THE XERO ACCOUNTING SOFTWARE IN THE COMMONWEALTH BANK OF AUSTRALIA

Document Type:Thesis

Subject Area:Accounting

Document 1

Additionally, whether the strategic short term and long term goals of the company are to merge, effect an acquisition, or develop a new product line, it is important to seek professional and technical input in regard to the sourcing of a suitable accounting software package for your company (Jadhav & Sonar 2009). The suitability of accounting software is particularly a serious concern in Australia especially in a country where more than 70% of all entrepreneurial ventures either require or are currently using certain types of accounting tools, whether manual or electronic (Mageto 2017). In this regard, many Australian commercial banks are in the forefront of promoting the use of accounting software tools by small and medium enterprises (SMEs) in a bid to encourage efficient and modernized accounting in business operations. At the forefront of this campaign is the commonwealth bank of Australia. In the recent past, the Australian commonwealth bank has partnered with the Xero accounting Software Company in trying to encourage the uptake of the Xero accounting packages by most of the SMEs in Australia. As an incentive, the commonwealth bank partnered with the accounting software provider in institutionalizing Xero packages in its banking operations particularly in the areas of collecting, storing, and processing of banking transactions ensuring that the baking operations are more efficient, fast, secure, accountable, transparent, an cost effective. Evidently, the adoption of the Xero software by the Commonwealth Bank of Australia (CBA) has arguably proved to have enhanced the quality of banking services offered in the bank. For instance, reports indicate that there is now a seamless integration of the bank’s accounting operations with that of the Xero software thereby enabling faster real-time time payments of accounts as well as expenses flowing directly into the books of accounts in the bank, thereby improving overall accounting efficiency in the commercial bank compared to other banks (Yigitbasioglu 2015).

Sign up to view the full document!

The CBA is a vertically integrated organization where product development and service delivery have been aligned to customer segments. The bank has structured its operations several segments including global finance, wealth and premium business segment, retail banking, financial and risk management, strategic advancement, technology and legal services. Consequently, the segregation causes specific departments to be committed to a single functionality like accounting or customer service. Although the approach increases efficiency in specific departments and job specialization, communication and coordination becomes a concern and it becomes difficult to reconcile accounting thereby failing to detect errors of omission or commission in accounting in good time. The expanding market for accounting software packages has greatly enhanced its competition in the Australian market, especially in regard to SMEs, which account for the biggest users of accounting software packages in the country.

Sign up to view the full document!

Subsequently, some of the accounting software providers that have continuously expanded their footprint include Xero, MYOB Essentials, Reckon One, and Intuit QuickBooks, a majority of whom are revolutionizing the use of cloud computing as exposed to the previous conventional way of using physical servers and databases, which comparatively slow, insecure, and unreliable (Mageto 2017). The five accounting software providers have garnered a significant chunk of SMEs accounting needs since they use cloud computing and have competitive pricing and flexible usability, features that conveniently fit the business demand of SMEs. The Xero accounting software package use of cloud computing enables its users to keep track of all accounting information in real time and in any location. Thus, given the dynamism of most businesses in Australia, Xero offers one of the best solutions in accounting.

Sign up to view the full document!

For instance, its ability to integrate accounting and payroll into a single interface is valuable to many businesses including the commonwealth bank of Australia. Secondly, all banking transactions of a business are automatically, reliably, and securely transmitted to the Xero account. Thirdly, the process of backing up of all accounting records is done automatically and stored in the clouds, solving one of the biggest problems of data storage and restoration especially during disasters and cyber-attacks. Two years later, Intuit developed the Quicken tool that incorporated improved accounting applications with the use of a favorable and reliable user interface. In 1993, Teleware Software Company introduced effective accounting tools that caught the attention of other accounting software providers including Best Software (GA Accounting 2012). Use of Xero Accounting Software in Australia. In collaboration with Xero accounting software provider, the CBA introduced a highly secure data feed feature to its customers.

Sign up to view the full document!

As a result, customers are able to establish hyper secure data feeds between the Xero accounting tool and the bank enabling frequent and reliable reconciliation of daily business transactions thereby saving time and resources. Another feature that makes the Xero accounting tool favorable to most Australian businesses and Commonwealth bank in particular is its use of a framework of a software as a service (Saas). The features allows the software package to provide a free API enabling third party outsourcing as well as its users are able to add other applications on the package using a merged lodger in the cloud (Mondres 2017). For instance, the SaaS platform enables users to have multiple operating systems and applications which rely on a cloud computing by use of simple interfaces like web browsers. The use of cloud computing has eased information technology’s infrastructural requirements thereby enhancing cost effectiveness, innovations, and reliability in businesses.

Sign up to view the full document!

Despite the gains brought by the adoption of the Xero accounting tool in the CBA as well as other SMEs, cloud computing security has been a concern. Furthermore, the use of Google drive was native to Xero as images and other formats of accounting data could be supported and attached to records. Consequently, Saasu, which is a major competitor of Xero in Australia is currently engaging in the development of a similar platform and in the use of tags (Flaherty 2018). Recently, the commonwealth bank rolled out a features that uses data from Xero to teach SMEs approaches capable of enhancing profitability from bookkeeping. Additionally, the bank established additional integrated programs easing cloud bookkeeping workflows, thereby contributing to the expansion of the market base of the bank and the Xero service provider as the most favorable accounting tool in Australia.

Sign up to view the full document!

A competitive analysis of accounting software providers in Australia indicates that Xero emerges the best among three of its major competitors. The use of ERPs at the point of acquisition is useful in enhancing the usability and compatibility of the accounting software to the specific demands of a business. References Bailey, M. Xero Business Survey Tracks more than 500,000 Customers in Real Time. Financial Review. Available at:http://www. gaaaccounting. com/the-evolution-of-accounting-software-past-present-and-future/[Accessed 21 Apr. Hansnata, M. The impact of digital innovation on the social structure of professional public accounting practice in Australia. Heber, A. Evaluating and selecting software packages: A review.  Information and software technology, 51(3), pp. Lim, N. and Perrin, B. Standard business reporting in Australia: Past, present, and future. M. External auditors' perceptions of cloud computing adoption in Australia.  International Journal of Accounting Information Systems, 18, pp.

Sign up to view the full document!

From $10 to earn access

Only on Studyloop

Original template

Downloadable