
https://www.xero.com/features-and-tools/accounting-software/inventory/ [Accessed 22 May
2019].
Xero. (2019). Multi-currency accounting in Xero | Xero. [online] Available at:
https://www.xero.com/features-and-tools/accounting-software/multi-currency/ [Accessed 22
May 2019].
Xero. (2019). Xero file library | Xero. [online] Available at: https://www.xero.com/features-and-
tools/accounting-software/files/ [Accessed 22 May 2019].