History of accounting software

Discuss about the Business Software Development and its Implementation.

It is stated by Alamin et al. (2015) that small business software development and its implementation is quite viable today, and hence, it can be found in both big and small firms. It was argued by Apostolou et al. (2014) that financial software creation and its implementation in small scale business is highly challenging. Insufficient capabilities and external direction in accounting are some of the issues the small businesses have faced in the past.

This literature review focuses on the accounting software Xero, which the in Australia and its overview. Small firms of Australia usually use the financial software Xero. This study concentrates on the software inception, its development and adoption, limitations and its competitive advantage over other similar commercial financial software. At the end of this study, recommendations are made to resolve the issues the employees often face.

According to Clarke and O’Connor (2012), when Rod Dury and his personal accountant found that the traditional desktop accounting software has become outdated, they decided to implement a cloud based modern accounting software. In this way, Xero was founded by Rod Dury. The accounting software was officially established in the year 2006 in Wellington, which is located in New Zealand. The company entered the market in Australia and United Kingdom in 2008 (Environmental performance software for small businesses 2016). The accounting software company focuses on the Australian market for the development of   Xero.

According to Bernardos et al. (2014), the development and research of Xero account for millions of dollars. After researching for12 months, the information that is revealed is that sixty percent of the business of Australia fits in the cloud computing. Due to the unique features provided by powerful computing, small businesses in Australia are reading adopting it. Xero is adopted by the users of Australia at a remarkable speed. This is because Xero is cloud based and for development, the organizations are using Xero accounting software.

Xero is cloud based, and they provide some advantages to their clients. The first and most significant benefit are that the setup process of Xero is very fast and reliable. It does not require much time. It is stated by Burdon and Dovey (2015), that they provide certain information that helps in clarifying the fact about 4mation Technologies, which is utilized by the accounting software of Xero. The development process of Xero requires several steps, which includes sketching of ideas, building the prototype, enabling transaction and speeding the development. All this process are involved in the development of Xero as a result of which it provides better and best services at high speed.

Development and Adoption of Xero

The Accounting software “Xero” has grown up in a spectacular fashion. It provides accounting software to small business through the help of internet. As stated by Chua et al. (2012), the rise of the company is associated with the growing trend of moving the business from traditional accounting software. The company is growing exponentially from the last six years and as a result, the revenue collected is $30.3 million on a yearly basis (Environmental performance software for small businesses 2016). The main reason for growth that is cited by the company is a continuous investment in the field of product development.  As the share started rising by 493%, the company is facing challenges.

The price to sales rating of Xero stands at 88 times on a 12-month basis, which indicates that it is most expensive proportion as compared to other competitors in the market of Australia.  It is argued by Clarke and O’Connor (2012), that based on current market capitalism of Xero there is 80% rise in revenue in the year 2014. The customer’s acquisition and revenue numbers of Xero are increasing over 80%. If market share is concerned, then Xero has 19% of the market share of the New Zealand’s small business and 4% of the market of Australia.

From one country to another the distribution of accounting software is different. Xero is used in both large and small enterprises of Australia for business operations. As opined by Dunbar et al. (2016), Xero is the favorite choice of application in Australia. The software package covers almost 65% of the share of the market (Environmental performance software for small businesses 2016). According to some statistical figures, Xero is widely adopted in Australia for the unique features it offers. If large business enterprises are considered then, Xero is the accounting software that is mostly used, as it is faster as well as reliable.

MYOB dominates the financial market in Australia, but due to the unique features offered by Xero, it offers a strong competitive advantage in Australia’s financial market. According to Lim and Perrin (2014), Xero accounting software is cloud based. As a result, many extra benefits are offered to its users. The advantages it offers include accessibility and internet connection.  The users of Xero can access their account anywhere and at any time which is impossible for other accounting software of Australia.

Xero has great integration system, which helps in encouraging the collaboration with other app services, which will be beneficial for improving the processes. This type of collaboration with other app services is not present in any other accounting software. Xero has straightforward and intuitive UI.  It is stated by Ismail and King (2014), that Xero software is built in a way such that the accounting software is not only useful for accounting but also for the accounting professionals. The intuitive user interface helps in making it easier to use. Xero accounting software set up the process, which is very much easy as well as fast.

Current market size of the Accounting software

Xero accounting is reasonably priced and as a result, the accounting software is economically wise in the markets of Australia. It has the ability to auto-enter data as a part of reconciliation process which other accounting software cannot. All these features of Xero provide a competitive advantage in the market of Australia.

It is stated by Smith (2015), that the accounting software has certain disadvantages due to which it is facing some challenges.  Xero is not so much secure and for having better security the users have to use strong passwords for keeping it safe. If the security of the Xero is not maintained properly, then, critical accounting data can be hacked by the hackers. One of the challenges is that internet connection is very much important for accessing Xero. If a user does not have an internet connection, then Xero cannot be accessed. Poor internet connection does not allow a user to work on Xero efficiently.

Xero file can be accessed as long as the subscription is active and the disadvantage or challenge that the subscription is owned by the accountant. For having proper access over Xero, it is very much important to have a fast internet connection (Lim and Perrin 2014). The enterprises are avoiding automation process because the process is a little bit complicated. If a firm uses that process, then they have to train their workers. The software company also teaches their clients via webinars who are in need of the software.

Following are some suggestions that can help improve Xero are:

• New versions of Xero much include important features for developing the accounting software, which will help in benefiting the company as well as the international users of the software.
• Proper training must be provided to the new user of Xero so that the accounting software can be handled by them properly. Training also helps the workers to acquire knowledge about different duties such as payroll systems.
• The accounting software must be authenticated such that the data and relevant information cannot be hacked by the attackers.
• The Xero must be developed in both the fields of design and security for benefiting the users.
• It is very much required to change the online services of Xero so that the problems of slow internet connection does not hamper the task o the users.

Conclusion

It is concluded that Xero is widely used in Australia whether it is small enterprise or large enterprise. This is because of some of the unique features of Xero. With the introduction of cloud computing, Xero can be used independent of time and place. Some of the challenges and gaps of the accounting software are also discussed in this literature review. The most important challenge is that it is very much important to have an internet connection. A user cannot access the accounting software without having proper internet connection. The literature review of the paper provides some recommendation that will improve the accounting software much more in order to provide benefit to the users. It is very much important to have new features in every new versions of the accounting software.

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.

Apostolou, B., Dorminey, J.W., Hassell, J.M. and Rebele, J.E., 2014. A summary and analysis of education research in accounting information systems (AIS). Journal of Accounting Education, 32(2), pp.99-112.

Bernardos, C.J., De La Oliva, A., Serrano, P., Banchs, A., Contreras, L.M., Jin, H. and Zúñiga, J.C., 2014. An architecture for software defined wireless networking. IEEE Wireless Communications, 21(3), pp.52-61.

Burdon, S. and Dovey, K.A., 2015. Exploring the cultural basis of innovation.Journal of Innovation Management, 3(3), pp.20-34.

Chua, Y.L., Cheong, C.S. and Gould, G., 2012. The impact of mandatory IFRS adoption on accounting quality: Evidence from Australia. Journal of International Accounting Research, 11(1), pp.119-146.

Clarke, P. and O’Connor, R.V., 2012. The situational factors that affect the software development process: Towards a comprehensive reference framework. Information and Software Technology, 54(5), pp.433-447.

Dunbar, K., Laing, G. and Wynder, M., 2016. A Content Analysis of Accounting Job Advertisements: Skill Requirements for Graduates. The E-Journal of Business Education & Scholarship of Teaching, 10(1), p.58.

Dunbar, K., Laing, G. and Wynder, M., 2016. A Content Analysis of Accounting Job Advertisements: Skill Requirements for Graduates. The E-Journal of Business Education & Scholarship of Teaching, 10(1), p.58.

Environmental performance software for small businesses 2016. Co2analytics.com. Retrieved 31 August 2016, from https://www.co2analytics.com/xero?gclid=Cj0KEQjw3ZS-BRD1xu3qw8uS2s4BEiQA2bcfM_hmQA67kSvQL-Uv-a3VCEIWL0r-OpiLYM1qc5E0Sb4aAhiv8P8HAQ

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 Systems and Small Business,1(1-2), pp.1-20.

Lim, N. and Perrin, B., 2014. Standard Business Reporting in Australia: Past, Present, and Future. Australasian Journal of Information Systems,18(3).

Smith, H., 2015. Xero for dummies. John Wiley & Sons.