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Xero Accounting Software Case Study

Essay by   •  April 19, 2018  •  Case Study  •  2,480 Words (10 Pages)  •  1,416 Views

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Introduction

Accounting software is one of the crucial business applications or business software. The core resource of any business is its capital resource and the finances. Since, the capital resources are the source by which the business attains its assets and other usable inventory, it is essential that the businesses manage the finances and capital very efficiently. Therefore, accounting software becomes a highly usable and highly dependable software for the businesses. This software is mostly used by the accounting department within the organization to effectively handle the regular accounting functions of the organization. The accounting software generally makes record of sales and revenue, income and related expenses and helps the organization prepare financial statements that can be of beneficial use to the shareholders and the stakeholders in determining the current affairs within the organization in terms of profitability.

More than a decade ago, there were some firms such as Quest, Enron, Sunbeam, etc. who were charged with accounting fraud because of which many people lost a huge amount of money, which amounted to almost billion dollars in an average, which resulted in rechecking and revision of the accounting protocols to be followed. This was a turning point for accounting and thus accounting software packages were majorly developed to control and manage the accounting functions in the organization ethically[1]. The major functions of an accounting software are to record and manage the recievable, payable, maintain a general ledger, manage the order management and also to accurately bill the inputs of the accounting system.

Part 1

Organizational Structure

Xero is one of the accounting software package organizations in Australia. Xero was primarily developed to help the small size business organizations to manage their accounting effectively. The cloud oriented accounting system developed and used by Xero helps the organizations to be linked with the people and the correct accounting values at all times in any device that is being used by the organizational members. A firm that was established in 2006, Xero is one of the most famous and highly growing accounting software firms and offers its services to the organizations all over the world. Xero has also been noted as the most innovative and growing company in the year 2014 and 2015. They have offered employment opportunities to almost 1800 people globally through 20 offices all over the world. The management of these offices and the employees is very well handled by the organizational team of Xero which is depicted in the organizational structure that is given below.

CEO, Steve Vamos

  • COO and CFO, Sankar Narayan
  • Chief Product, Platform and Data officer, Tony Stewart
  • Chief Partner Officer, Anna Curzon
  • Chief Customer and People Officer, Rachael Powell
  • Chief Accounting Officer, Kristy Godfrey-Billy
  • Craig Hudson, NZ Country Manager
  • Trent Innes, AUS Managing Director
  • Gary Turner, MD UK
  • Keri Gohman, American Continent, President
  • Alex Campbell, Managing Director, Asia

This structure makes the operations within Xero much efficient and reachable to the service users all across the world. Through its reach to almost all the continents and the countries, the firm has been offering standard accounting software packages to the people and companies all over the world[2].

Operational Problems that Xero could face because of its organizational structure

The firm as we see operates in a hierarchy. While hierarchy has several of its advantages such as functional specialization, well defined chain of command and also well defined authority over the employees. However, this structure also shown several problems to the organization in an operational level. Firstly, the primary problem recognized is the communication barrier. Since there are a multiple level of people in between the lower level employees and the top most employees, the communication can backfire or misfire as miscommunication. Also the specialization can become a major reason for the communication barrier if there is the presence or the communication of jargons within the organization. The Chief operating officer and the chief finance officer are the same person, thus there is also a burden of double responsibilities for a same person. This needs to be sorted out to increase the efficiency at the executive level in the business. The reach of the organization to multiple countries in the world but only through 20 offices seems to be a problem, which increases work burden to the organizational members. This structure also lacks flexibility and is more power oriented thus can also be resilient to managing the changes in the software market[3].

Acquisition Method

Xero is one of highly recognized organizations in Australia. Generally, the firm gains the information regarding the system to be utilized through the Enterprise Resource Planning. Since the accounting software is the core for any organization to manage its finances, and accounting software is the core element of ERP, ERP is efficiently used to acquire the new systems for Xero. One of the recent acquisitions that Xero has made is the acquisition of Monchilla, which is a system that makes the payroll system much more efficient. Monchilla is a US based accounting system provider. Through thus acquisition it can be understood that while looking for a new system, it looks to acquire those systems that can be integrated in the existing system of the organization[4]. The acquisition is beneficial as now the firm can offer more to its customers in terms of accounting and financial reporting service and easiness.

Sales Procedure Flowchart

The sales flowchart represents the step by step procedure by which the firm sells its products and services to its customers or to the end users. The common sales procedure consists of general steps such as order placement, order acquisition, inventory assessment, order check, and product dispatch. The sales procedure flowchart for Xero shows an entire flow of the products from the firm to the consumers hence defining the flexibility of the organizational sales system.

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