Adoption of the Accounting Software Package

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Requirement

Each student will write a literature review of NOT more than 2500 words. The review should demonstrate that the student has thoroughly researched their topic. Students should use examples of business practice from the scholarly journals papers, conferences, books and professional magazines to support their arguments 
The literature review would be on an organisation (company) that is using accounting software packages in Australia. The research would cover:  
 
PART 1 
1. The current organizational structure 2. What operational problems (e.g., inefficiency, errors) do you think the organisation could experience because of this structure? 3. What is the most likely system acquisition method— commercial software, custom software, or ERP? 4. Describes and prepare a system flowchart of the sales procedures for the chosen organisation (company)  5. Identify any control problems in the system and what sorts of fraud are possible in this system? 

PART 2 
1. Development and adoption of the accounting software packages,  2. The current market size,  3. Identify the leaders in the market and what gives them the competitive advantage, 4. Identify the current gaps or challenges encountered by users or customers of accounting software/packages and make relevant suggestions or recommendations

Solution

Strategic Information System

Introduction

In order to fully understand the situation of business Accounting Software is one of the vital tools. Accounting software also helps the businesses to determine the level of business performance. It also helps in running a successful venture (Jones and Jones, 2016). The standard and appropriate accounting software are one of the valuable tools to save time and money. Accounting software plays a significant role within the organization in order to determine the level of performance of the business. The following are the major functions of accounting software (Kowalewski and Niedzielska, 2015); 

  • General ledger: the general ledger is the major accounting book of an organization. It is the record of total financial transaction of business. It contains all the required accounting information which is needed to prepare a financial statement of the business. It also includes accounts for revenue and expenses, equity of owner, assets, and liabilities.

  • Account Payable: account payable enters bills and pays out money to where it is payable to creditors such as overheads or suppliers. 

  • Account Receivable: it records money which is received from debtors such as customers or clients. 

  • Billing: billing manages invoices which aregiven to customers for the products and services.

  • Purchase order: purchase order can be created through accounting software. The purchase order is a commercial paper which is issued to sellers that indicates quantities, types, as well as the agreed price for the goods and services.

  • Stock: Accounting software also record the current stock level of the organization in order to ensure an efficient level of stock.

  • Sales order: Sales orders which are confirmation documents sent to the customers before delivering the product can also be created with the help of accounting software. Accounting software also allows the business to keep a record of orders from the customers.

  • Bookkeeping: financial affairs of the organization are recorded in bookkeeping. 

A large number of organizations are using accounting software in order to improve or enhance their efficiency as well as effectiveness. In Australia, commercial banks are using accounting software and also encouraging owners of small and medium enterprises to use the accounting software due to its effectiveness. One of the leading banks in Australia which uses accounting software is Commonwealth Bank. Commonwealth bank uses accounting software in order to increase its efficiency and effectiveness. 

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Organizational Structure of Commonwealth Bank

Organizational structure describes how the functions of the organization are directed to accomplish the goals and objectives of the organization. Organizational structure helps the organization to achieve its goals and objectives within the given timeframe. Organizational structure also determines the flow of information within the organization (Schlagwein et al., 2014). The activities that the organizational structure directs can include the following; roles and responsibilities, and rules. Here is the organizational structure of commonwealth bank.
 
The topmost body of the organizational structure of commonwealth bank is "Board of Commission." The board of commission of the commonwealth bank constitutes of President Director, Audit Committee, Risk Oversight Committee, Remuneration, and Nomination Committee. The board of director consists of Director of SME Banking, Director of Risk, Director of Operations and IT, Chief of Compliance, Legal and Corporate Secretary, Chief of Finance and Treasury, Chief of Human Resource, Head of Corporate Strategy and Digital Solutions, Head of Customer Franchise and Decision Science, Head of Marketing, Communication and Financial Inclusion, Chief of Audit Executive. All the mentioned departments have been further segmented into various sub-departments in order to function accordingly and effectively so that organization can achieve its goals and objectives effectively. 

Operational Problem of the Organization due to its Organizational Structure

Every organizational structurehas some advantages as well as some disadvantages. It should also be considered that every organizational structure does not suit every organization. Therefore, the organizations should choose their organizational structure carefully which suits the functioning of the organization. Organizational structure plays an important role in determining the success of the organization because it significantly affects the efficiency as well as the effectiveness of the organization. There is some possible operational problem that commonwealth bank might face due to its organizational structure (Willcocks and Reynolds, 2015). The first problem that the commonwealth bank might face is the potential conflict due to the violation of the principle of unity of command of the authority. As the organization is following functional authority organizational structure, there might be a conflict of the violation of unity of command. If the lower level manager is directed the employees or selecting a particular process of accomplishing the task without consulting the higher level manager, there would be a conflict of the violation of the principle of unity of command. 
On the other hand, another possible problem that the organization might face is the propensity for keeping authority consolidated at the higher levels in the organization. A delegation of authority is also one of the major problems of the company. It might affect the efficiency of the organization because the upper authority might not delegate their authority and all the major decision would be taken by them. Decision making is a long-term process, and it requires a lot of skills and competencies (Willcocks and Reynolds, 2015). If the upper manager took all the decision themselves, it would take lot more time and hence the efficiency of the organization would decrease significantly. Due to the decrease in the organizational efficiency, the performance, as well as productivity of the organization, would also be affected.

Most Likely System Acquisition Method of the Organization

Commonwealth Bank has a variety of business activities as well as several operational activities. Therefore, the organization should go for ERP that is enterprise resource planning software. The organization should go for enterprise resource planning software because it can rationalize all the operation of the business. Enterprise resource planning software also provides on time information to the organization and its various departments. Enterprise resource planning software is best-suited software system for commonwealth bank because it would help the organization to develop and maintain a better database as well as storage system of the organization than the commercial software (Kilic et al., 2015). ERP system also helps the organization in order to make it all the departments such as operational departments coordinated among themselves. ERP system also improves customer services and other services of the organization. 

Enterprise resource planning system also has the potential to provide support to the banking sector in the field of consumer behavior and identifying the preference pattern of the customers. It helps in providing better customer services to the potential customer to increase the level of satisfaction of the customers. Enterpriseresource planning system also helps in identifying the error and reduces the chances of occurring of error further. Therefore, the most likely system acquisition method of the organization is enterprise resource planning system. 

System Flow Chart of the Organization

System flowchart can be described as a graphical representation of the flow of information or data within the organization. It also represents the system’s work process. The system flow chart of the commonwealth bank would start with the target customers as well as the development of the product or services that the bank provides to its target or potential customers. The target customers of the commonwealth bank are the people of Australia. The bank has categorized its target customer into various categories such as the young couple or newly married couple because it provides home loan facilities. There are several products of the bank, and hence it targets people according to its products and services (Caampbell, 2016). All those people who want to use the banking services are the potential customer of the organization. As soon as a potential customer inquires about the banking services the sales procedures of the bank starts. A customer can seek information regarding services such as the benefit of services, cost of services, any complementary services, rates of interest, duration of service or maturity period of the services, etc. In order to convince the customer to utilize the services with attractive offers or possible discount, the sales executive would provide the detail information about the services its benefits and cost. 
After comparing the services of the organization with others, the customer would purchase the services of the organization if they find its services relatively beneficial. The customer would purchase a particular service of the organization. The bank also provides an online option to its customer to purchase the services of the bank. The customer can avail the services of the bank with a single click of a mouse (Campbell, 2016). It is also obvious that the flowchart of sales procedure of the bank would be different for the regular customer. So, when the customer purchases the product or services of the bank the sales procedure completes. 

Control Problem in the system and Possible Fraud in this System

Every system is supposed to have some sort of problem which can be raised during the operation of the business. There would be several control systems related problems that the commonwealth bank could face during the banking services. It is possible that the sales executive can make false promises to its potential consumers regarding the rate of return, the service charges, the actual cost of service, the complimentary service, maturity period of services, etc. It would damage the image of the bank in the market which is a serious concern. In the banking sector, the highest number of fraud has been registered. The highly risky thing in the banking sector is online banking or banking services (Baz et al., 2016). Hundreds and thousands of cases have been registered related to payment fraud. So the security is also one of the major control problems of the commonwealth bank. There is a high chance of being cheated through online networks. There are some third parties who mediate the services of the bank between the bank and the customer. Sometimes they also charge high price from the customer instead of the actual price of the product or services (Baz et al., 2016). 

Part2 

Development and Adoption of the Accounting Software Package

The accounting software of the organization should be user-friendly for the employees as well as it should be able to record all the transaction of the bank correctly systematically. It should be user-friendly to make the employees efficient to reduce the time taken by the employees. The accounting software of the bank should reduce the process of recording the information as well as enhance the efficiency of the employees. It should also enhance the efficiency of the storage system so that maximum information can be stored (Rahman et al., 2015). The accounting software of the organization should be capable of providing necessary information to the different departments of the organization instantly so that right decision can be taken within the organization. The retraction process of the accounting software should also be quick as well as secure to extract the required information. Out of all the accounting software available in the market, enterprise resource planning system is best suited for the commonwealth bank because of its nature of business and complexity. Therefore the organization should develop and adopt enterprise resource planning system within the organization.

The Current Market Size

With the advancement of technology and introduction of globalization, commonwealth bank has expanded its business all over the globe. It is providing banking services all over the globe. The customers of the bank are also from all over the world. It has more or less 1100 branches and 4300 ATMs. The total revenue of the bank in 2017 was A$ 26.005 billion. The net income of the bank in the same year was A$ 9.881 billion. Total equity, as well as total assets of the bank in 2017, was A$ 63.716 billion and A$ 976.374 billion simultaneously (Mcllroy, 2017). Commonwealth bank is providing its services to more than 1 billion customers throughout the world.

Leaders in the Market

There are various market leaders in the market who are operating successfully and gaining handsome profit in the market in the banking sector. Some of the leaders of the banking sector in Australia are Australia and New Zealand Banking Group, National Australia Bank, Westpac Bank, and Bank of Queensland. Online banking is one of the major sources of competitive advantages of these banks (Brummer, 2015). These banks are operating on a larger scale, and these banks have a larger online platform. Quality customer services also give a competitive advantage to these banks. The quick response of these banks is also providing competitive advantage along with the security of the transaction.  

Current Gap or Challenges

There are many challenges or gap that the customers of accounting software are facing. It is difficult to make accounting software customize. It is also not user-friendly due to which the efficiency of the employees decreases (Dhar, 2018). The current challenges that the customer of accounting software is facing are the lack of security, weak reporting service, lack of efficiency, not user-friendly or difficult to customize, expensive as well as lack of feature, poor customer relationship management, etc. 

Recommendation

The accounting software should be more than traditional software means it should be flexible enough to be customized according to the needs of the organization. It should also be user-friendly so that efficiency of the employees can be improved. One of the major challenges of this software is the problem of security. Thus the software should ensure the security to gain the trust of the user and customer.

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Conclusion

Development and implementation of new accounting software are important for the businesses in order to get successful in the market. It provides a competitive advantage to the business. But the commonwealth bank should recognize the needs and requirement in order to decide on implementing the accounting software within the organization. The enterprise resource planning system would be beneficial for the organization due to its nature and complexity of the business. 

References

  • 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.

  • 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.

  • Schlagwein, D., Thorogood, A., and Willcocks, L.P., 2014. How Commonwealth Bank of Australia Gained Benefits Using a Standards-Based, Multi-Provider Cloud Model. MIS Quarterly Executive, 13(4).

  • Willcocks, L. and Reynolds, P., 2015. The Commonwealth Bank of Australia–strategizing from outsourcing to the cloud part 1: perennial challenges amidst turbulent technology. Journal of Information Technology Teaching Cases, 4(2), pp.86-98.

  • Kilic, H.S., Zaim, S. and Delen, D., 2015. Selecting “The Best” ERP system for SMEs using a combination of ANP and PROMETHEE methods. Expert Systems with Applications, 42(5), pp.2343-2352.

  • Campbell, I., 2016. Towards Customer Leadership.

  • Baz, R., Samsudin, R.S., Che-Ahmad, A., and Popoola, O.M.J., 2016. Capability component of fraud and fraud prevention in the Saudi Arabian banking sector. School of Accountancy.

  • Rahman, M.M., Ahammed, M., Uddin, M., Rouf, M. and Uddin, M.M., 2015. Obstacles and implementation of accounting software system in Small Medium Enterprises (SMEs): Case of South Asian perspective.

  • McIlroy, J., 2017. Re-nationalise the commonwealth bank. Green Left Weekly, (1149), p.11.

  • Brummer, C., 2015. Soft law and the global financial system: the rule is making in the 21st century. Cambridge University Press.

  • Dhar, S., 2018. Operational Route Accounting ERP Software Service: Benefits and Obstacles.

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