Accounting Assignment On MYOB Software
Task:By reviewing the case study of First National Real Estate on the MYOB website (https://www.myob.com/au/enterprise/case-studies/first-national), you are required to write a report addressing the following tasks
- Outline the specific functions provided by MYOB software.
- Discuss the problems of using a manual accounting system.
- Outline the benefits of using an online accounting software tool
- Discuss three (3) specific economic transactions that would take place at First National Real Estate, detail how MYOB would be used and useful.
- Discuss any limitations or risks that First National Real Estate may face in the implementation of MYOB.
Functions provided by an MYOB software
In this section of the accounting assignment the functions provided by an MYOB software package are given. MYOB is an Australian business organisation that is a providing software services in the field of taxation accounting and other supporting business activities. This organisation was established in 1981 and has been a prominent software service provider in Australia. Following are some of the services divided by this organisation to its customers- Tax Services- Management of MYOB has been providing software for dealing with the taxation related issues for business organisations. Management of the organisation can easily prepare their tax returns and calculate accurate tax payable to government with the help of these software (MYOB, 2019).
Accounting services- One of the most popular service provided by this organisation is related to software developed for accounting of different business organisations. Pre-packaged services are delivered to customers and additional services are provided if a business organisation want to alter pre-packaged software in accordance to their needs and requirements.
Other services- Accounting software are also developed by the organisation for business support services such as HR management, payroll management, customer relationship management, supply chain management, etc.
This organisation is equipped for providing services to small medium and large scale organisation (MYOB, 2019). Some of the most popular products developed by this organisation are MYOB essential, MYOB Accountedge, MYOB Advanced, MYOB Payby etc.
Problems of using manual accounting system
Some of the most common problems of manual accounting discussed in this accounting assignment are as follows-
Time consuming- Process of manual accounting can be very time consuming and it also involves using significant amount of human resources. This time and employed by the organisation for more productive business activity.
Security concerns- In manual accounting systems all the documents are available in physical form and it is very difficult for management to implement 24/7 security measures on such documents (Nikitenko and Pogribna, 2015). Loss of these documents will require additional time and efforts for redevelopment.
Chances of errors and omissions- Probability of errors and omission in manual system is significantly higher as compared to accounting software. Error and omission in manual system is highly dependent on the skill, knowledge and experience of the accountant that is preparing the books of accounts (Arcega et.al, 2015).
Space required for storage- According to rules and regulations of Corporation Act 2001 every business organisation is required to maintain books of accounts for a minimum period of 7 years. Therefore in case of manual accounting system management would be required to maintain books of accounts for 7 year which will significant space in office or manufacturing unit.
Advantages of online accounting software tools
Some advantages of adopting the online accounting software as discussed in this accounting assignment are as follows.
Simple data entry- Management of the company can easily prepare books of accounts and financial reports at the end of financial year by simply entering a data entry in the system. In addition to that errors and omission can easily be identified with the help of accounting software.
Reduction of errors- As calculations are not done by accountant manually, therefore the chances of errors and omissions in case of accounting software will decrease significantly. Incomplete or incorrect entries can be identified by accounting software on the spot and corrected by the accountant (Arcega et.al, 2015).
Fast process- Total time consumed in preparation of financial accounts with the help of software will be significantly lower as compared to manual systems. Financial statement to such as balance sheet, trial balance, profit and loss account, cash flow statement will be prepared automatically with the help of accounting software. Total time saved through accounting software can be used for more productive business activities.
Integration with other system- Accounting software also helps in integration with other systems which is a huge beneficial factor for a business organisation. For example management of the company can integrate accounting software with e-filing Systems established by government (Nikitenko and Pogribna, 2015). This will help in filing different kind of tax returns automatically with one click only.
Three economic transactions at First National Real Estate
Economic transaction can be defined as the transaction in which there is an exchange of goods or services in return of money.
Expenses book to by Realtors: It is general practice in business organisation to reimburse the expenses shown by Realtors through bills and vouchers (MYOB, 2019). These expenses are not generally provided by Realtors on a daily basis and there is a high probability that these Realtors will lose their receipt or bill. In addition booking expense for each and every realtor manually can be very tedious task and there is a probability of error or omission. With the help of MYOB software realtors can book the expenses with the help of application provided by business organisations directly into the system.
Commission made to realtors: Commission is required to be made at every sale of house by business organisation to their realtors. This business activity is undertaken by the organisation on daily basis. With the help of MYOB software, management of the company can instruct software to credit the amount of Commission on the basis of transaction entry entered into the system.
Payment to be received from customers: Management is required to collect payment with respect to household by their Realtors on a regular basis. For this purpose management is required to prepare a voucher or a bill that will be charged to the customer (MYOB, 2019). MYOB software can automatically generate the bill and send it to client's email address on the time and date specified by the management.
Probable risk in the implementation of MYOB
One of the risk which may happen while using MYOB software is described in this accounting assignment as follows.Design of IT infrastructure- If there is any kind of error in coding process then mistake in books of accounts and financial accounts will continue for a long period of time.
Regulatory requirements- Regulatory requirement for different kind of business organisation might be very different, therefore it is essential that management of the company should alter the pre-package software in accordance with regulatory requirements.
Security concern- It is essential that proper internal controls has been implemented by organisation on accounting system. In absence of internal control there is a high probability that system will be exposed to unauthorised access (Simkin, Norman and Rose, 2014).
Over dependence on technology- This will also create over dependence on technology that can be very harmful in case there is any kind of malfunction in accounting software.
Arcega, C.K., Datinguinoo, E., Guerra, J., Guno, C., Mayuga, H.J., Villamena, E. and Manongsong, J.L., 2015. Computerized vs. Non-computerized Accounting System of Small and Medium Enterprises in Lipa City, Philipines: A Comparative Analysis. Asia Pacific Journal of Academic Research in Business Administration, 1(1).
MYOB. 2019. A first-rate time-saver for First National. Retrievable at: https://www.myob.com/au/enterprise/case-studies/first-national
MYOB. 2019. MYOB Business software that actually lets you run a business. Retrievable at: https://www.myob.com/au
Nikitenko, O. and Pogribna, A., 2015. Advantages and disadvantages of a computerized accounting system for small businesses.
Simkin, M.G., Norman, C.S. and Rose, J.M., 2014. Core concepts of accounting information systems. John Wiley & Sons.