Automated Accounting Software For Five Point Four

Question :

ACC508

Informatics and Financial Applications

Assignment 1

Cloud versus Desktop Accounting Software

Background

The ability to understand and present information clearly and professionally is an important skill.

You have been employed by an Australian company as an information systems consultant, to evaluate whether that company should use desktop accounting software, or should switch to cloud computing accounting (Software as a Service, or SaaS). Their current accounting software is very old and needs replacing. Your task is to evaluate the pros and cons of cloud versus desktop software for that particular company, and make a recommendation about which approach they should take.

Choose a real Australian company (small or medium-sized) to use as an example. Do NOT choose any large or international company. Also make sure you choose a DIFFERENT company to the other students in your class. Write your report to the managers of your chosen company, making recommendations about what style of accounting software they should adopt. Your report should discuss the pros and cons of cloud versus desktop accounting software, then make a recommendation about which software they should adopt. You must take into account at least:

the size of the business;
their annual turnover;
the price of your proposed solution.

You should consider at least TWO cloud-based solutions and at least TWO desktop solutions. Here are some possible cloud-based accounting software: Xero, QuickBooks Online, Intacct, Wave, or FreshBooks.

Here are some possible desktop accounting software: QuickBooks, AccountEdge, Quicken, Sage products.

Your target audience is the CEO and management board of the company. Your assignment will be marked out of 100 marks and represent 20% of your final grade. Note that the MAJORITY of the marks are for the formatting and presentation of your report, so make sure you follow these instructions carefully.

Assignment Requirements and Deliverables

Question 1: Report75 marks

In this report you will be demonstrating your skill in academic writing and presentation skills. We will be carefully looking at your Microsoft Word skills in this report. In this report you will be reporting on financial applications (accounting systems).

This report should contain:

A title page, which should include the following:
1. The name of the course
2. The assignment number and description (that is, Assignment one)
3. Your name and student number
4. The name of the Australian company you have chosen
5. A picture illustrating your report's content
An executive summary containing a short summary of the report. This summary should be no more than 200 words.
A Table of Contents – This must be generated by word and not created manually.
A Table of Figures – This must be generated by word and not created manually.
The body of the report with the following sections.
1. Introduction. This will explain the purpose of your report and give a brief summary of the Australian company you have chosen. Please note you need to make sure that this section can be read easily as a section and should be around 150 words long.
2. Cloud versus Desktop. In this section you should briefly talk about the advantages and disadvantages of SaaS versus traditional desktop software. Apply this to your chosen company, and describe the benefits, limitations and changes that they would have to make if they adopt SaaS accounting software. You should include at least two references and use Microsoft Word capabilities to include these in the bibliography. Please include at least one figure and use cross-referencing to refer to this figure in your text. This section should be no more than 250 words long.
3. Comparison of Solutions. In this section you should compare the four (or more) accounting software solutions that you are recommending for this company. Use a table to summarise the basic details about each proposed solution, including: name, supplier (or web site), price, advantages, disadvantages. This section should be no more than 100 words long and should basically just introduce and reference your comparison table, and describe any abbreviations or notations used in that table.
4. A Conclusions section. Here you should recommend the best accounting solution (and perhaps a second-best, if they are close) for this particular company.
On each page you need to include a header showing the name of the course and the description of this assignment. Please note this section is not to show on the title page.
On each page you need to include a page footer, containing:
1. Your name – justified left
2. Your student number in the centre
3. The page number – justified right. Please note a page number should not be shown on the title page, page numbers before the body of the report should be shown in roman numerals and page numbers in the body of the report should start at 1.
The figures included in the report should be presented with captions and must be referred to in the report and should be cross-referenced.

Answer :

CHOSEN ORGANIZATION: “FIVE POINT FOUR”

Executive Summary

The aim of this report is to recommend and automated accounting software for an Australian SME, namely “Five Point Four”. Nowadays, two types of automated tools are used- one I cloud-based and other one are desktop based. In this report, the advantages and disadvantages of both of these are identified. As shown on the report discussion, that cloud-based SaaS provides numerous opportunities over desktop-based software. The security of the cloud-based software is identified as one of the major issue in adopting cloud-based systems. In addition to that, cost and troubles related to hardware implementation is discussed. Price, hurdles, during implementation of this software is discussed in the report. In the comparison section, four types of software have been discussed. Among those, two can be used in both cloud and desktop version and other two can be used in only cloud version. Based on advantages, disadvantages of software, software is finally recommended.

a. Introduction

Summary of “Five Point Four” Company

“Five Point Four” is a retail food business based on Brisbane, Australia. The company has a reputation of healthy food and drink supply throughout Australia. Its business have gained $1 million AUD revenue in the fiscal year 2013-14 and finished up with $12 million turnover in the fiscal year 2015-16. The growth of three year is estimated to be 9.40%.

The business however, is facing shortage of supplies and a clear communication is required between suppliers and freight managers about the amount of product the company requires and how much meal have to be moved.

As “Five Point Four” continues to expand, it is essential to keep track of their income and expenditure. Thus, a state of art accounting software is required to keep track of their finance. The purpose of this report is to evaluate two broad class of accounting software; namely cloud-based SaaS and desktop based, and to recommend a suitable one for “Five Point Four”.

b. Cloud versus Desktop

Comparison of Cloud based SaaS vs. Desktop based accounting software

Comparison of Advantages

Factor	Cloud-based SaaS	Desktop-based accounting software
Memory	One of the main advantages of cloud-based software is that these types of software do not have limitation of memory. Cloud-based software possess almost unlimited amount of memory, as these are not solid-state memory devices. High memory capability means more data storage and data handling capability. Thus, “Five Point Four” can tackle a large amount of customer or suppliers’ data at once, thereby increasing its efficiency.	Desktop-based software possesses a limitation in terms of memory. Solid-state memories are used in designing desktop-based software. Due to lack of memory, the data handling capability of these types of software are limited. Based on specified limit as indicated by manufacturer, inputs need to be provided. Thus, the computing speed of these types of software is less, making it less advantageous to “Five Point Four”.
Virtualization	Virtualization is the main advantage of cloud-based software, where, C.P.U. of a computer is divided into several number of C.P.U.s and computing can be done in these parts separately. This dividend of responsibility, increases efficiency of computing, and at the same time cannot alter the parent C.P.U. The features of the C.P.U. along with its memory, characteristics workspace are divided among all the daughter computers. This dividing of responsibility offers the provision of tackling various types of data at once.	Virtualization is not supported by Desktop-based accounting software, in each desktop a version of software has to be kept. If the software supports, it can be connected online for computing purpose. Therefore, in order to tackle different kinds of data, individual software has to be kept in individual desktops.
Centralization and accessibility	Cloud-based software possesses a provision of centralization. The centralization process provides a window of opportunity of data centralization, by virtue of which, subsidiaries of a company remain well connected. The accessibility of this software is universal; any authenticated employee can access it.	Desktop-based accounting software can be used centrally with use of virtual teams of a company and by connecting respective software online. Thus although the centralization and accessibility process is supported, the initialization of the process is slow

Table 1: Comparison of advantages of Cloud-based SaaS and Desktop-based accounting software

(Source: Wei et al. 2014)

Comparison of Disadvantages

Factor	Cloud-based SaaS	Desktop-based accounting software
Security	Although major sets of advantages is provided by cloud-based accounting software. However, the security and safety features of is low compared to solid-state devices. The interface of cloud-based software is not secure and so as its authentication process. This weak security can lead to a data breach, which is undesirable.	As a solid-state device, desktop-based software possesses tight security (authentication and end-to end encryption). Thus, probability of data breach is relatively low, compared to that of cloud-based software.
Initial hardware requirement	Cloud-based software requires initial hardware requirement. In general, a mainframe computer is required to support virtualization process.	These types of software are well supported by normal desktop and operating system such as Windows, Linux, and Macintosh. Thus complexity of hardware requirement is nil for implementation of these types of software.
Cost	The cost of the software as well as the cost of initial hardware requirement is high.	Cost of software is considerably low.

Table 2: Comparison of disadvantages of Cloud-based SaaS and Desktop-based accounting software

(Source: Ali, Khan & Vasilakos, 2015)

Benefits of cloud-based SaaS

Cloud-based SaaS accounting software provides unique properties such as unlimited memory, provision of virtualization, centralized accessibility and consequently the speed of computing (Avram, 2014). As “Five Point Four” is a growing, it needs to fix its backbone (finance) of respective company. As requirement of data in increasing day by day, software needs to be so chosen that it can tackle a large number of data, within a specified time limit. Therefore, cloud-based SaaS is necessary for “Five Point Four”. Figure 2 shows adoption of cloud-based system worldwide, which in turns justifies the necessity of cloud-based system9.

Limitations of cloud-based SaaS

Limitations of cloud-based software are its implementation cost and its security. These types of software are too expensive for a SME like “Five Point Four” to implement. On top of that, these types of software have an issue of security, as interface of these are not secure. The authentication of cloud-based software supports two-factor authentication (2FA), whereas multifactor authentication is required, which is difficult to implement (Sadiku, Musa & Momoh, 2014).

Figure 1: Cloud-based SaaS “Freshbooks”

(Source: Sanaei et al. 2014)

Changes required in adoption of cloud-based SaaS

“Five Point Four” needs to change their existing hardware to make it compatible with cloud environment. A mainframe computer system is recommended to support virtualization process.

Figure 2: Cloud adoption in worlwide business

(Source: ec.europa.eu, 2016)

c. Comparison of Solutions

Summarization of software

Software	Website	Price	Advantages	Disadvantages
“Xero”	https://ww.xero.com/au/pricing/	$25 /mo To send 5 invoices To enter 5 bills 20 bank transactions are allowed Payroll for one person $50/mo for unlimited invoice and bills Payroll for 2 people $65 for payroll up to 5 people	As a cloud-based software it posses Unlimited memory Virtualization Centralization	As a cloud-based software, its disadvantages are: Security Cost Implementation
“Freshbooks”	https://www.freshbooks.com/pricing	$7.50/mo for lite version (5 clients) $12.50/mo for 50 clients $25.00/mo for 500 clients	Ease of accessibility Speed of computing Centralized access Unlimited memory	Third party authentication is not secure Expensive
“QuickBooks”	https://quickbooks.intuit.com/pricing/	$10/mo basic features (single user) $17/mo for basic features along with bill managers and Multiple users (maximum 3) $30/mo for more than five clients	Ability to tackle various kinds of data Multiple users are supported Core server can be maintained Desktop version offers more security	Cost of cloud-version is high Security risk is high
“AccountEdge”	https://AccountEdge.com/pricing/	$499 one time free license	As an ERP based software, this supports Banking, Sales and General Ledger Payroll services CRM services HR management Project Management Warehouse management Production planning Desktop version provides security and ease of access	Third party authentication problem Interface is less secure Multi Factor authentication is not supported in cloud version Desktop version is not equipped with all the features

Table 3: Comparison of four softwares

(Source: Rittinghouse & Ransome, 2016)

d. Conclusion

Recommendation of software

The aim of this report is to recommend accounting software for “Five Point Four” Company. The above discussion has provided a complete description including advantages and disadvantages of cloud-based accounting software and desktop-based accounting software. The following recommendation is based on the above discussion.

“Xero” and Freshbooks are purely cloud-based software. No version of these two types of software supports in the conventional desktop systems. It would be expensive for a new SME like “Five Point Four” to implement. The hardware requirement to support these two requires modification of entire IT infrastructure of “Five Point Four”. Thus, along with cost, it would require quite an amount of time to halt the business processes. Thus, these two despite their advantages are not beneficial.

“QuickBooks” and “AccountEdge” are two software tools that come in both desktop version and cloud version. Thus, it would be beneficial for “Five Point Four” to use one of these two. As desktop version is supported, business processes can be continued simultaneously with up gradation process. The software are designed in such a way that software version can be upgraded to cloud version, although initial requirement of hardware is required as for any cloud version. As implementation in a new manner is not required, it saves time.

Now a comparison of “QuickBooks” and “AccountEdge” shows that, “QuickBooks” can be only used for accounting purpose. Only several types of data related to finance and accounting can be tackled with this software. On the other hand, “AccountEdge”, despite its high cost compared to QuickBooks, provides numerous advantages. “AccountEdge” supports various functions, such as accounting, HR management, Production planning, CRM services and Payroll services. Thus, as a whole, “AccountEdge” is ERP software, which supports several functionalities. The function of an ERP is not bound to any function, but it is multitasking software. Along with accounting, one of the most important parts of business policy of any company is customer feedback and data related to customers’ choice. ERP software along with data storage and collection can also perform data analysis. Data analysis helps to detect future demands of customers, which can help respective company to organize their business polices accordingly. ERP software can plot graph and chart based on data analysis. Thus, a visual presentation is also possible using this software. It is to be noted that cloud version of “AccountEdge” is required to get access to this features. In coming future, these features will be required to tackle heterogeneous data. Therefore, “AccountEdge” is recommended for “Five Point Four”.

Tags:acc508