Woolworths’s Organizational Structure

Woolworths is a leading retail company of Australia. The company operates a chain of departmental stores selling food products, drinks, clothes and home products (Woolworths Group, 2017). The company has a board of directors. Then there is a group executive committee reporting to the board of directors. This committee looks after day to day running of the business. It takes important decisions relating to the operations of the business. The company has a functional type of organizational structure. There is a managing director and chief executive. There are other heads like chief legal officer and company secretary. This person  takes care of the legal matters and has many employees under the individual. There is chief supply chain officer. Procurement of supplies is very important for a retail chain. There is chief people officer looking after the human resources function (Woolworths Group, 2017). There is chief financial officer leading a team of accounting and finance employees. There is also a chief strategy officer because the company has to work in a competitive environment and customers are to be made.

There are different functional heads and also different departments in Woolworths. There could be problems between different departments. The employees of one department have less contact with the employees of other department. There is greater specialization in the company. There could be lack of coordination among different departments. According to Hughes, Le Bon and Malshe (2012), there is need for synergy among different departments like marketing and sales to attain enterprise objectives. The efforts of marketing division also result in more sales.

The finance department has to record all the business transactions relating to sales and purchases. There could be a situation where the data from the sales department has not reached finance department . This could lead to friction between the employees of the two departments (Robbins et al., 2017).

Similarly there could be a situation where the human resource department has to pay dues of an employee and same payment has not been cleared by the finance department. The reason for friction could be that employees from one department do not know about the difficulties faced by the other department.

According to Drechsler, Natter and Leeflang (2013) the marketing department has to cooperate with production department in the development of a new product by telling customer needs which help in designing product characteristics. Different functional heads need to cooperate with one another.

Operational Problems Of Woolworths

Commercial software is any software which has been developed for sale to an end user. The example of such a software is Microsoft office. But this is sort of a basic software which would not satisfy the needs of a big company like Woolworths which would like to go for a custom software which is built by a software company specifically to meet the needs of Woolworths (Afr.com, 2017). The company is the largest retailer in Australia with revenues of millions of dollars. This means that the company is purchasing items like foods items, drinks, apparel and petrol with a bill running into millions of dollars from dozens of suppliers.

The company would like to keep track of the inventories of each item in its store and also the amount of sales happening each day and also in a span of a few hours. The company would like to have latest management information reports through the accounting software. The company would like to track the flow of business operations through the software. An ERP software automates many back office functions (Powell et al., 2013). For example the voucher details are to be fed into the software and all ledger accounts are automatically made along with the profit and loss account on a particular date. The management can know the balances of certain expenses it wants to keep track of to implement cost control. The ERP software manages to do that.

Woolworths would like a software which can do the work of an ERP software, automating its business operations including customer relationship management. The sales invoices should be made with speed and accuracy so that the customer does not have to wait. According to Daneshgar, Low and Worasinchai (2013), the factors that small and large enterprises while buying software are requirements fit, cost, scale, complexity and in house experts. The large enterprises take a long term view as they have larger market to cater to.

Woolworths is a big retail company. It purchases millions of dollars worth of goods to sell to its buyers. There goods are purchased from dozens of suppliers. There are food items and drinks brought to the distribution centres of the company in vehicles. A proper record of these goods is kept at the distribution centres where they are stored (Kimmel, Weygandt and Kieso, 2012). A distribution centre would supply to a number of Woolworths stores.  It is checked at the store whether the goods received are in accordance with the purchase order, this is part of internal controls. According to Stefaniak, Houston and Cornell (2012) external auditors rely on internal auditors for evaluating internal control deficiencies. Internal auditors are more strict when examining the internal control system. Both types of auditors should support each other.

System Acquisition Method

After the goods are received, they are placed in the store after a record of the goods received has been made in the computer which runs the accounting software. The inventory would show an increase with the quantity and value of goods received from the store (Hart, Fergus and Wilson, 2012). The goods are placed on racks in the different sections.  Any customer that comes to the store can pick the items in the store. The customer has to then go to the billing section. The employee of the store at the billing section would make an invoice with the help of the accounting software. The invoice is handed over to the customer. As the customer pays the amount given in the invoice, the individual is handed over the goods purchased. The sale of goods has been completed.

The following is the system flowchart of sales procedure:

 

There can be control problems in the system described above. If the person at the sales counter is corrupt, then the individual can misappropriate money received from the customers. The person can manipulate the accounting entries (Kimmel, Weygandt and Kieso, 2012). The amount of sales can be shown to be a lower figure and the cash can be stolen by the person making the invoices and handing over the goods to the customer. The invoice would be of a higher amount but later on the computer entries are manipulated and all the goods purchased are not shown as sales. In this case the accounting records would not show the true picture and the income of the company would be shown lesser than it actually is (Pratt and Peters, 2017). The amount of sales figure in the profit and loss account would be lower than it should be. According to Kassem and Higson (2012), it is sometimes very difficult to detect frauds. The number of transactions are many and services of specialized external auditors are needed. This is also one of the reasons why internal audit is also required to be done (Leo et al., 2016).

The time of accounting software began in 1955 with the first privately owned Univac 1 handling payroll for a General Electric appliance factory in Kentucky, USA. The companies in 1960’s invested in producing proprietory accounting systems tailored to their particular requirements. Computers continued to be more advanced. One generalized software which could be used by thousands became a reality in 1973 with the introduction of SAP RF (SAP, 2017). Peachtree Software in 1978 allowed companies to automate their accounting for a few thousand dollars.

System Flowchart Of Sales Procedure

In early 1980s Teleware Inc developed an innovative accounting software. Lotus 1-2-3 was introduced in 1983 which offered an integrated database, graphing features in a software which could be run on a small computer. In 1985 Microsoft launched their own spreadsheet for Apple Macintosh called Excel. Microsoft made excel available on personal computer along with its first version of windows in 1987. Today excel remains dominant spreadsheet. According to Selwyn, Henderson and Chao (2015), schools now generate digital data in the form of excel spreadsheets. This data is needed by government or is for the use of school authorities. This data leads to circulation of knowledge.

There have been several versions of Microsoft Office and there has been growth of other companies offering accounting software. The more popular accounting software packages are MYOB, Quickbooks, Reckon and Xero. Many of the accounting software are now run on the cloud. Now the business and its clients can securely access data anytime and anywhere on their personal computers, mobiles and tablets.

In Australia the accounting software is used by the small, medium and large scale companies. It is also used by small businesses and professional firms. The recent trend is the adoption of cloud based accounting software. The major popular software packages are MYOB, XERO and Quickbooks which are providing accounting software which allows the company professional convenience as well as specialization. There are features like integrated job and project costing functionality in MYOB. Many aspects of human resource management are taken care of by the software. All these features have made this software very popular. At present MYOB has 116000 subscribers in Australia. Xero has 320000 subscribers across Australia and New Zealand. Quickbooks in two years of existence has made 33000 customers in Australia which is a good performance.               

The leading software in the market are Xero, MYOB and Quickbooks. These software are popular because a wide range of accounting transactions can be recorded in them and the user can do a variety of tasks with them. Xero software includes online accounting, inventory and payroll (Xero, 2017). This means that accounting entries relating to inventory can be passed by an employee from the stores of the company through a device which provides online access. Similarly an employee on the move can pass an entry relating to the wages of a worker. This online access has provided lot of convenience to the user of the software. In Xero software bank reconciliation statement which shows the reasons for difference between the bank statement balance and the accounting records is automatically made.

Control Problems In The System

Quickbooks provides exceptional invoicing features where the invoice is created and also e mailed to the customer (Quickbooks, 2017). A company can track receivables and send payment reminders. Quickbooks provides the facility of online banking. Now a company does not have to go to the bank. There was a time when cheques had to be manually made by the company officials.

There are many challenges encountered by the users of accounting software. Firstly, there are several accounting software which allow online entries to be made. In this case there are security problems. The accounting data of a company can be stolen by outsiders. There is the provision of firewalls but sometimes data is stolen inspite of firewalls. There is need for better software. Secondly, in some of the accounting software it is difficult to retrieve data. Lot of commands are to be given. The software should be such that shortcut keys can be used to retrieve data. Thirdly, some accounting software are slow. Mostly there is use of mouse and not key board.

Fourthly, some accounting software are outdated. They are sometimes inaccurate. This would upset the whole system of accounting in an organization. Numerical accuracy is must in accounting. People should not use old accounting software and switch to modern, better ones. Fifthly, some accounting software are difficult to operate (smallbusiness.chron.com, 2017). The accountants need to be trained to operate them. Sometime this training is not available. The software companies should provide technical support and even training in operating their software. 

Reference

Afr.com (2017) Woolworths seeks technology edge after completing $ 100 m project galaxy. Available at: https://www.afr.com/technology/woolworths-seeks-technology-edge-after-completing-100m-project-galaxy-20150313-143i2z (Accessed: 20 April 2017).

Daneshgar, F., Low, G. and Worasinchai, L. (2013) ‘An investigation of ‘build vs. buy’decision for software acquisition by small to medium enterprises,’ Information and Software Technology, 55(10), pp.1741-1750. Available at: https://www.sciencedirect.com/science/article/pii/S0950584913000839

Drechsler, W., Natter, M. and Leeflang, P. (2013) ‘Improving marketing’s contribution to new product development’, Journal of Product Innovation Management, 30(2), pp.298-315. Available at: https://onlinelibrary.wiley.com/doi/10.1111/j.1540-5885.2012.01010.x/full

Hart, J., Fergus, C. And Wilson, C. (2012) Management accounting-principles and applications. 5^th edn. Australia: Pearson.

Hughes, D., Le Bon, J. and Malshe, A. (2012) ‘The marketing–sales interface at the interface: creating market-based capabilities through organizational synergy’, Journal of Personal Selling & Sales Management, 32(1), pp.57-72. Available at: https://www.tandfonline.com/doi/abs/10.2753/PSS0885-3134320106

Kassem, R. and Higson, A. (2012) ‘The new fraud triangle model’, Journal of Emerging Trends in Economics and Management Sciences, 3(3), pp.191-195. Available at: https://search.proquest.com/openview/572e250fe59cb248afc88bf4a8a11482/1?pq-origsite=gscholar&cbl=756337

Kimmel, P., Weygandt, J. and Kieso, D. (2012) Financial accounting. 7^th edn. Australia: Wiley.

Leo, K., Sweeting, J., Knapp, J. and Mcgowan, S. (2016) Company accounting. 10^th edn. Australia: Wiley.

Powell, D., Alfnes, E., Strandhagen, J. and Dreyer, H. (2013) ‘The concurrent application of lean production and ERP: towards an ERP-based lean implementation process, Computers in Industry, 64(3), pp.324-335. Available at: https://www.sciencedirect.com/science/article/pii/S0166361512002059

Pratt, J. and Peters, M. (2017) Financial accounting in an economic context. 10^th edn. Australia: Wiley

Quickbooks (2017) Get paid faster with easy invoicing. Available at: https://www.quickbooks.in/ (Accessed: 21 April 2017).

Robbins, S., Judge, T., Millet, B. And Boyle, M. (2017) Organizational behaviour. 7^th edn. Australia: Pearson.

SAP (2017) SAP : a 45 year history of success. Available at: https://www.sap.com/corporate/en/company/history.html (Accessed: 20 April 2016).

Selwyn, N., Henderson, M. and Chao, S. (2015) ‘Exploring the role of digital data in contemporary schools and schooling—‘200,000 lines in an Excel spreadsheet’, British Educational Research Journal, 41(5), pp.767-781. Available at: https://onlinelibrary.wiley.com/doi/10.1002/berj.3186/full

Smallbusiness.chron.com (2017) The disadvantages of using accounting software. Available at: https://smallbusiness.chron.com/disadvantages-using-accounting-software-3823.html (Accessed: 21 April 2017).

Stefaniak, C., Houston, R. and Cornell, R. (2012) ‘The effects of employer and client identification on internal and external auditors’ evaluations of internal control deficiencies’, Auditing: A Journal of Practice & Theory, 31(1), pp.39-56. Available at: https://www.aaajournals.org/doi/abs/10.2308/ajpt-10179

Woolworths Group (2017) Our brands: Woolworths food group. Available at: https://www.woolworthsgroup.com.au/page/about-us/our-brands/supermarkets/ (Accessed: 19 April 2017).

Woolworths Group (2017) Our leadership team: group executive committee. Available at: https://www.woolworthsgroup.com.au/page/about-us/our-leadership-team/management-board/ (Accessed: 20 April 2017).

Xero (2017) Track inventory and control stock in Xero. Available at: https://www.xero.com/us/features-and-tools/accounting-software/inventory/ (Accessed: 21 April 2016).