Westcourt

Xero v MYOB – which is the better accounting software for you?

The advent of cloud accounting has changed the face of bookkeeping and accounting for small businesses across Perth and the broader Western Australian region. And a common question for a start-up business is – should I start off with Xero or MYOB?

And for those start-up owners who don’t like reading – our endgame answer is that Xero will work better. And if your business is established and growing the answer is not so clear cut – so read on.

How Xero started out

Xero originated from New Zealand and it was the first significant mover with cloud accounting. The move to engage cloud accounting and automate routine tasks changed the bookkeeping and accounting landscape for small and medium sized businesses.

The motor of Xero – “beautiful accounting software” – also changed the perspective of accounting. It clearly made an effort at making the process easier and more enjoyable for the user.

How MYOB started out

MYOB was the same type of innovator to accounting software that Xero was – except that is started in the 1980’s. The software has focused on expanding and improving the power and depth of of its software for increasingly complex businesses.

The origin of MYOB – a hard-drive desktop platform – has created difficulties in transitioning to a 100% cloud platform with customer resistance. However the business now has a semi-cloud version (MYOB AccountRight) that works relatively well and a 100% cloud version (MYOB Essentials).

Head-to-Head Comparison

If you want to compare Xero to MYOB you actually have it compare it to the two separate versions of MYOB – essentials and AccountRight.

As a practice we actively discourage anybody from using MYOB Essentials. The Essentials program does not allow for a balance sheet to be produced with comparative numbers – and this is really a not negotiable when engaging with a bank, tax agent or business advisor. MYOB Essentials is ideal for a business that does not produce financial reports – just a listing of receipts and payments.

Xero

AccountRight

Winner

Starter cost

$27 per month

$60 per month

Xero – simply because of the lower starting price.

 

Hardware needs

Apple, Mac and Windows

Windows only

Xero – the restriction of MYOB for a desktop version only makes it difficult for some operators to engage with the software.

 

Inventory

Basic inventory – you will need to engage a third party inventory provider that connects to Xero

Advanced inventory

MYOB – however  a word on inventory – you must invest in your people to get it to work or it is a total waste of time.

 

Large data capacity

Xero becomes very slow with large transactions.

MYOB can handle large transactions.

MYOB – Xero is not equipped for large volume businesses.

 

Ease of use

Deeply intuitive

Functionally works

Xero – it is simple

 

Tailored for use

Xero has a massive range of third party software apps for a specific problem

MYOB has deep capacity for tailoring to a specific purpose

Xero – for small for medium sized business. 

 

MYOB – for medium to larger businesses.  As the business is medium to larger sized running multiple third party providers can become clunky and often the “seamless” data integration does not work.

 

End of Year Tasks

No additional action needed.

You need to “roll” your data and close off the year.

Xero – rolling data and purging transactions is difficult.

 

Fixed assets register

Xero contains a basic fixed assets register.

 

No

Xero

Payroll

Basic payroll provided – more  complex payroll needs add-on programs like KeyPay.

 

Good payroll provided with no limitations on employees.

MYOB

Foreign currency

Supported

Not supported

Xero

Overall verdict

 

 

Xero

As accountants our most difficult process is getting the owners and directors to look at the accounting reports. And typically the reason is that the accounting reports are so difficult to understand and visually unappealing that they are ignored.

Xero changed that. So for that reason alone – presentation – we will almost always always recommend Xero over MYOB. Because if your financial data is simply never looked at by anybody – it is useless.

As a business grows the importance of the numbers grow. And accounting reports go from a basic general ledger to a full business system covering HR, sales, CRM and purchase orders. And if the data is important there can easily be situations where MYOB is a better program.  Xero covers off on this area by linking to third party software providers to fill in the wholes but eventually it is a software program for small to medium sized businesses. 

If your business grows you will need to go beyond Xero to programs like MYOB Exonnet, SAP, Oracle, Microsoft Navision, Sybiz and Sage. And MYOB AccountRight might be the solutions to your business when you get to that level so it will be better than Xero.

So for this reason we, as a practice, are not insisting on Xero only. In fact our 5 largest customers have a full ERP that simply could not sit within the Xero platform.  And for those complex businesses we are open and will work with them knowing that one size never fits all.

And for the business owner with an emerging small to medium sized business – we recommend Xero. We have never had a client move from MYOB to Xero and then be unhappy with the end outcome.

We are committed to Xero.  As part of our induction program – even for experienced team members – is for them to become a Xero certified advisor – and when you consider our knowledge of Xero add-ons like Stripe, Practice Ignition, WorkFlow Max, Calxa, Futrli, KeyPay, Hubdocs and Simpro – Westcourt is the ideal business to get your Xero file working properly – call us on how we can help.

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