Mind Your Own Business: Accounting Software In An Organization (Essay Sample)

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Executive Summary
This report explicated small Wollongong based supplier of building materials in terms of the economic transactions and events taking place and the applicability of MYOB in terms of facilitating the success of accounting transactions. It points out that sales and purchases are key transactions that must be well-recorded. In respect to the benefits of using MYOB as an online accounting tool, the report brings out the view that it enhances automation, eases data access, and the improvement of productivity in the accounting department. The purchase and payroll cycles must be perfectly understood by the business for effective accounting. The report also emphasizes that small businesses need to be aware of significant risks such as inconsistency, time consumption, and security. It is concluded from the report that MYOB is instrumental in simplifying accounting in small businesses and promoting accuracy.
Key Words: economic transactions, MYOB, sales, purchases, payroll cycles, inconsistency, time consumption, security
Table of Contents
TOC \o "1-3" \h \z \u Executive Summary PAGEREF _Toc465083805 \h 2
Introduction PAGEREF _Toc465083806 \h 4
Economic Transactions and Events Taking Place in a Small Wholesale Organization PAGEREF _Toc465083807 \h 4
Benefits of Using an Online Accounting Software Tool PAGEREF _Toc465083808 \h 5
Transaction Cycles and the Usefulness of an Online Accounting Software PAGEREF _Toc465083809 \h 5
Risks and Associated Costs for Maintaining Manual Sets of Books PAGEREF _Toc465083810 \h 6
Conclusion PAGEREF _Toc465083811 \h 6
Reference List PAGEREF _Toc465083812 \h 7
Introduction
Businesses have understood the significance keeping their books of accounts up-to-date from time immemorial. This has become a critical part of businesses whatever the size. However, small businesses are the focus in this report since they are usually ignored when it comes to development of accounting aspects. Consequently, the rise of online accounting software has proven to be of great use for these small businesses CITATION Wys15 \l 1033 (Wyslocka & Jelonek, 2015). This is because it has enabled business owners to operate without having to worry about being knowledgeable in accounting and bookkeeping. Accordingly, MYOB has worked to conveniently facilitate financial information and organizational invoicing which can be done anywhere and anytime. The following report is prepared for a small Wollongong based supplier of building materials to various licensed builders. MYOB simplifies the process of accounting in small businesses ensuring that they keep
Economic Transactions and Events Taking Place in a Small Wholesale Organization
Various economic transactions and events would take place in a small wholesale organization such as the small Wollongong based supplier of building materials. One such economic transaction that would take place is sales. This economic transaction would involve the transfer of property in this case building materials for money or credit CITATION Lim131 \l 1033 (Lim, 2013). As a result the wholesale organization will be able to earn revenue when their goods are delivered. This transaction tends to be recorded in the general journal as a kind of debit to cash or sometimes as accounts receivable. Another relevant economic transaction and event that can take place is purchases CITATION Sac13 \l 1033 (Sacer & Oluic, 2013). This type of economic transaction usually results in an increase in benefits for the wholesale organization. These purchases are usually facilitated by cash or credit. In this regard, when these purchases are made the resultant impact is an increase in accounts payable. Additionally, receipts represent another possible economic transaction and event that can take place in such an organization. As economic transactions, receipts refer to businesses accepting payment from another for the delivery of goods or services CITATION Lim131 \l 1033 (Lim, 2013). For the small Wollongong based supplier of building materials this economic transaction will refer to it getting paid by another business for its building materials. The resultant impact of this economic transaction is a decrease in accounts receivable and an increase in cash or equivalents to this. The final economic transaction that which can take place in a small wholesale organization is payment. This refers to a business making compensation to another for receiving its goods or services CITATION Sac13 \l 1033 (Sacer & Oluic, 2013). This compensation can be in form of cash or equivalent. The impact of this economic transaction is a reduction in accounts payable for an organization or a decrease in cash or equivalent for the organization.
Benefits of Using an Online Accounting Software Tool
Using an online accounting software tool for an organization that is relying heavily on maintaining a manual set of books such as the Wollongong based supplier of building materials provides a number of benefits. The first benefit of using an online accounting software is automation. This automation is brought about by the fact that the software deals with all the calculations to be made CITATION Sac13 \l 1033 (Sacer & Oluic, 2013). Compared to the use of a manual set of books the use of this software saves time, money, and eliminates the chances for error. Therefore, organizations are able to receive fast and accurate documentation such as invoices and purchase orders. The second benefits of the use of this software is it eases data access and allows these data to be easily shared across various platforms. That is various people are able to access data at a single time through this software something that is not likely for manual set of books CITATION Sac13 \l 1033 (Sacer & Oluic, 2013). The third benefit of the use of an online accounting tool as opposed to manual means is it enhances productivity when it comes to accounting. This is because of the fact, paperwork tends to be quite tedious for many employees impacting negatively on their ability to be productive. However, given that online accounting software such as MYOB is faster and a bit more accurate it therefore eliminates the any boredom and fatigue that employees develop when filling in paperwork while using the manual set of books. Employees are therefore more productive while using the online accounting software CITATION Lim131 \l 1033 (Lim, 2013). The final benefit that can be received from using an online accounting software as opposed to relying on the maintenance of a manual set of books is improved management of financial information. This is enhanced by the fact that reports can easily be produced and in a relatively shorter time compared to manual accounting.
Transaction Cycles and the Usefulness of an Online Accounting Software
In a small wholesale organization such as the Wollongong based supplier of building materials there are various transaction cycles. An example of two such transaction cycles in this organization and how an online accounting software like MYOB would be useful is follows CITATION Lim131 \l 1033 (Lim, 2013). The first example of a transaction cycle is purchasing cycle. In this transaction cycle a purchase order is issued to a supplier such as the Wollongong building material supplier and this company records an account payable and makes payment to this supplier. Accordingly, the purchasing cycle arises from the various sequential and interrelated activities that take place in relation to this CITATION Wys15 \l 1033 (Wyslocka & Jelonek, 2015). An online accounting software tool such as MYOB would be useful in facilitating this transaction cycle. This is evidenced in this tool’s capacity to customize purchase records, automate them, and also foster the making of a purchase order. The second example of a transaction cycle is the payroll cycle. For the Wollongong based supplier of building materials organization, this payroll cycle involves the following sequence of activities. The organization will record the times of its staff, carry out a verification of the times that have been worked, determine gross pay, oversee the reduction of taxes and finally avail paychecks for their staff CITATION Sac13 \l...