Impact of Information Technology on Accounting Systems

Question: Discuss about the Impact of Information Technology on Accounting Systems. Answer: Introduction The research in the academia and practice has hugely emphasized on the changing role of the accounting function has resulted from the advent of the changes in the Information technology over the last decade (Franks, 2014). The adoption of the IT tools and the techniques used for the accounting has substantively changed and enhanced on the way many companies operate in Australia. It has improved on the timely aspect, the qualitative and comprehensive delivery of the services to the clientele they serve. (Franks, 2014)The evolvement of the Information Technology has increased the efficiency of the financial transactions processing as the adoption of the computerized packages generated the improvement to the quality and the quantity of the information that is made available more so to the management for the decision-making. Besides, the use of the IT equipment and the facilities that are developed over time has necessitated on the assembling of the integrated application by the manufact urers of the software (Jones, 2016). The use of the accounting software to the management of the accounting information evolved many decades ago and in the recent times, it has become an integral part of many organizations in Australia. It is also significant to note that the degree of the implementation differs from one business to another, the size, and the industry (Jones, 2016). The deployment of the accounting software in these organizations has become an integral to every strategy of the corporate. Moreover, the acquisition of this software to supporting the processes of the financial transactions in business today is vital for the company to attain success and it depend mostly on the feasibility of how the corporate is aligned, their enterprises and the level of operations of their strategies. (Lim, 2013) The aspect of aligning IT and the business plan is a fundamental key to success in any business seeking competitive advantage. It is also important to understand that the deployment of this software does not com e without the prohibitive cost of the implementation process (Klooster, Allen and Owen, 2014). On this research, it would cover the history of the accounting software in Australia, the development, and the adoption. Moreover, the paper will also explore on the leaders in the market and what makes them have a competitive advantage. The challenges the customers also encounters on the use of this software and the provision of suggestions and recommendations. Literature review The completive environment in which the companies are operating in is becoming more and more challenging. Many of the companies are increasing on the data to use the complicated and advanced accounting software in Australia to react appropriately to the external market pressure. Many businesses in Australia mostly use various accounting packages so of these are MYOB, Xero, Intuit QuickBooks, Saasu, and Reckon (Chen and Yang, 2013). The QuickBooks is one of the widely used accounting software by the small business owners in Australian. The major aspect contributing to the popularity of this software is the price, which is standard, and the overall levels of the features it has. Individuals thus use this to track their business on the income, expenses and the profits. (Ossadnik and Kaspar, 2013) The MYOB is the top rated and the best accounting software in Australia. The platform of this software was designed from scratch to perform the accounting functions and to help the business own ers increase on their profitability to make better decisions on a real-time view of the financial operation of the firm. For the retailers that operate in Australia, the MYOB accounting software is more than the store register. The design of the software has an interface, which can point the sale transactions that can be integrated into the whole business operations. (Chen and Yang, 2013). Besides, the interface for the software can work both online and offline which makes the design to be superb. On the Reckon software, is essentially used by the medium-sized businesses in Australia like; accountants, bookkeepers. The use of the software provides businesses to perform the point of sale transactions since it can link one sales operations and the desktop software suite through the POS system (Schiff and Szendi, 2014). The use of the software is for the small business, and it has comprehensive features that suit a given type of business. On the Saasu accounting software, it is claimed to be the future of the accounting. The use of this software the Australian company can prompt be able to perform on the cash flow cashing with just a click, and there is no need for the extra setup or synchronizing of the software. Another software is Xero, which has the capabilities of the real-time data. (Alamin, Yeoh, Warren and Salzman, 2015)This software is the most sought out in that it has over half a million subscribers who are using their platform. The software is designed to over online invoicing, and the business owner receives an update when the customer opens the bill. The software has an advanced process of reconciliation that allows one to import and categorize on the bank transactions (Ren and Gu, 2014). Market leaders and competitive advantages The market leaders in the accounting software in Australia are Saasu and Xero since they are cloud-based software market. The use of the cloud software gives the middle sized and the larger SMEs in Australia to be able to implement enterprise software at a fraction of the deployment and the costs of the ownership. (Tang, Yan and Kang, 2013) In Australia, many of the organization from small to large are now replacing the traditional accounting software with the online cloud accounting software. According to research, twenty-seven percent of the business and sixty-7 percent of accounting firms in Australia have already migrated to the use of the online cloud accounting software. The competitive advantage of the utilization of this cloud-based software is essentially due to its features of enhanced security, increased functionality and the reduced cost of IT. The use of the online accounting is simplified due to the aspect of access to the data from any of the location and the remote wo rking capabilities. (Lam, 2015) The Xero software is the one that is mostly regarded as the market leader since it has a platform that focuses on eliminating the inefficiencies in the processes of accounting. In the use of these, software does not involve the manual processes; it can automatically pull the data from the bank feeds, the reconciliation, and can categorize the transactions within seconds (Tang, Yan and Kang, 2013). Challenges encountered by the users of accounting software The accounting software, which gives the users problems are the ones that are regarded as outdated and not friendly to the user. Some of the challenges they encounter are as below. One of the challenges is a lack of the security (Kowalewski and Niedzielska, 2015). The users of the accounting software are worried that their data may be accessible to the third party even though the availability of the firewall is there to solve this problem. Another challenge is the inefficiency. The users of the software want things to be done quicker with less time consuming. Some of the accounting software products are usually not user-friendly and do not enable the users to optimize fully on them. (Kowalewski and Niedzielska, 2015)They may lack features; there are issues of compatibility and the capabilities to adequately perform a given task. There is also the aspect of the difficulty of customizing on the software. Due to the issue of the restrictions of the system, the users of the software are not able to customize based on their preference. Some of this software are difficult and cluttered to understand. Lastly, there is an issue of the compatibility of the software (Lim , 2013). Many of the users are sometimes so frustrated because their accounting software is not compatible with the programs they are using. One such example is when the customer is not able to import or retrieve the information from the other programs since their accounting software does not have the capacity. Recommendations on using the accounting software All the companies from medium and large have experience problem associated with accounting software use from time to time. The rational aspect of these societies is to know how to solve the problem when they arise. Many of the users are worried about the issue of lack of security on this system especially when a third party get access to their private information. The best thing to tackle on the issue is to invest in securing this software. The companies need to have firewalls that are updated and security protocol to prevent a breach of the system. There is also need of having a system that is up to date and user-friendly. (Lam, 2015) With the advancement of the cloud-based computing software, there is a need to adopt these on the organization to have the competitive edge and to be more efficient in delivering the services. Customer needs to have the system that they can customize to their preference and a system that is compatible with their programs. There is a need to adopt the s oftware that is user-friendly and efficient in the delivery of the services. I would recommend many organizations especially those in Australia to take the cloud-based accounting software to have a competitive advantage over others. This softwares are efficient in that they reduce any inefficiencies in the processes of accounting. References Alamin, A., Yeoh, W., Warren, M. and Salzman, S., 2015, January. An empirical study of factors influencing accounting information systems adoption. In Proceedings of the Twenty-Third European Conference on Information Systems. ECIS. Chen, J. and Yang, D.C., 2013. The development of the computerization of accounting. Perspectives on Accounting and Finance in China (RLE Accounting), 8, p.229. Franks, J., 2014. LibGuides: Graduate Accounting Empirical Research: Statistical Software. Jones, D. and Jones, M., 2016. Using QuickBooks Accounting Software to Improve Financial and Production Records for Better Decision Making. In 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas (No. 229772). Southern Agricultural Economics Association. Klooster, D.A., Allen, W. and Owen, G., 2014. Integrated Accounting. Cengage Learning. Kowalewski, M. and Niedzielska, J., 2015. A Study of the Financial Accounting Software Used by Small Enterprises in Olsztyn. Olsztyn Economic Journal, (10 (3)), pp.233-245. Lam, G., 2015. The Online Accounting Software Guide: An In-depth Analysis of Today's Leading Cloud Accounting Applications. Lim, F.P.C., 2013. Impact of Information Technology on Accounting Systems. Asia-PasificJornal of Multimedia Services Convergent with Art, Humanities and Socialgy, 3(2), pp.93-106. Ossadnik, W. and Kaspar, R., 2013. Evaluation of AHP software from a management accounting perspective. Journal of Modelling in Management, 8(3), pp.305-319. Ren, M. and Gu, W.L., 2014. Research on the Applications of Cloud Computing in the Accounting Modernization. In Applied Mechanics and Materials (Vol. 687, pp. 2756-2759). Trans Tech Publications. Schiff, A. and Szendi, J., 2014. Helping Small Business Entrepreneurs Avoid Critical Mistakes in QuickBooks Accounting Software. The Entrepreneurial Executive, 19, p.169. Tang, X., Yan, C. and Kang, Y., 2013. The Internal Control of Computerized Accounting in Information Era. In 2012 International Conference on Information Technology and Management Science (ICITMS 2012) Proceedings (pp. 437-442). Springer Berlin Heidelberg.