Online Accounting Software for Implementation of MYOB

Question: Discuss about theOnline Accounting Software for Implementation of MYOB. Answer: Introduction John and Jane are engaged in the electrical business since last 8 years. They are running the business in the name of John and Jane Electrical Company. The business is being conducted at the small level and hence the business managers are following the manual system of accounting. All the accounting related operations were performed manually by the management. The major accounting functions were ranging from the maintenance of track records of all the financial data relating to inventory, payrolls, accounts payables and receivables, taxation function etc. The management persons were writing the ledgers of accounting transactions on their own. As the manual system of accounting system is followed there involves a heavy paper work requiring ample of time and efforts to manage and retain all the important data records on paper. Further, it is difficult for the owners to deal with each and every business complexity as it demands requisite accounting knowledge and expertise. Moreover, the manual system of accounting of John and Janes electrical company is facing severe inefficiencies as a result of manual intervention causing high errors and mistakes in carrying out accounting operations. With the increased level of demand for electrical supplies and the decision of opening up few more stores at alternative location, the owners of the electrical company have realised the importance of automated accounting systems. As the business is conducted at a small level an appropriate accounting software is required to be selected. MYOB is one of the leading accounting and other business management solutions providing software meant for small to middle sized firms. The implementation of such software will enable the business managers to focus on their core business functions as the non-core functions like accounting and related activities will conveniently be handled by using the features of MYOB in real time. The concentration on demand and sales management will contribute to higher revenue generation of the electrical company. Moreover, the implementation of such software will also prevent the inefficiencies of the accounting system as the chances of errors on part of humans w ill be minimised. The documentation requirement of the critical accounting and financial data of company will also be reduced as the data will be kept saved and backed up on online platform. Economic transactions at small business levels Purchase and Sales transactions For businesses at every level whether small, medium or large, purchases and sales are the most basic functions. To run any business the entrepreneurs requires the requisition of raw materials and the other necessary assets for the business. Hence, purchase transactions occurs most commonly in every business organisation. Further, business exists to deliver some outputs in the market. Therefore sales forms the necessary part of it. The purchase and the sales transaction are those economic transaction in every business which occurs regularly. These transactions are thus required to be properly accounted for (Halabi, Barrett Dyt, 2010). Payroll function transactions: Human resources plays the vital role in the business success. The wages and salaries paid to each and every personnel involved in the business and hence payroll transactions are also commonly identified economic transactions. Tax payment transactions Even the small businesses exists to earn some profits and hence it has to pay off a certain portion of its earnings to the tax regulators of the economy. Tax related transactions occurs when taxes are paid to the fiscal bodies. Tax accounting is done to determine the amount of taxes to be paid to the government. Revenue Expenses transactions: In order to operate a business the owners have to spend certain amounts of money to meet out its daily requirements like payment of utilities rent payments and it also earns incomes from various sources hence transactions relating to payments of expenses and receipt of certain incomes can occur frequently in any small business. Investment relating transactions: Even small businesses saves a certain portion of their earnings from the operations and hence invests their saving in some income generating sources and therefore investments can be also be the part of economic transactions. Banking transactions: A business at small level needs to raise funds from banks and other finance providers therefore loan transactions are common part of small business economic transactions. Benefits of using an online accounting software tool Speedy accounting processes: As online accounting programs are based on automated functioning, the accounting operations are handled with speed using online software. As machines works more quickly than the manual systems the processing of accounting data occurs in the minimum possible time (Sam, 2012). Safety and Security: The information any business plays vital role in its success. As book keeping function in any organisation is the basic aspect of business management. Accounting software provides the safety and back up features to safeguard the critical information of the business. The information kept on online mode can be prevented from the risk of data damage (Pulakanam Suraweera, 2010). Efficiency: The accounting operation requires significant portion owners time and efforts, accounting software helps the business in managing the accounting functions with more accuracy and proper management of accounting data. As data processed electronically is less subjected to the arithmetic or logical errors (Salehi, Rostami Mogadam, 2010). Cost: In small businesses it is difficult for the managers to hire an expert person to handle its accounting operations for every year as they have low budgets, investing in the accounting software helps the firm to receive its benefits for a long time with one time investment. Accounting software are designed and developed in such ways that the owners of the business would not need to hire an expert to handle its accounting functions (Everaert, Sarens Rommel, 2010). Easy user interface: Online accounting software are developed and designed for the people who do not possess requisite knowledge about the accounting functions. These software possess the basic accounting features that are vital for every small or medium business and are easy to understand and use with proper technical support. Problems faced by Jane and John in manual accounting system Inadequate accounting knowledge: It may not be possible for the owners of electrical company to possess all the requisite skills and knowledge to handle accounting operations and to keep themselves updated with all the accounting related regulatory changes. Also, the managers might be finding it difficult to manage all the business operations simultaneously. Human errors: while working with manual system it is not possible for the owners of the business to avoid each and every error on arithmetic or logical grounds as they lack expertise in accounting functions. Owners are not the machines which can provide the accuracy in every function it perform. Heavy Paper Work: In manual accounting the accounts are majorly handled on the papers and hence require proper documentation of all the paper. Also, the hard copy of records is vulnerable to risk of loss due to various disasters. Time consuming: Accounting involves series of operations to be carried out to record a data for the purpose of financial reporting. There are large number of sales transactions that takes place in the business of John and Jane therefore it takes enormous amount of time to record all the transactions. Cumbersome accounting processes: The accounting processes can be complex enough at times and hence difficult to be handled by single or two persons. Use of MYOB features in John and Janes business Invoicing feature: MYOB is designed for the small and medium sized businesses and provides the key feature of invoicing of bills to the customers to whom the sales are made by the firm. As MYOB provides the feature which automatically generates the sales invoices to the customers as soon as sales data is entered in the software program it will help the electrical company to manage its sales functions properly (Curtis, 2015). Payroll management: The payroll feature will help the John and Janes business in managing the staff members of the organisation so that they can be paid off for their services on time. This feature will keep the relevant record of all the employees of business (Sutherland, 2011). Bank feeds: This feature will enable the owners of the business to stay updated with all the bank related transactions that occurs on daily basis such as the receipts and withdrawals that are made directly to the bank account of the business (Curtis, 2012). Limitations and risks involved in MYOB implementations Data Security Risks: Information kept on online platform is more prone to cyber-crimes like hacking and data leakage. The data that is processed by the accounting software may be quite sensitive for the business thus will make the business suffer severe repercussions if it is leaked out. The information loss can affect the companys performance adversely and it may also lead the company face serious governmental actions (Gourdie, 2011) (Wongsim Gao, 2010). Unfriendly for new users: The employees working with old system may find it difficult to cope up with new online accounting software. To work on it one must require proper knowledge about software functionalities. Enough of training needs to be given to the concerned workforce in the company and training the personnel may cost high to the company (Urqua, 2011). Conclusion: From the research about the importance of MYOB in the small businesses, it can be well concluded that the implementation of online accounting software can allow the business to reach at the next level if properly used by enabling the owners to focus on the core business activities. Whereas, the use of manual system of accounting will lead the business to face several inefficiencies in the accounting functions due to the involvement of human error element. Hence, the owners of electrical company must go for the option of using the accounting software for their business. References Curtis, V., 2012.Making the Most of MYOB AccountRight. Woodslane Press. Curtis, V., 2015.MYOB Software for Dummies-Australia. John Wiley Sons. Everaert, P., Sarens, G. and Rommel, J., 2010. Using Transaction Cost Economics to explain outsourcing of accounting.Small Business Economics,35(1), pp.93-112. Gourdie, J., 2011. MYOB as an Accounting Information System: Is it time for a 501 curriculum refocus? Halabi, A.K., Barrett, R. and Dyt, R., 2010. Understanding financial information used to assess small firm performance: An Australian qualitative study.Qualitative Research in Accounting Management,7(2), pp.163-179. Pulakanam, V. and Suraweera, T., 2010. 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