Picking an online accounting software: Xero vs MYOB
Looking for an accounting software that fulfils everything your business needs? It’s no secret that these online solutions can help boost the operation and growth of businesses, letting you focus on what’s important. Navigating the different options available can be tough, but if you’re here you’ve no doubt heard of the two big players: Xero and MYOB. We look into each offering below, letting you choose which one best fits your business needs.
Xero is a New Zealand company founded in 2006, and has grown rapidly ever since as one of the most recognised accounting software providers in many other countries. It was pitched from the start as a cloud-based service, allowing access from anywhere as well as in real-time; this distinguishing feature at launch has formed the backbone of its product, and the secret behind Xero’s success.
There is only one accounting package offered by Xero, its namesake platform, which is offered entirely online in web browser format on any compatible devices, as well as on mobile/tablet through an app. The platform itself offer features from automatic GST returns to inventory management, providing a wealth of capability for various occasions. The full list of features can be found here.
Xero comes in three different subscription plans, where access to the software is charged monthly. These plans offer increasing amounts of features as well as capability, catering to different sized businesses or business types. For most small businesses, the standard plan will be enough, capturing most of Xero’s core functions such as invoicing and quoting, bill logging, bank transaction reconciliation, expenses, and receipt management. The “starter” plan is more suited towards freelancers or individual traders, with limited billing/invoicing amounts as well as lack of expense claiming, whereas the “premium” plan is designed for large or established businesses, offering additional features such as multiple currency usage.
MYOB, on the other hand, is an Australian company founded much earlier in 1991 with a long-standing position in the global market for accounting software services. Initially providing accounting software in the format of local programs bought with a one-off purchase, Xero’s innovative subscription business model and cloud-service have spurred MYOB to follow suit. Today, MYOB offers a range of different online software packages aimed at various sized businesses, with many also retaining the physical software aspect for offline work.
Examples of online accounting packages offered by MYOB include AccountRight and Essentials, which can be bundled with many other individual packages such as payroll software or ERP software. MYOB Essentials is the more basic of the two, a web browser based product very similar to Xero which includes mobile app access as well. It allows you to track and manage cash flow, jobs, as well as the standard automatic invoice and quote functionality. The more powerful AccountRight product is desktop computer based, for Windows operating systems only. It is physically installed onto devices, a local software with the backend of the software all connected to the cloud, meaning that all data is hosted both physically as well as online. AccountRight offers a more fleshed out software package, with additional features such as budgeting, customer/supply management, and inventory management to name a few. A breakdown of features and comparison between Essentials and AccountRight can be found here.
Unique Advantages and Disadvantages
MYOB AccountRight offers an advantage in its blend of offline and cloud service meaning you can work locally on your device at anytime, anywhere, without the need for an internet connection. All data and changes are updated to the cloud in real-time as soon as you connect to the internet bringing the flexibility and efficiency of both offline and online work. However, its exclusivity to windows-based devices can be a deal breaker for some while also the purely digital MYOB Essentials alternative is limited in some functionality.
Server location is also important when it comes to connection stability and security. MYOB hosts their servers much closer in Australia, whereas Xero servers are in the USA, much further offshore.
For businesses looking to have a digital upgrade or wanting to do more, MYOB’s various other standalone products (such as payroll) synergise well together to make managing your business much easier.
On the other side, a major advantage of Xero is the easy-to-use software and packaging. Since Xero only provides one software product, having different plans with different offerings and functions available, just on its own is enough for all your accounting needs.
Also, Xero offers a larger range of software products aimed at professional accountants and bookkeepers, which integrates well with its single accounting platform. This means better communication on financial matters between your team and other accounting professionals. Additionally, asset management and depreciation schedules are other unique features from Xero that can be valuable to some businesses.
Price and Feature Comparison
Xero’s three plans are Starter ($27.5), Standard ($60) and Premium ($70), with all prices excluding GST and on a per month basis. Optional add-on features can also be selectively chosen to help personalise a plan, such as payroll ($10) and project tracking ($10).
MYOB also offers three different plans for Essentials and AccountRight; Essentials comes in Accounting Starter ($25), Accounting ($40), and Accounting + Payroll ($60), whereas Essentials comes in Standard ($55), Plus ($78), and Premier ($100). These prices are all charged on a monthly basis as well.
It is difficult to make direct comparisons based off of price as this is subjective to the needs of your business, but across the board Xero offers more features at a lower price. For example, when considering multi-currency functionality, Xero offers this at $70 whereas you need to pay $100 for the same feature in MYOB's AccountRight. Additionally, Xero allows for more flexibility in their plan, which can help bring costs down if only one feature in a higher plan is required.
For freelancers or small businesses who are looking for basic invoicing and quoting services, MYOB Essentials Accounting Starter plan offers a greater quantity per month for a lower price as well as job tracking compared against Xero Starter. However, this does not include bank transaction reconciliation or document collection/management functionalities which Xero Starter has.
If you are looking for a comprehensive accounting package without payroll features, Xero Premium edges a win over MYOB AccountRight Plus, offering a more diversified range of functions that cover almost every need at a slightly lower price.
Ultimately, no accounting package is objectively better than the other, as many features bundled in different plans may not be as useful to you as to another. However, Xero stands out for its wealth of features, coupled with its cloud compatibility available on almost all electronic devices. With internet connection becoming more available and highly stable, the lack of offline capability is only a small drawback for most businesses. Xero and its ethos of simplicity provides better value and functionality across the higher ranges, but MYOB offers many more different packages which can be more suitable for specific situations.
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