Paper, Order, or Assignment Requirements
This assignment is based on a simulated scenario. You should read the scenario carefully before planning your response to the requirements that follow.
- Before you start, you should get yourself familiar with the two accounting software, MYOB and Xero.
- The output of your assignment should be in the form of a business report. For the requirements of a business report, see a document entitled “Key Sections of a Business Report” which is available on Moodle under Assessment.
- The report should be word processed, and should not be more than 1,000 words, excluding references and appendices.
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You are a Chartered Accountant and operate a small accounting practice. In addition to providing accounting and tax compliance services, you also advise on accounting information system selection and implementation.
Jennifer Wilson, a new client, was introduced to you by your business associate. She seeks your assistance in selecting an appropriate accounting software for her business.
Jennifer has a passion for children wear. She holds a diploma in garment design and has been working as a marketing manager for a leading garment factory specializing in children wear for more than 10 years. Now she wants to be her own boss. She just started a new business called Kiwi Kids (KK). Jennifer intends to buy from manufacturers of children wear both locally and internationally, and distributes to wholesalers and retailers throughout New Zealand.
To start with, the business will hire two employees, one is responsible for procurement and warehousing, and the other one will be responsible for sales order processing and office administration. Jennifer’s role will be to source suppliers and customers and maintain relationship with them. In addition, she also wants to keep the accounting records herself. Although she has no formal training in accounting, she believes most accounting packages should be easy to use.
As some of the suppliers are overseas, Jennifer expects that she would have to go overseas quite often and ideally she could have an accounting package that would allow her to do the accounting work while overseas. She intends to ask your firm to handle the tax returns for her business.
Upon request, she provided you with the following additional information:
- The business will stock approximately 500 inventory items and she needs to know stock on hand at any time so that she can answer an enquiry from customers.
- The business now only has two employees, it is not important to have a computerized payroll software immediately. However, she expects that her business will grow quickly in the next couple of years when the firm will need to hire more staff to cope with the business expansion.
- Jennifer would also like to have timely reports on inventory status, customers and suppliers ageing reports so that she can manage the cash flow and to follow up with slow paying customers.
Jennifer told you that she wants an accounting package that is cost effective (not too expensive), user friendly (even a person with limited accounting knowledge can use it), and with good security control. She heard of two popular accounting software: MYOB and Xero, and is unsure which one is more suitable for her business.
Write a business report to Jennifer comparing the two accounting software, and in particular your report should cover the following:
- Modules and functions;
- Ease of use;
- Security and control;
- Report availability;
- Costs; and
- Your recommendation as to which accounting software is more suitable for her business, with justification.
Note: You can make assumptions for information not provided.