Accounting has come a long way since the days of the abacus. The arrival of computers quickly made old-school ledgers and paper-based accounting obsolete, changing the accounting industry forever.
Likewise, the arrival of the Internet and internet-based accounting systems has significantly changed the landscape of accounting. Gone are the days of physical records of documents, or at the very least unwieldy server rooms to store your data – now both you and your client can access their accounting package live, from anywhere in the world.
Moving to cloud-based accounting makes sense for most businesses if they haven’t done so already. Cloud accounting allows for your data to be live, secure, and easily accessible. Reconciliation processes have improved greatly, with bank feeds imported directly into accounting systems to improve efficiency and reduce error rates. Advisors can directly change their clients’ accounting records as necessary, given they have the required permissions to do so, allowing accounting records to be as accurate as possible for the purposes required.
The two major cloud accounting software packages used in Australia are Xero and MYOB. There is much debate about which package is better between the two, both among businesses and their advisors. To settle this debate, Liston Newton’s accounting and advisory experts have weighed the prosand cons, pitting the two against each other. With the guide below, you can confidently choose the right accounting package for your business.
If you’d like catered advice on how cloud-based accounting packages can benefit your small to medium business, get in touch with us today.
Meet the challengers
MYOB, the venerable powerhouse
MYOB was founded in the early 1980s. It was the dominant player in computer-based accounting software for Australian small businessesfor a significant period, developing a reputation for itself in the provision of accounting software.
To keep up with a transforming industry landscape, MYOB released its own cloud-based accounting package in the form of MYOB AccountRight and MYOB Essentials. These have been continuously updated since, and are used by many businesses in Australia today, both from their Windows application and online.
While MYOB’s cloud-based products offer similar features to Xero, there is a tangible feeling among advisors the company is always playing catch up to their primary competitor, who was the first innovator in the cloud accounting space.
MYOB’s promise as a brand is to ‘simplify success’, a promise which it has certainly fulfilled in its tenure.
Xero, the innovative challenger
Xero was founded in 2006 by tech entrepreneur Rod Drury in Wellington, New Zealand, where its headquarters are still located. Originally, the company was to be called Accounting 2.0, representing the reinvention of computer accounting to a decentralized, easy-to-access format.
Since its creation, Xero has dwarfed MYOB’s market share, now being used in over 180 countries worldwide and supplying over 3 million subscribers as of September 2021. It was also funded uniquely, going public on the New Zealand Exchange early in its existence - its stock has risen from $1 NZD on debut to $77 NZD today.
Xero’s promise as a company is simple: ‘beautiful accounting software, and although beautiful might be a strong word many advisers we speak to do seem to prefer the useability and design of Xero.
The advantages and disadvantages of MYOB and Xero
It is important to stress that there is no correct or incorrect decision in the Xero vs MYOB debate. Both software packages will provide powerful, responsive solutions that will streamline and strengthen your accounting processes.
Xero vs MYOB: Comparison of features – advisor opinions
[table][thead][tr][th][/th][th]Xero[/th][th]MYOB[/th][th]Winner[/th][/tr][/thead][tbody][tr][td]Cost[/td]
[td]Starter: $29/month <br> Standard:$59/month<br> Premium:$76/month<br> (Premium plan includes automatic superannuation and payroll for five people, with higher monthly costs for more people on payroll)[/td]
[td]Lite: $28/month<br> Pro: $53/month<br> AccountRight Plus: $130/month<br> AccountRight Premier: $160/month<br> (Features added in every level, with full unlimited payroll included with AccounrRight Plus and Premier)[/td]
[td]Xero’s prices for the most part provide the same or better functionality than MYOB for similar prices, with the exception of payroll if your business has more than 200 employees.[/td]
[/tr][tr]
[td]Sign-up and installation process[/td]
[td]Slick, easy, and intuitive.[/td]
[td]Also slick and easy, however more advanced features such as inventory tracking may require assistance to get functioning at its full potential.[/td]
[td]Xero.[/td][/tr][tr]
[td]Compatibility[/td]
[td]Both Windows PC & Mac.[/td]
[td]For browser functionality: Both Windows PC & Mac.<br> <br> For AccountRight desktop application: Windows PC only.[/td]
[td]Xero.[/td][/tr][tr][td]Payroll[/td]
[td]Starter provides payroll for one person, Standard for two. Increasing prices for further staff requirements, and no unlimited payroll plan (max 200 in their $177/month plan).[/td]
[td]Lite and Pro plans provide payroll for $1.50 per person, with a max of two people for Lite and no limit for Pro.<br> <br> Both AccountRight subscriptions come with unlimited payroll.[/td]
[td]MYOB, as Xero does not offer an unlimited payroll option, and is more limited for paying staff at lower subscription tiers.[/td]
[/tr][tr]
[td]Bank Compatibility[/td]
[td]Unlimited bank connections with all subscriptions.[/td]
[td]Lite limits to 2 bank connections. All other subscriptions offer unlimited connections.[/td]
[td]Xero.[/td][/tr][tr]
[td]Reporting[/td]
[td]Multiple reports able to be run at once, with fully customizable reports available to power users.[/td]
[td]One report able to be run at a time, with some limited customization available. Overall reporting is limited.[/td]
[td]Xero, especially for power users (including your adviser!)[/td]
[/tr][tr][td]Invoicing[/td]
[td]Starter plan limits invoices to 20 invoices sent per month. Standard or above allows unlimited invoicing.[/td]
[td]All subscriptions allow for unlimited invoicing.[/td]
[td]MYOB if your business is not very complex but sends more than 20 invoices a month – otherwise, neck and neck.[/td]
[/tr][tr][td]Inventory[/td]
[td]All plans include basic inventory tracking and management.[/td]
[td]Lite and Pro limited to 10 inventory items at one location<br> <br> AccountRight Plus has unlimited items at one location.<br> <br> AccountRight Premier has unlimited items at unlimited locations.[/td]
[td]Xero, especially when you consider the advanced third-party add-ons for inventory management available to Xero.[/td]
[/tr][tr]
[td]Mobile app[/td]
[td]iPhone and Android.[/td]
[td]iPhone and Android.[/td]
[td]Xero – from our experience, the user experience of the Xero app is a lot smoother.[/td]
[/tr][tr]
[td]Employee login[/td]
[td]All payroll-inclusive subscriptions allow staff to enter timesheets, request leave, and view payslips in the Xero phone app.[/td]
[td]Lite and Pro plans allow for employees to enter timesheets, request leave, and view payslips on the MYOB YourPay website.<br> <br> AccountRight plans do not come with YourPay.[/td]
[td]Xero.[/td][/tr][tr]
[td]EOFY Data rollover[/td]
[td]Data is continuous, with no need to rollover or close a financial year.[/td]
[td]Lite and Pro plans are continuous and don’t require closing the financial year.<br> <br> AccountRight plans require manually closing and rolling over the financial year.[/td]
[td]Xero, especially for larger entities that would require the increased functionality provided by MYOB AccountRight subscriptions if choosing MYOB.[/td]
[/tr][tr]
[td]Foreign currency[/td]
[td]Multiple currency accounting supported in the Premium plans.[/td]
[td]Multiple currency accounting supported in AccountRight Premier.[/td]
[td]Xero, but only marginally based on price. Additionally, Xero has been doing multi-currency accounting for a longer time.[/td]
[/tr][tr]
[td]Online support[/td]
[td]Huge social media following, community forums, online documentation, and training videos.[/td]
[td]Community forums, online documentation and training videos.[/td]
[td]Xero. Xero’s enormous online following is a boon when it comes to finding help and support fast.<br> <br> MYOB’s differing levels of subscription, including the difference between the online-only Lite and Pro plans and the desktop or online AccountRight, mean getting the answer you’re after can be more difficult with MYOB.[/td]
[/tr][tr]
[td]Phone support[/td]
[td]Not available.[/td]
[td]Available Monday to Friday, 7AM – 7PM.[/td]
[td]MYOB.[/td][/tr][/tbody][/table]
The key differences between Xero and MYOB
Pricing
Xero’s pricing structure is significantly more straightforward than MYOB’s, as MYOB has their Lite and Pro subscriptions that are online-only while also having AccountRight subscriptions that are a hybrid of desktop application and online that each provide different functionalities. Xero, on the other hand, provides three simple tiers that provide the same overall product with increasing functionality.
Sign-up and installation process
Xero accounting software can easily and quickly integrate into or replace any existing process. In comparison, many MYOB essential and MYOB AccountRight features are purely Windows compatible.
Payroll
MYOB has the advantage over Xero for payroll services, providing both unlimited payroll and easier access to paying employees without delving too far into paying for features your business may not need.
Invoicing and inventory
Xero’s customisation capabilities with third-party add-ons make it better suited to invoicing and inventory management than MYOB.
EOFY data rollover
MYOB’s online-only packages are equal to Xero in continuous data, however their AccountRight packages require manual EOFY rollover and assuch Xero’s functionality in this area is unmatched.
Online & phone support
Xero’s vast resources online, especially with their online community of users worldwide, make it easy to find the answers needed for most questions.
MYOB does, however, provide the benefit of business-day phone support, if required. Xero does not offer phone support at all.
3 considerations for picking MYOB or Xero for small business
1. Data security. An increasingly important consideration to make when choosing a software for your business. Both platforms require two-factor authenticationfor online log-ins. Additionally, both services have ISO 27001 Security Standard compliance, SOC2 security assurance audits, and comply with the Payment Card Industry Data Security Standards. From what we can tell, your data is safe with both Xero and MYOB.
2.Third-party app integration. Xero has an app marketplace with over 1000 third-party apps that can integrate seamlessly with your accounting package to create a bespoke solution for your small business. Xero has been including app integrations since 2011, an innovator in the field. On the other hand, MYOB now provides app integration too, opening their API in 2015 to stay relevant in the accounting software field. Overall, we consider Xero more mature in their appintegrations.
3.Listen to your accountant’s needs. The best way to choose between Xero and MYOB is to ask your accountant’s opinion. They know your business’ needs best and may feel more proficient and productive with one choice over the other.
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MYOB vs Xero: the clear conclusion
Xero was designed from the ground up in a world with the internet, avoiding baggage leftover from an earlier computer-based accounting period. It is simple, elegant, and intuitive for a small to medium-sized business. MYOB is certainly catching up in functionality, but it doesn’t quite offer the same polished, uncomplicated user experience. Anecdotally, advisors we speak to much prefer Xero over MYOB.
Change from MYOB to Xero with Liston Newton
At Liston Newton, we ultimately choose to use and recommend Xero as it works beautifully and saves both us and you time. We are not only a Xero partner firm but have attained Xero Platinum status, allowing us to provide a higher level of Xero service to our clients. We are proud to be a Platinum partner because it reflects our level of experience in helping businesses across Australia use Xero.
If your business needs assistance with MYOB to Xero migration, our advisors can help run a smooth transition with minimal disruption. Book a consultation about how you can implement Xero into your business and migrate over your existing accounting software.
