Accounting Systems in Australia Samples †MyAssignmenthelp.com

Question: Discuss about the Accounting Systems in Australia. Answer: Introduction Accounting software packages systems are used to collate data about a business and report on its financial viability. It allows you to structure expense accounts andincome, for instance, advertising expenses, rental or sales income, material costs and salaries. They also can be used to wield pay bills, bank accounts and prepare budgets. Some accounting software also permit you to handle payroll, prepare tax documents and manage project costing depending upon the system. Current Organizational Structure The hierarchy in the accounting department helps to make sure that finances are managed responsibly and effectively. The following shows the organizational structure of companies that uses accounting software. Chief Financial Officer- Also called the vice president of finance is the top most senior executive of an accounting organizational hierarchy. This office directly reports to the business owner or CEO. His/her role is to ensure that all areas of accounting are carried out in accordance with policies of the company. Financial Controller- Many firms have a financial controller that reports to the Chief Financial Officer but has more detailed accounting responsibilities. The controller manages daily expenses and ledgers, assigns duties to other accounting employees and communicates with the Chief Financial Officer to ensure companywide financial decisions are made. His/her input is considered advisory since s/he is not a member of the executive team. Division Managers- The financial controller will generally have three major reports in bigger companies, that is, the payroll manager, accounts receivable manager and the accounts payable manager. According to Aquinas, (2010), in smaller firms, one division manager can perform all these duties, or they may be carried out by the controller or Chief Financial Officer. Under any circumstances, these divisions represent the main elements of the accounting structure. Their roles are to manage salaries, expenses and incomes. Accountants and Clerks- Accountants and clerks work for the division managers. These are specialized professionals with knowledge in, managing expenses, tracking income, Human Resource policy and administering payroll. Interns- organizations of all sizes employ intern, students or young professionals to assist them in doing the daily activities of the accounting division. These young professionals can be paid or unpaid, but typically their roles will be at the lowest rank of the hierarchy. They may help in filing, research, data entry, and among other administrative duties allocated to them by their managers, who are usually either the controller or the division managers. Operational Problems A firm with a good organizational structure enjoys the advantages of enhanced communication with the ability to develop a common company message and a well-designed hierarchy. As much as the organizational structure can be efficient, it can also bring about problems that can cause internal conflict and loss of productivity. Johnson, (2012). Some of the problems encountered are; Departmental Loyalty- There can be mentality of us versus them among different groups. For instance, sales may feel frustrated with accounting because credit terms for new clients are not getting approved. New Management- The company tend to settle into a way of carrying their roles that they feel is comfortable and efficient for the existing management team, if there have been no changes for a long time. Changes in management, can put pressure on the organizational structure of a company. The new management, may lack knowledge with the way things were done and may come up with new ways on how things should be run in an organizational structure. Confusion- Without effective communication, new processes and ideas can get confused. Managers may start to put more efforts trying to claim some parts of a process as their own. Confusion can slow down production if departments fail to get their responsibilities clearly. Company Goals- If there is inadequate consultation between the upper management and other departmental managers during creation of departmental goals, the company runs the risk of not achieving its objectives. Effectiveness of an organizational structure, requires upper management to seek the input of the rest of the company employees to develop company goals and objective. System Acquisition Method The most likely system acquisition method would be commercial software. This is because it is the dominating accounting software used across the world. It is relatively configurable to the requirements of a business. It has several layers of error detection to avoid the entry of wrong information. It generates standard reports that can be customized to meet users needs. Enterprise resource planning and custom software, may not be the preferred methods because they are expensive, takes time to install, buggy and requires regular maintenance. Wahlen, Bradshaw Baginski, (2014) System Flowchart of the Sales Procedures Sales system flowchart defines a series of activities taken to achieve a particular result. It also refers to the series of actions that sales manager in an organization follows to close a deal with a customer. Control Problems and Possible Frauds in the Accounting System Computer time theft- Information generated by an individual can be claimed by another person that the data is his own and he is the actual generator. In computer systems original copy and duplicate copy terms does not exist. Macintosh Quattrone, (2009). Program manipulation- A competitor, rival or an intruder can modify, delete or manipulate one or more program parts of an organization rendering the full software unusable. Theft of information- Information stored in a computer can be transferred into external storage and could be sold to competitors. With enhancement of communication technology, employees of the company may transfer confidential data of a company to another. Hackers can tap to a network and extract data. Theft of software- This is the most experienced crime in computers systems. Company employees or staff may copy the software bought by a company and transfer it to his personal computer. Extra rules, policies and controls can be implemented to protect hardware and software from unauthorized use. Access control- The first system security should be hardware and software control. The system should be kept under lock and key to avoid theft of the hardware. Electronic and physical access control techniques including limited after-hour, keyboard locks, restricted access to systems and automatic logs should be implemented. Passwords- Provision of passwords should be made at all system security levels. Changes should be made frequently or when required to prevent unauthorized users from accessing the system resources. Backup Copies- It is recommended to perform frequent backups of all software and store them differently from the usual storage media. Backups are normally taken on external media such as disks and cloud which are later used to restore data when raw data from the system fails. It is also necessary to take backups of software programs. Development and Adoption of the Accounting Software Packages Some years ago, the demand and utilization of cloud based accounting software was minimal in Australia. Traditional forms of accounting were dominant among business firms. For instance, they used manual accounting entries such as use of pen and paper in the early 1980s. However, evolvement of a number of spreadsheets and accounting software had modified accounting system function in the country. Emergence of accounting cloud based software in Australia like Quick books, Xero and among others has led to an evolution in the functions of the accounting system in the business firms. The cloud based software are integrated in nature, internet based and easy to use. These have stimulated the popularity growth of accounting software packages in the country. Accounting cloud based software packages has become a simple accounting package to a company management tool. Mageto, (2017). The Current Market Size Business accounting software market is predicted to grow at a compound annual growth rate of 6.3% over the forecast period that is 2017 to 2024 globally. The world market for business accounting software was estimated at revenue of USD 3.2 Billion in 2016 and is envisioned to meet a valuation of USD 4.4 Billion by the end of prediction period. Sudden emergence of mobile application of business accounting and the need for efficient way to manage accounts of small organizations are expected to be the changing factors behind the flourishing of world business accounting software market. Deep analysis of the global business accounting software market involves the following areas: manufacturing, service and retail. Smith, (2015). Leaders in the Market and their Competitive Advantage Xero Accounting is one of the cloud-based accounting software that leads in the market. It was developed specifically for medium and small businesses. According to GRO?NFELDT STROTHER, (2006), it was first introduced in New Zealand in 2006 and became a popular buzz globally. The company further thrived mainly in Australia. Since Xero Accounting is structured to meet the basic needs of small and medium business, its user-centric interface is made easier for performing daily transactions by its developers. Some of their competitive advantages are; Its cloud based- Xero Accounting was developed up for the cloud unlike its competitor QuickBooks. Cloud computing implementation on the platform fastens the process of updating entries in real time. This henceforth yields to timely assessments and regular analysis of the present financial standing of a firm, thus accelerating its growth. Another benefit the cloud is giving is its accessibility. Accessibility of accounts anytime and anywhere by users is made possible whenever theres an internet connection. Smith, (2015). It is Simple and Intuitive UI - Xero Accounting software was built for individuals who arent much into accounting, but also good enough for accounting expertise. Its well-arranged structure makes it a fun to use. Other competitive benefits of Xero are, its great integration system, unlimited collaboration of users, it has rich features, processes are fast and easy to set up and it is reasonably priced. Challenges Encountered by Users of Accounting Software Some of the problems faced by the users include; Inadequate security- Software customers feel that the security of their data is at stake as they can be accessed by third parties. Weak reporting service- Users finds it disappointing that a system easily accepts their data but almost impossible to retrieve them yet some of accounting software solutions are powerless in assisting them.Clarke, (2008). Lack of efficiency- Some accounting software products lack capabilities, compatibility, expend abilities and some features that are not user-friendly therefore consuming a lot of time. Outdated lack of accuracy- Due to outdated of some accounting software systems, system errors happen, details tend to be inaccurate and system slows down. Recommendations To counter these challenges, the company should ensure that the following are adhered to: Install and regularly update system firewall so as to detect and prevent any third party access. Report is a very important part of any system. Therefore, an accounting system should facilitate generation of standard reports by users that ca be customized depending on the need and use of the report. Ensure that when sourcing out for accounting software should consider usability and customizability of the program. This will ensure user friendliness of the system and thus customers can interact with it easily. Accounting software should be updated gradually to deal with bugs and security threats arising due to rapidly evolving technology. Conclusion In conclusion we find that accounting software have their several advantages which include: simplicity of data entry, automated reports and analysis, speeds up processes, automated functions and reduced errors. However, it also has some disadvantages that comprises of price-its expensive, implementation-its complex and requires expertise. References AQUINAS, P. G. (2010).Organization structure and design: applications and challenges. New Delhi, Excel Books. CCH INCORPORATED. (2008).Top accounting issues for 2009: CPE course. Chicago, CCH. CLARK, M., EATON, M., MEEK, D., PYE, E., TUHIN, R., CLARK, M. (2012).Australian small business: key statistics and analysis. [Canberra], Dept. of Industry, Innovation, Science, Research and Tertiary Education. CLARKE, S. (2008).End user computing challenges and technologies: emerging tools and applications. Hershey, PA, Information Science Reference DAFT, R. L., MURPHY, J., WILLMOTT, H. (2010).Organization theory and design. Andover, South-Western Cengage Learning. DENTCH, M. P. (2017).The ISO 9001:2015 implementation handbook: using the process approach to build a quality management system HANSEN, D. R., MOWEN, M. M., GUAN, L. 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