Question:
The research would cover history, development and adoption, the current market size, identify the leaders in the market and what gives them the competitive advantage. Its required to identify the current gaps or challenges encountered by users or customers of accounting software/packages and make relevant suggestions or recommendations.
Answer:
History and Development:
Even a decade ago, the demand and use of cloud based accounting software was negligible in Australia. Dependence on traditional way of accounting was quite high among business firms. Manual accounting entries with the use of pen and paper was a common scenario in Australia during the 1980s. However, introduction of several accounting software and spreadsheets had changed the system of accounting function in the country during 1990s. However, Brender and Markov (2013) mentioned that the major limitation of conventional accounting software is that the same cannot be connected to the internet and is also subject to installation on the computer system. Introduction of cloud based accounting software in Australia during late 1990’s like Xero, Quick books and others has brought about an evolution in the accounting functions of the business firms. The cloud based software are easy to use, internet based and integrated in nature. These have contributed to the growing popularity of accounting software packages in the country.
In the view of Christauskas and Miseviciene (2012), cloud based accounting software packages has become more than a simple accounting package to a business management tool. The main challenge faced by the business enterprises during the 1990’s was lack of integration as the different elements of accounting functions were not able to interact with each other. Even, there was lack of coordination among sales, purchase and inventory management. On the other hand, with the increased complexities in regulations, even non-accounting disciplines felt the necessity to evolve beyond simple excel sheets. This led to the creation of specialized modules like taxation, compliance functions, secretarial functions and payroll. However, these functions were required to be integrated with the back office functions. The concept of cloud accounting is not a new concept in Australia however there was a lack of implementation of cloud based accounting software even five years back. This was mainly due to the problems faced by traditional accountants in using cloud based accounting software. However, situation have changed in Australia at present with the demand for cloud based accounting software getting wide popularity among business firms in
Services and Features:
The limitations of the traditional accounting system is overcome by the accounting software packages available in the market. MYOB, Xero, Quick books, Fresh books and Zoho books are some of the leading names in this regard. Here, it is important to note that due to immense market competition, the features and services offered by the current accounting software are almost similar. In this context, Cleary and Quinn (2016) mentioned that automation and integration of accounting functions are the two key benefits offered by accounting software packages. These two benefits further increase the competitive edge of the firms over the rivals. The most popular features of accounting software packages are easy invoicing, fast bank reconciliation, accessibility through mobile based apps, faster inventory management, smart reports & dashboards, integrated payroll, expenses claiming and online bill payment. In addition, these accounting software also allow multi-currency transactions, online storing of files at one place, generating purchase orders & sales orders, filling of GST returns, creating business performance dashboards and fixed assets accounting. Here, it is important to note that these accounting software packages are mostly cloud based software which further allows multiple access to accounting information.
Market demand:
The demand for any product is determined by the users of the product in the market. In this context, Marand et al. (2013) mentioned that market demand for cloud based accounting software has been increasing rapidly in Australia among both SMEs and large scale organizations. The increasing demand for the cloud based accounting software can be attributed to the automation facilities offered by such software. On the other hand, Özdemir and Elitaş (2015) stated that cloud based accounting software are not required to be installed on computers and can be used from any device having internet connection. These features of cloud based accounting software is also contributing to the rising demand for the software in the market. On the other hand, it is seen that the accounting software package market in Australia is dominated by software like Xero, Zoho books, Quick books and MYOB. There is a stiff competition among these software as almost similar features are offered by these software package. The competition is mainly based on price. This requires companies to select a software package based on own scale of operations, business nature and banking requirements. However, the popularity of accounting software packages seems to be more in case of small and medium scale organizations compared to large organizations. Large scale organizations like Coles, Woolworths and others prefer to perform accounting functions in the conventional way backed by advanced technologies. The future demand of accounting software is also expected to rise in Australia because of increasing GDP and rising number of small & medium scale firms in the industry.