Business Accounting Supplied by Wollongong

Question: Describe about the Business Accounting for Supplied by Wollongong. Answer: Introduction The building material is supplied by Wollongong. It operates on a small basis however, various economic transactions take place in the business. Therefore, it is a strong need to have tools that will aid in strengthening the business and provide a strong support. MYOB can be used by the business as it is a leading provider of solutions that pertains to business and covers areas such as accounting, job management, reporting, etc (Weistroffer et. al, 2010). Economic transaction in a small wholesale organization Economic transactions are those transactions that are directly involved with the benefit of the company. It is the activity that brings revenue to the company. When it comes to wholesale organization, there are many transactions that are witnessed in the normal routine. Wholesale organization involves tasks on a complex scenario. The day to sales happens in a small wholesale organization that needs a proper recording (Miller, 2002). Further, the inflow and outflow of cash need to be ascertained. Secondly, the stock movement is one of the main economic transactions that need a proper recording. Thirdly, storage of product on various parameters is another important transaction. Further, the exchange of information between the supplier and buyer is yet another economic activity that brings revenue. Fluctuation risk that is linked to price is yet another economic transaction because it impacts the inflow and outflow of funds. These are the economic transactions that are present in the ca se of small business and are importantly linked with the generation of revenue (Porter, 2008). Therefore, utmost attention is needed in this regard. Advantages of using online accounting software tool in comparison to the maintenance of a manual set of books. The online accounting software tool is a big boon to the business and especially the small and medium size business. Such programs can be purchased at relatively low cost. Manual set of books is cumbersome and difficult to prepare. It needs a lot of labor and chances of error are present (MYOB, 2016). However, the accounting tools perform various activities like invoicing, payments, wages, etc. Further, it enables to carry out important function like invoicing, payment of wages and preparation of a report on a regular basis that is the trading and profit and loss account that facilitates the preparation of the balance sheet. The introduction of online software tool provides innumerable advantages over the manual set of books like speed and accuracy. It is the primary advantage that helps in ensuring faster application and process. Moreover, the state of the company can be seen with ease and flexibility. The accounts of customers have updated automatically, the supplier's invoices are recorded on its own, general ledger is updated, etc (Cats, 2016). Therefore, a variety of advantages exists that is not available when it comes to the manual system. Moreover, for a small business, it is important that the internal reports are readily available so that policies can be formulated with ease and flexibility. With the help of software like MYOB the summary of aged debtors can be extracted, valuation of the stock can be done, evaluation of the sales can be done and evaluation of payroll is easy (Cats, 2016). When it comes to the manual system, it takes a lot of time and chances of error are more. Therefore, a slight mistake can hamper the entire process. Further, the best use of the software appears in the fact that when the transaction is entered once, it gets automatically updated with different accounting records as the ledgers are completely integrated. On the contrary, the manual system needs three to four entries for recording the same. It even leads to the motiva tion of the staff as the staff gets experienced in MYOB while manual labor becomes complex (MYOB, 2016). Overall, the use of accounting software leads to savings in terms of cost. Transaction cycle Small wholesale business has two major transaction cycles that are the sales cycle and the financing cycle. Sales cycle The sales cycle of Wollongong-based supplier happens when the order is received from a customer. In this scenario the credit worthiness of the customer is evaluated, the product is then shipped to the customer. An invoice is received and payment is collected accordingly. Therefore, a sale cycle is a set of interrelated activities (Mehdi, 2006). In this scenario, MYOB can play a leading role. Since, the information is system generated, the credit worthiness of the customer can be known with ease and flexibility on the click of a single button. Moreover, the software will help to know the stocks in hand and decision regarding the shipment can be taken accordingly. Purchase cycle For Wollongong, this cycle even matters because supplier for goods is issued a purchase order, receipt of the goods, recording of accounts payable. This cycle is expenditure cycle and MYOB can be useful in this scenario. MYOB can help the company in knowing the requirement of the purchase order. This will help the company to ascertain the goods that are needed for business (Weber, 2016). Moreover, the requirement of cash can be effectively determined with the help of the accounting tool. It will help to know whether the business can operate with the amount of the petty cash or procurement of funds needs to be done. Therefore, this tool helps in taking a strong decision when it comes to strategy. Strategically decision and plans can be formulated. It benefits the company both in terms of cost and policies. Risks and associated costs an organization faces for maintenance of manual set of books Manual set of books becomes cumbersome and prone to a lot of mistakes. In short, computerized accounting scores over manual practices. In the case of a manual set of books, there are various disadvantages that the firm might face. The biggest risk is the manipulation of accounts. This is one of the major problems that concern every organization that uses the manual practices (Brien Marakas, 2009). When it comes to a manual set of books, it can easily tamper and errors are more in this regard. This leads to unethical practices that dupe the innocent customers and lead to serious losses. Secondly, a manual set of books is easily prone to destruction (Kimball, 2008). Accidents, fire, theft, etc can lead to the destruction of the entire records. However, the presence of software has eliminated such risks and lead to ethical practices. Thirdly, preparation of a manual set of books is cumbersome in nature. There are innumerable transactions and a difference or a miss leads to a big error. Moreover, in the case of a manual set of books effect of transaction needs to be provided to every ledger and corresponding entries needs to be passed. However, such a problem is eliminated when software like MYOB is used. Manual set of books needs skilled personnel to look after it and hence, a lot of responsibility rests on him. Further, any audit or inspection takes a lot of time. On the other hand, technological inventions have eliminated such issues. There are various costs that need to be borne when it come to a manual set of books (Predisco, 2016). Costs like office expenditure, the cost of compliance, staff and personnel needs to be incurred. This burdens the organization. If the manual books are complex in nature then requirement of additional staff comes into the picture and this proves to be an additional burden for the company (Brien Marakas, 2009). Similarly, Wollongong will face such a problem if the manual set of books is prepared. Therefore, it is imperative and the need of the hour to have software like MYOB that will aid the organization and enhance the functioning of the company. Conclusion From the above report, it is clear that Wollongong operates on a small scale and to cater to the changing scenario, the presence of online software is essentially needed. MYOB can be used and it has innumerable advantages. The benefits of software-based system in comparison to the manual set of books are highlighted and it comes to the forefront that online system is well equipped and provides innumerable advantages (MYOB, 2016). Therefore, it is highly advocated that software must be used because it is cost effective and plays an important role in the generation of income. Further various other benefits are present that leads to a greater course of activity. Importantly, the fraud is less and hence, the business must vouch for it. References Brien, J Marakas, G 2009, Management Information Systems, McGraw-Hill. Cats 2016, MYOB Training, viewed 23 October 2016 https://www.caats.com.au/myob-training-pi-10.html Kimball, R 2008, The Data Warehouse Lifecycle Toolkit, Wiley. Mehdi, K.P 2006, Emerging Trends and Challenges in Information Technology, Management. Idea Group. Miller, R 2002, The Legal and E-Commerce Environment Today, Thomson Learning. MYOB 2016, MYOB accounting system, viewed 23 October, 2016 https://www.myobaccountingsystem.com/ MYOB 2016, Case studies, viewed 23 October, 2016 https://www.myob.com/au/enterprise/case-studies#?filterBy=IndustryfilterByTag=All Porter, M 2008, Competitive Strategy: Techniques for analyzing industries and competitors, Free Press Predisco 2016, Learning MYOB, viewed 23 October, 2016 https://www.perdisco.com/au/myoblearning/software/default.aspx Weber, M 2016, Manual Accounting Versus Computerized Accounting, viewed 23 October, 2016 https://www.experience.com/alumnus/article?channel_id=accountingsource_page=breaking_inarticle_id=article_1173385201144 Weistroffer, H.R, Smith, C.H and Narula, SC 2010, Multiple criteria decision support software, Springer: Oxford University Press.