Introduction: Importance of Accounting Software
Accounting software is an important system for organizations of different sizes in various industry. The software has gained a lot of fame as it provides many benefits. Some of its advantages are reduced costs, faster accounting and mistake-free taxation. Accounting software provides a variety of helpful features and firms normally choose a solution that is easy to use and that has appealing interface. Although, quality accounting platforms are rated, choosing the appropriate one can be challenging. The context will give the background of Mazars Company in Australia which is considering to make an investment in an accounting software, its business processes, some of the possible software functionalities or features that Mazars should consider, accounting software category appropriate for the company, and the functionalities or features of accounting software packages that would suit the firm.
Mazars is an internationally independent and integrated tax, assurance and advisory company that offer meaningful services and advice to the world’s fastest developing business and leading firms. Mazars in Australia is a reliable independent company with more than 120 professional members across Melbourne and Sydney, servicing customers across New Zealand and Australia. The firm offer a detailed range of independent and professional services. Its influential team is driven to generate shared value and quality results for their clients allowing to reach their full capabilities through their integrated services standard.
Mazars in Australia provide a personalized method to their publicly listed, privately owned and public region customers. The extensiveness of their industry knowledge and experience led by open partners can assist their valued customers discover solutions to achieve their business objectives. Mazars believe they are unique because they are different (Mazars.com.au, 2018). Their entrusted method to personalized service is cannot be compared with any company. It is
Mazars in Australia delivers a personalized approach to our privately owned, publicly listed and public sector clients. The depth of our experience and industry insights led by approachable partners can help our valued clients find solutions to reach their business goals. It is a unique customer experience that one discovers upon contacting a Mazars’ partner who work around one’s business requirements. Mazars experience and expertise is reliable and can be trusted. Most importantly, it is known in the manner in which it genuinely cares about their customers. The company believes that the success of other business result to its success, thus, making an excellent long-term connection.
Accounting is the basic practice of monitoring company finances to make sure that each piece of expenditure and revenue is logged and accounted for. Usually, accounting is summarized and tracked across every quarter and end of year (Adler and Liyanarachchi, 2010 p.852). Mazars records an annual report, which highlights the accounting insights, as a way of demonstrating growth and performance. The following are key business processes of Mazars
The accounting process begins with analyzing and identifying business events and transactions. However, not all events and transactions are keyed in the accounting system. Only those concerning the entity of the business are incorporated in the process. The identified transactions are then evaluated to determine the amounts to be recorded and the accounts affected. The first process involves the preparation of source documents or business documents. A business document act as the foundation of recording a transaction.
About Mazars Company in Australia
A journal is an electronic or paper book for recording transactions. It is also referred to as Books of Original Entry. Transactions of a business are keyed in using the double-entry bookkeeping system. They are entered in journal entries comprising a minimum of two accounts, that is, one credited and one debited. To simplify the process of recording, certain journals are frequently utilized for transactions that reappear regularly such as purchases, cash disbursements, sales and cash receipts. Transactions that cannot be recorded in special books are entered using a general journal. Transactions are entered as they occur and chronological order.
The ledger is also referred to as Books of Final Entry. It is a collection of accounts that displays adjustments made to every account due to previous transactions, and their existing balances. After entering all transactions to the ledger, it is now possible to determine the balances of every account. For instance, all credits and debits in journal entries made to cash would be shifted in the ledger in the cash account. It will be possible to compute the decreases and increases in cash and as a result determine the cash ending balance.
A trial balance id developed to examine the equality of the credits and debits. All account balances are acquired from the ledger and organized into a single report. Later, all debit and credit balances are included. Total credits should be equal to total debits. When mistakes are found, rectifying entries are made to correct them or revert their impact. Nevertheless, it is important to note that the aim of a trial balance is only to examine the equality of total credits and total debits and not to evaluate the accuracy of accounting records.
Adjusting entries are developed as a system of the accrual foundation of accounting. Some costs may have been used but not captured in the journals at the end of the accounting time. In addition, some earnings may have been acquired but not recorded in books. Accounts are updated using adjusting entries before they are compiled in the financial statements. Adjusting entries are prepared for accrual costs, prepayments (expense method or asset method), allowances, accrual of income, deferrals (liability method or income method) and depreciation.
After preparing adjusting entries, an adjusted trial balance is made. It is used to examine if the credits are equal to debits.
After updating account and testing equality between credits and debits, the financial statements are prepared. They are the final result of an accounting system. A complete financial statement set is comprised of: statement of equity changes, statement of cash flows, statement of detailed income, statement of balance sheet or financial position and financial statement notes (Bar-Yosef, 2018).
The system is prepared for the coming accounting period by closing nominal or temporary accounts. Nominal accounts consist of expense, income, and withdrawal accounts. They are evaluated systematically. It is important to note that closing entries are prepared only for temporary accounts. Permanent or real accounts such as balance sheet accounts are not closed.
Business Processes of Mazars
After closing entries are prepared, post-closing trial balance is made to examine the equality of credits and debits. The post-closing trial balance comprises of permanent accounts only.
Reversing entries are not mandatory. They are made at the start of the new period of accounting to facilitate a more consistent and smoother recording process. The adjusting entries prepared for accrual of costs, prepayments under the expense approach, accrual of income, and deferrals under the income approach are reversed.
Mazars seeks to achieve the following functions with the accounting software:
Analysis and reporting- the software must be able to analyze the financial data and generate a comprehensive report that can be interpreted and used to make informed decisions. Analysis and reporting capabilities help businesses to adhere to industry and government regulations besides helping the business to get knowledge of vital accounting activities (Lewis, 2014). The software should ensure accuracy in financial records and timely reporting.
Automation- the company needs an accounting software that will have the abilities to automate company expenses, departmental and company budgeting, complex financial transactions, time sheets, purchase requisitions, and employee payrolls in addition to support for financial management and accounting transactions.
Graphical representation- financial records are number-based and looking at numbers does not give a visual picture. As such, the software should be able to represent such number in charts and graphs which can be used to show business trends in a format that numbers alone cannot display (Vaní?ek, 2012, p. 181).
Automatic Updates- the software should be able to updates automatically because outdate software is vulnerable to threats and risks (Ali and Lai, 2015, p. 206). Regulations regarding financial functions and tax laws are changed over time therefore, the need to receive automatic updates that are user-transparent.
Customization- the accounting software should allow the company customize it to meet its internal requirements since there is a high chance that a software ill address the needs of the company exactly.
Internet connectivity- because of the growing need of interconnectivity and telecommuting, the accounting software should support electronic funds transfer and allow the business to receive and send electronic documents.
Interoperability- the accounting software should allow the use of its data in other business applications. Consequently, the software should be able to use data and information extracted from other application packages.
Scalability and expandability- because the company is expectant of growth in the coming years, thus there is need to acquire an accounting software that can be upgraded easily to accommodate the changing business set up and increasing number of transactions (Knapp, 2013, p. 197). Additionally, it should allow for addition of more modules.
Security- data security is very vital in any accounting software since the business existence depends on it. Data loss may the company will lose money, time, sensitive business data, and in extreme cases the company may shutdown (Bragg, 2013). Therefore, the accounting package should support security features such as frequent backup, disaster recover, and the ability to mesh with the existing company on-site safeguards like network firewalls and antiviruses.
Steps in the Accounting Process
Software selection is a very critical process and requires in-depth research of the available software packages that will be able to meet the business requirements that have been set out. Mazars requires a software that will be able to handle its daily operations such as cash accounting, inventory management, accrues, book keeping, and receipt tacking, payroll accounting, fixed expenses, cash on hand and cash flows, temporary credit lines, and account reconciliation (Romney. et al., 2012). The software selected should be able to meet all these requirements and be flexible enough to meet any other functionalities as need arises. This section will discuss four accountings software packages that have the ability to address Mazars’ business requirements. They include SAP, SAGE, Microsoft Dynamics GP, and QuickBooks.
This is one of the widely used application software across the world having over 170,000 clients (Zimmerman, 2017). SAP has the ability to meet both small and medium business needs and large enterprise accounts (SAP, 2018). Moreover, the limited acquisition and grown organically are some of the factors that has kept SAP more competitive. Apart from offering accounting options through finance management module, SAP provides other crucial services such as human resource management, customer relationship management, supply chain management, and management of product life cycle (Divya et al., 2018, p. 22).
SAP accounting software package facilitates businesses in recording transactions, analyzing financial data, and generating daily, weekly, monthly, or on-demand reports. SAP accounting modules include reporting, accounting, and management of accounts receivable among others. Its quite a difficult and challenging task to manually keep records of financial transaction and tax record manually through receipts and cashbooks. SAP has factored in all the processes relating to accounting processes and thus the efforts can be channeled to other productive activities (Speck et al., 2015, p. 25). The software also enables the customers to connect with the system and make orders via it make it processing of such orders faster and human errors are eradicated.
One of the key feaures of SAP accounting software is its user-friendly interface which makes it easy to learn and use (Maagaard Pedersen, 2012). Initially, a representative from SAP or vendor will install the software and customize it to meet the business requirements and carry out training of employees on how to use the software. Regular updates of the software are needed to get security updates and higher versions of the application. Additionally, the IT infrastructure in place should be able to handle software and data requirements and should be upgraded and maintained regularly (Hall, 2012).
The ultimate goal of the software is to allow the business to be more flexible, efficient, and responsive to the external and internal requirements of their customers. Furthermore, it can be customized uniquely to suit the needs of the business through SAP Ecosystem (Fulmer, 2010, p. 1341). Furthermore, as part of its business objects product line SAP enterprise application provides business analytics applications. The company is striving to upgrade and improve the performance of their existing application, for instance, SAP HANA allows businesses to execute queries on several sources of data simultaneously (Jorgensen, 2016, p. 49).
What to Consider in Choosing Accounting Software
Microsoft dynamics GP is another accounting software that is flexible and has a unique feature od ‘copy and paste’ making it easier to copy any excel workbook into the journal entries (Brundson et al., 2010, p. 350). Integration process is easy like selecting a group of cells that contains account, credit, debit, and description for each journal entry line item. In addition, smartlist feature available in this package which allows the users to use the user-friendly interface to create queries (Corporation, 2018). The results of the queries are returned in tabular format making it easier to interpret the information.
This software is a type of integrated ERP application solution that enables SMEs to integrate their resources and data across the various locations and departments (Klamm and Segovia, 2014, p. 172). The business has the option to either deploy this software in the cloud or on-premise. Some of the major features include operations and inventory management, accounting and financial management, business intelligence among other features (Watson et al., 2016, p. 78). Additionally, it provides payroll capabilities and human resource management to facilitate the business to pay, hire, and train workers with the assistance of worker profiling and assessment tools. Moreover, users can spot trends, generate on-demand custom financial reports, and make informed decisions using reporting engine and business intelligence.
The users of the software package are offered services related to field service management, development and configurations, and supply chain management (Scherer, 2017, p. 13). In addition to this, 24/7 customer support is provided via email, phone, and live chat online. However, the software takes a bit longer to launch and generation of trial balances using this application takes a longer time but this depends on data selection.
This is a user-friendly accounting application software designed to run ion desktop environment and to be used by accounting firms and companies that require use of accounting software (Sage, 2018). It is a scalable application and can handle transactions of big businesses. Some of the key functions of this software include bill payments, account payable and receivables, and management of cash flows (Smidt et al., 2018). This software can be used by up to forty users and has a high processing speed. Module-level security and inventory management are some of the advanced features supported by the software. The solution offers the business the option to add credit card processing and payroll capabilities if needed to handle finances and salaries.
Sage50 have developed mobile applications that can be supported by all mobile environments such as Android, iOS, and blackberry and smoothly integrates with productivity tools like Microsoft outlook, excel, exchange, word and other third-party applications endorsed by Sage (Yacht, 2016). The solution is flexible and easy-to-use for both non-accountants and CPAs. Has automatic backup feature that is critical to any business to protect financial records from getting destroyed or can be restored in case of tragedy (Kelly, 2016). Sage allows customers to pay for bills online and monitors cashflows.
Every business is unique ad different even if they offer similar services or products. As such, when one wants to choose a particular software it is necessary to conduct a review on the possible solutions and check the ratings that the customers have given (Mazza and Chavez, 2014). Software quality is not about finding the perfect services but looking for the solution to the business requirements. Medium-size accounting software is suitable for Mazars because it’s a medium sized accounting and consultancy. Having high-end software will be costly to the company and many of the features would not be useful. Medium solution is recommended since the business is growing and therefore its business requirements will still be met even if it continues to grow over time (Zimmerman, 2017). Some of the factors that need to be considered when selecting an accounting software include cost, customer satisfaction, number of users supported, accounting features supported, and future value.
Recommended Accounting Software for Mazars
Comparison between SAGE50 and SAP Business One
|
Designed for small and medium size enterprises |
Leading industry ERP designed to handle all business operations which cannot be handled by SAGE 50. Designed for large enterprises but still can be used by SMEs (Fulmer, 2010, p. 1341). |
|
The target market is SMEs with basic accenting needs and small budget with 1 to 50 employees (Sage, 2018). |
Target market is business with 5 to 1000 employees and requires business and accounting management services. |
|
Maximum of 50 users |
No limit to the number of users. |
|
The basic feature for SAGE 50 is accounting |
Has more features including CRM and sales, financials and accounting, operations and purchasing, distribution and inventory, and real-time reporting. |
|
Supports only one exchange rate per currency and therefore it cannot change foreign creditors’ and debtors’ value (Smidt et al., 2018). |
The values of foreign debtors and creditors can be revalued and exchange rates can be supported for a particular period. |
|
Lack stock location control |
Support multiple location of stores and has the capacity to limit which stores holds what stock products. |
|
It is not possible to assign users specific roles |
Has the ability to grant different users’ specific privileges to ensure confidentiality of business sensitive data. |
|
The customer relationship management module is able to set reminders and track calls (Kelly, 2016). |
The integrated CRM is able to manage campaigns, track activities, service contracts among other aspects. |
|
Ha now workflow functions |
The capability to customize work-space aids in streamlining the workflows to meet the requirements of every user (Speck et al., 2015, p. 28). Has the ability to reassign tasks to other users. |
|
The plugins available for custom reports are excel and sage report writer. |
Has in-built custom queries and crystal reports for creating and publishing charts, KPIs and dashboards, and reports. can be easily integrated with Microsoft office package (SAP, 2018). |
Based on the above comparison, I recommend SAP Business One application software because it has the capability not only to manage accounting and financial records but offer other crucial services of HRM and CRM (Divya et al., 2018, p. 25). Additionally, it will be able to handle the growing business requirements as the company grows over time. SAP business one offer business solutions not only for the complex businesses with custom generations but also for small and medium sized enterprises (SAP, 2018). The initial cost may be daunting but the return on investment is guaranteed. Mazars will be able to integrate all the business functions into one streamlined solution that is flexible and scalable, as such, even as the business grows continuity is assured. The ability to grant role-specific functions to different users make it an ideal solution for Mazars because of the different levels of financial management (Speck et al., 2015, p. 27). Finally, the continuous support offered by SAP representative or vendors ensures continuous availability of services offered by the software package.
Conclusion
There are many accounting software products in the current market that have solid capabilities, are budget-friendly, are rich in features and are structured for the needs of all kinds of businesses. Most accounting software are hosted online and are used paying monthly subscriptions. The advantages of such accounting software is that they allow one to use and access the platform from any device connected to the internet. Besides, one does not need to update, install or maintain anything.
Basically, the best accounting software is one which meets and matches the business requirements of a firm. Most accounting software vendors provide free trials, permitting one to examine the software first hand. Although most of these solutions have same accounting features such as budget and forecasting, tax management, invoicing and billing, inventory and fixed assets and others, it is also essential to examine the usability, integration with other applications, analysis capability, responsiveness, automation, and scalability.
The accounting solution should be able to meet the above examples to improve productivity and efficiency of the firm accounting team. Conclusively, accounting software should assist the firm realize savings from more solid accounting operations. Although tax management is one sector that an excellent accounting solution can ably manage, all its other functionalities and components are developed to work jointly to drive the business forward.
Reference List
Adler, R. and Liyanarachchi, G. (2010). An empirical examination of the editorial review processes of accounting journals. Accounting & Finance, 51(4), pp.837-867.
Ali, N. and Lai, R. (2015). A method of software requirements specification and validation for global software development. Requirements Engineering, 22(2), pp.191-214.
Bar-Yosef, S. (2018). Mandatory Financial Reporting Processes and Outcomes: A Discussion. The International Journal of Accounting.
Bragg, S. (2013). Accounting best practices. Hoboken, N.J.: John Wiley & Sons.
Brundson, T., Romney, M., Steinbart, P. and Diaz, M. (2010). Introduction to Microsoft Dynamics GP 10.0: Focus on Internal Controls. Issues in Accounting Education, 25(2), pp.350-351.
Corporation, M. (2018). Microsoft Dynamics GP Overview | Microsoft Dynamics. [online] Dynamics.microsoft.com. Available at: https://dynamics.microsoft.com/en-us/gp-overview/ [Accessed 19 Sep. 2018].
Divya, M., Gayathri, M., Sangeetha, K. and Anguraj, S. (2018). SAP HANA-Database: Inter Organisation Cooperations with SAP Systems Perspectives on Data Management for Business Applications. Bonfring International Journal of Networking Technologies and Applications, 5(2), pp.21-25.
Fulmer, T. (2010). Sopping up SAP. Science-Business eXchange, 3(45), pp.1341-1341.
Hall, J. (2012). Accounting information systems. Mason, Ohio: South-Western.
Jorgensen, M. (2016). Better Selection of Software Providers through Trialsourcing. IEEE Software, 33(5), pp.48-53.
Kelly, J. (2016). Sage 50 Accounts For Dummies. Newark: Wiley.
Klamm, B. and Segovia, J. (2014). Creating financial statements using FRx within Microsoft Dynamics GP: Learning vs. teaching. Journal of Accounting Education, 32(2), pp.171-184.
Knapp, J. (2013). A Reconsideration of Consolidation Accounting Requirements and Pre-acquisition Dividends. Australian Accounting Review, 23(3), pp.190-207.
Lewis, J. (2014). The Book You Need Before You Buy That Accounting Software. Cork: BookBaby.
Maagaard Pedersen, P. (2012). Introduction to SAP Business One. A?rhus: Aarhus University, Business and Social Sciences.
Mazars.com.au. (2018). Mazars – Australia. [online] Available at: https://www.mazars.com.au/ [Accessed 19 Sep. 2018].
Mazza, J. and Chavez, G. (2014). Computerized accounting with Sage 50 2013. St. Paul, MN: Paradigm.
Romney., Al, M., Mula, J., McNamara, R. and Tonkin, T. (2012). Accounting Information Systems Australasian Edition. Sydney: P. Ed Australia.
Sage, S. (2018). Sage 50cloud Accounting| Sage US. [online] Sage.com. Available at: https://www.sage.com/en-us/products/sage-50-accounting/ [Accessed 19 Sep. 2018].
SAP. (2018). SAP Software & Solutions | Technology & Business Applications | SAP Australia & New Zealand. [online] Available at: https://www.sap.com/australia/index.html [Accessed 19 Sep. 2018].
Scherer, M. (2017). Management of reverse logistics processes with MICROSOFT DYNAMICS NAV. Production Engineering Archives, 15, pp.11-14.
Smidt, L., Ahmi, A., Steenkamp, L., van der Nest, D. and Lubbe, D. (2018). A Maturity-level Assessment of Generalised Audit Software: Internal Audit Functions in Australia. Australian Accounting Review.
Speck, R., Selke, S., Auras, R. and Fitzsimmons, J. (2015). Life Cycle Assessment Software: Selection Can Impact Results. Journal of Industrial Ecology, 20(1), pp.18-28.
Vaní?ek, J. (2012). Software quality requirements. Agricultural Economics (Zem?d?lská ekonomika), 52(No. 4), pp.177-185.
Watson, M., Klamm, B., Segovia, J. and Lehman, M. (2016). Enterprise system case using Microsoft Dynamics GP via DynamicsCloud. Journal of Accounting Education, 37, pp.67-92.
Yacht, C. (2016). Computer accounting with sage 50 2016 + student software cd-rom. [Place of publication not identified]: Mcgraw-Hill Education.
Zimmerman, J. (2017). Accounting for decision making and control. New York: McGraw-Hill Education.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
