Compare and contrast the features/ functionalities of two accounting software packages offered by accounting software package vendors (MYOB and Sage100c)

Compare and contrast the features/ functionalities of two accounting software packages o±ered by accounting software package vendors (e.g. SAP, MYOB, Xero etc.) within your selected category in question 4. (600 words) c) Which one would be the most suitable vendor (and accounting software package) for the Bakery business and why? (600 words) ²ormat of the Report 1. You at least should have the following details: a. Assignment Cover page clearly staTng your name and student number b. A table of contents, execuTve summary c. A brief introducTon or overview of what the report is about. d. Body of the report with secTons to answer the above quesTons and with appropriate secTon headings e. Conclusion f. List of references. 2. Diagrams and tables clearly labelled and explained. 3. Ensure all materials are correctly referenced. Plagiarism will be severely penalised

Comparison of Two Popular Accounting Software Packages for

Small and Medium  Enterprises                                                                                      21

Dr C C Steve Fong

School for Higher and Professional Education, Vocational Training Council

Introduction

The   rapid   growth   of  computer   technologies   over  the last decade  has  made  the  computerisation of operations essential for almost all organisations. A computerised financial accounting system can help ensure maximum efficiency and effectiveness in recording accounting transactions.

Small businesses depend on customised business accounting software.  Since most  of these  businesses carry out  small- scale  operations,  it  is usually  not  cost-effective  for them to pay for the  development of a tailor-made system or a modified system.

Nowadays small business accounting software packages are relatively easy to use and  cover a wide variety of complex options.  Years  ago  small  business  accounting  software was not popular as the small businesses were not as well- structured   as  the   contemporary  packages.   One  reason for this was because  there  were  too  few small businesses to  make  the  manufacture of  small  business  accounting software  profitable.

In  Hong  Kong  there   are  now  over  268,000  small  and medium  enterprises  (SMEs),  representing  about   98%   of all local enterprises. Each SME employs less than  50 staff. With this critical mass, both  the development and trading of small business accounting software have become profitable for software  manufacturers.

There are over 500 business accounting software  packages in the  market.  The choice of  an  appropriate package  is therefore a major concern  for the  effective and  efficient running of SMEs.

Selection of an Accounting Software

Package

Accounting  software  packages  for  SMEs  should  be  able to record  basic financial transactions, such as the  general ledger, accounts  receivable, accounts  payable, and payroll. Users should  be  able  to  generate and  print  quotes,  sales

orders, purchase  orders, cheques,  and customisable as well as professional-looking reports. For ease of reference,  both printed and online documentation should be provided. The software  also needs  to support  multiple users at different security levels, import and export accounting data in several formats, and help users to transmit data over the company network  and the Internet. Depending on the nature  of the users’ business, users may also need to make direct deposits and e-commerce  payments  or to set up a web store.

Evaluation of DacEasy and MYOB

DacEasy and  MYOB are two  popular accounting software packages  used  by Hong  Kong SMEs. DacEasy  comprises four basic sections: Accounts Receivable, Accounts Payable, Inventory,  and  Payroll.  MYOB  consists  of similar  sections and enables the construction of a wide variety of financial reports.

IT  professionals,  such  as  those  at  TopTen  Reviews  (http:

//accounting-software-review.toptenreviews.com),have conducted  studies   on   DacEasy   and   MYOB   based   on an analysis of ease of use, cost and scalability, help documentation, accounts  receivable, accounts  payable, payroll, inventory, time billing, general ledger, reporting options and integration with other software.

Features

Ease of Use

22         Ease  of use  is a fundamental  concern  when  it  comes  to

accounting software  as SMEs have little resources to spare for  software  training.  DacEasy  is  easy  to  operate; users can  navigate  from section  to  section  through  the  middle of the  screen.  Users can select  as many or as few of the tool bars to be visible as they like. However, toolbar icons are not conveniently designed as DacEasy does not include small  descriptions  permanently  shown  on  each  icon.  On the other hand, MYOB’s structure is intuitive; the on-screen commands   make  it easy  to  find every accounting item. Users can follow the  systematic instructions that  map  out each  accounting task.  This  helps financial management, especially  for  beginners  who  do  not  understand  every step  in  each  task.  It  is easy to  install  MYOB. In  addition the navigation bar provides quick access to common  tools from any section in the programme.

Cost and Scalability

One of the major differences between the many basic accounting   packages    that   users   can   buy   for   several thousand dollars, and a mid-market accounting application that  might cost tens  of thousands of dollars, is scalability. This refers to the  number  of simultaneous users that  can operate  the   software   or  the   number   of  accounts   and locations that  can be supported by the  software.  DacEasy and  MYOB both  sell a single-user version and  networked multiple-users version of their software.  There is not a significant difference in price between the  two  packages. DacEasy (single-user version) costs $3,000  while the equivalent MYOB  package  costs  $3,650.   The cost  of  an additional user license is proportionally scaled.

Help Documentation

Both DacEasy and  MYOB provide printed and  online help documents. A built-in search  tool in DacEasy helps users find the correct location in the index. The help menu at the top of each screen offers several options in the context  of that  screen.  MYOB has a quick access button attached to every screen, so users can find topics easily.

Accounts Receivable

The  DacEasy  section  supporting  accounts   receivable  is called Customers. Sub-categories are Order Entry, Invoicing, Point of Sale, Forms, Banking, and  Periodic. Users cannot send invoices by e-mail or create  estimates for items to be shipped. Users can, however, manage customer  lists, make invoices, and create backorders.

MYOB   Accounts   Receivable  enables  users   to   manage their income and  handle finance charge  calculations for customers   easily.  However,   the   programme  does   not provide shipping tools, so users cannot  estimate shipping costs or track shipments.

Accounts Payable

DacEasy  possesses  several  Accounts  Payable  tools  under the Vendor section. Sub-categories include Vendors, Purchasing,   Forms,   Banking,   and   Periodic.   Users  can process  basic purchase  orders  and  quotes,  print cheques, and  manage vendors.  Customisation of purchase  orders, quotes  and vendor cheques  is not available.

MYOB  users  can  enter  purchases,  pay bills, and  support electronic  payments.   Users  can  also  print  cheques,   tax forms,  and  purchase   orders.  The  only  tool  which  users cannot  obtain is the creation of vendor credit memos.

Payroll

The DacEasy Payroll sub-categories include Employees, Management,  Tax  Deposit,  Month,   Quarter,   and   Year- End. Users can administer the  payroll, enter  time-tracking accounts,  and set up direct deposits for employees.

MYOB possesses several options to administer payroll, including  direct  deposit  capabilities.  One  tool  not  found is  the  specification of  an  employee’s status  as  active or inactive.

Inventory

The DacEasy Inventory sub-categories include Inventory, Reports, Assembly, Corrections, and Periodic. Inventory enables users to update products  and services, track items by number,  adjust inventory, and group items for assembly. DacEasy enables users  to  cost  inventory items using the LIFO, standard or average-cost  methods. However, this section does  not  specify a storage  location and  does  not allow users to include descriptions of items.

In MYOB, Inventory allows users  to  obtain average  costs and adjust item prices. Users can specify storage  locations and search for items based on the Item Numbers. However, users  cannot   make  drop  shipments  for  products   not  in stock,  and  they  cannot   choose  to  specify  whether  the costing method is FIFO or LIFO: the average-cost  method is the only costing system available.

Features

Time Billing

DacEasy does  not  provide a time billing option, but  users can  enter  time  billing  data  into  the  Payroll  Section,  and a one-time billing report  is available. With MYOB’s  Time Billing,  users  can  set  the  billing time (other than  weekly time billing) with reference  to different credit terms.

General Ledger

The DacEasy General Ledger enables users to import items directly  and  the  programme  adds  recurring  entries  for users.  Using the  Periodic Section of  the  General Ledger, users can specify the  period end  and  the  year end.  Users can  print out  the  trial balance, balance sheet,  cash  flow, and general ledger activity report.  MYOB does not list the general ledger as one of its categories, but the programme possesses   features   similar  to   a  general  ledger  in  the Accounts Section.

Reporting Options

MYOB  is  flexible and  can  be  used  to  produce  over  190 types of report.  It helps to capture  and  present  company, employee, customer,  and  vendor  information. DacEasy is less versatile in report  generation; it can produce  over 50 types of report.

Integration with Other Software

One  user  concern  is the  provision  of supporting  services for  the   software.   These   include   e-commerce   links   to the financial accounting system, integration with other applications like Microsoft Office, and support  for Adobe’s PDF   portable  document  format,   so   that   reports   and invoices can be sent by e-mail. The DacEasy General Ledger facilitates the  import of accounting items. MYOB enables the import and export of data and information from and to other software  packages.

Concluding Remarks                                          23

On the whole, both DacEasy and MYOB are capable accounting software  packages.  The former  software  can meet  the accounting needs  of a small business. The latter is  user-friendly as  it facilitates the  production of  a  wide variety of financial reports.

The  cost  of implementing  an  accounting  package  is not just the  cost  of  purchasing the  software,  purchasing an upgrade,  or  installing  compatible  hardware,  but  is  also about  how well the product  works and how well it meets users’ specific needs.  Before making a  final decision on which  accounting  package  to  use,  users  should  conduct an  in-depth evaluation based  on  the  features  considered above.  Although selecting software  is  a  time-consuming task,  the  time saved  in future  productivity warrants  the efforts spent on the decision-making process.

References

Accounting Software, 2007,  Accounting Software Review,  2007, Hedtke, J. 2004,  “A Tale of Two Markets”, Accounting Today,  New York, p. 48.

Needleman, T. 2005,  “Entry-level accounting provides lots of bang”, Accounting Today,  New York, Vol. 9(10), p. 26.