There was a time not too long ago when there was a default answer to every bookkeeping and accounting software related question. The answer was MYOB. With decades of experience behind them and the enduring love of the bookkeeping and accounting community, MYOB was the undisputed, heavyweight king of accounting software solutions.
Like many ageing champions, MYOB seemed to slow down a bit over the years and was a little slow off the mark when it came to developing a truly great cloud-based bookkeeping and accounting system. New Zealand based start-up (or is that upstart), Xero stepped in to try and take MYOB’s championship title. Today, I’ll compare the two contenders and adjudicate a winner!
There’s a lot to like about the cloud-based MYOB Essentials. MYOB Essentials
makes it dead easy for non-technical business people to focus on their core business without wasting time navigating an interface designed just for bookkeepers and accountants. Navigation avoids the use of terms such as debtors and creditors, and uses simple English like Money In and Money Out. Many (most) business owners really don’t understand double entry accounting and the use of plain English is very helpful.
Small business owners want to be able to complete everyday tasks quickly and efficiently, with as few clicks or screen taps as possible. With MYOB Essentials, creating an invoice is as simple as opening the Sales menu and selecting the Create Invoice option. There are similar workflows for processing payments and entering bills. Users can also save scanned documents straight into MYOB.
The Link Document function allows users to upload scanned documents such as invoices or receipts. That means that all data related to a particular transaction is stored in one convenient location. Unfortunately, MYOB Essentials doesn’t yet link to Cloud-based storage services like Google Drive or Dropbox – but MYOB claims that a happening thing in the foreseeable future.
Of course, there’s a direct connection to your bank account for downloading transactions and easy reconciliation. The number of bank accounts you are able to connect to MYOB Essentials will depend upon your level of subscription.
Generating reports is simple and super fast. BAS, Profit and Loss, Balance Sheet and Trial Balance are easy to produce and it’s a hassle-free process to understand how to generate the reports. The reporting interface is very intuitive.
MYOB has a straightforward export function that makes data export a breeze. Remember that you’ll need to share your accounting data at times, even if only with your accountant. Simple data export is an important function that some accounting software buyers tend to overlook. MYOB Essentials does this particularly well.
Maybe it’s me being overly critical, but the MYOB on the Go app, which helps with receiving payments and sending invoices via your tablet or smartphone, looks a bit dated. It could do with a refresh. That said, it all works just fine.
MYOB Essentials offers a 30-day free trial. Monthly subscriptions start from $25. Like other offerings, the price goes up with the increased need for services like additional bank accounts being linked (feeds), monthly transactional volumes and numbers on your payroll.
Xero is the new kid on the block. It has managed to steal significant market share from the bigger and beefier, MYOB. Unlike the early versions of MYOB, which were very focused on the experience of the accountant and getting them to push their clients to adopt MYOB, Xero led its charge with the user experience. It’s very much frontline users such as independent bookkeepers and business owners who have pushed accountants to adopt Xero.
The Xero interface is trim and displays information that is actually useful, such as bank account balances, how much money your business is owned right now and what bills your business has to pay. You can create new invoices right from the home screen without the need to look for anything. What’s not to love about that?!
Money in/money out is absolutely the most important things for small business operators. It makes a whole lot of sense to make the big deal of these items that they actually are, in Xero.
Xero has spent up big on creating awesome third-party integrations. Integrations can be accessed via settings and simply launching Add-ins. Xero has add-ins for hospitality, manufacturing, education and not for profit organisations. Their point of sale and payment systems are first rate.
Xero’s mobile app is easy to use (I used the Android version). Adding invoices and expenses was very easy. The app uses simple touch ID or a PIN for access and has a familiar, easy feeling about it.
The report capabilities of Xero are really good, if not as impressive as MYOB Essentials. Everything that the vast majority of small businesses need really is right there, like ATO reporting obligations and the usual array of reports that you might want to produce.
Pricing with Xero can be a bit more complicated than MYOB Essentials. There are three main price points are $25, $50 and $60 per month. There isn’t that much difference between the two cheapest price tiers and the number of people on your payroll seems to be the biggest factor in working out your monthly cost. Premium plans (starting at $60 per month) provide payroll for five people. That jumps up to $100 per month at 100 employees. Extra employees cost $2 per month each, which I actually think is still good value.
Both MYOB Essentials and Xero are user-friendly. I’d say that MYOB has the better desktop application. Xero’s mobile app is vastly superior to what MYOB presently has on offer. You’ll need to decide for yourself which third-party applications make life easier for you and your advisors. In my opinion, Xero is a fairly clear winner on the third party integration front.
I think that in terms of pricing, MYOB has a slight advantage over Xero. Really, the $25 per month package that both companies offer is pretty basic. Most businesses will need something more anyway and MYOB is slightly more attractive in that regard. For me, the price difference between the two would not be enough to sway me one way or another. I’m much more interested in the features that each has to offer.
It’s a tough call – but I’m gonna give the title of “Best Small Business Accounting Software” to Xero. The mobile app is huge for business people on the go, like tradies, who make up a large portion of my client base. The better variety of third-party integrations and the great way that Xero has considered business owners, rather than accountants, makes the user experience superior in almost every way.
Let me know your thoughts on the matter.