It's fair to say that accounting software has come a long way over the last 30 years. The arrival of the internet quickly made old-school ledgers and the paper-based accounting system obsolete, and accounting methodologies graduated from Excel spreadsheets to cloud-based solutions. While there is still a need for hard copies of certain documents, the majority are now stored more accessibly and safely in the cloud.
Creating a cloud accounting space allows you to access your data anytime you need it without storing that information on a physical hard drive. It also offers bank-level encryption for sensitive data. Moving to the cloud makes sense for most businesses, but it's important to understand that not all cloud-based accounting solutions have the same standards and features.
The two big players for Australian small business accountants are Xero and MYOB. Both platforms offer easy and effective ways to manage accounting, payroll, bank reconciliation, human resources, and order and inventory management. So, what’s better — MYOB or Xero?
The best to settle the debate is to pit them against each other. Liston Newton’s accounting experts have weighed the pros and cons of MYOB and Xero. With our guide, you can confidently choose the right accounting software for your business.
We can talk you through how cloud-based accounting software applications can benefit your small to medium business. Get in touch with us today.
Xero and MYOB: Meet the competing accounting challengers
MYOB, the established powerhouse
MYOB has been around for decades — since the early 1980s, in fact. MYOB was the dominant player in computer-based accounting software for Australian small businesses before the introduction of cloud-based accounting solutions.
To keep up with Xero and other competitors, MYOB recently released its own cloud-based accounting packages, including MYOB Essentials and MYOB AccountRight.
While MYOB's cloud-baed products offer a similar range of features to Xero, there is a sense that it is always playing catch-up as Xero was the first innovator in the online cloud accounting space.
The MYOB promise reflects its brand repositioning efforts: 'simplify success'.
Xero, the innovative challenger
New Zealand tech entrepreneur Rod Drury founded Xero in 2006. He felt that traditional desktop accounting software had become outdated and decided to create a modern cloud-based solution.
As a dedicated cloud-based accounting software company for small and medium-sized businesses, Xero has since dwarfed MYOB’s market share, almost doubling its subscriber base in the space of 10 years.
Xero was also funded uniquely. It was a public company from day one, and its share price on New Zealand's stock exchange has risen from $NZ1 on debut to around $NZ34 today.
The Xero promise is simple: 'beautiful accounting software'.
The advantages and disadvantages of MYOB and Xero
When it comes to the Xero vs MYOB debate, it's important to stress that there are no right or wrong decisions. Whatever software you choose, rest assured that they are both powerful and responsive solutions that will streamline and simplify your accounting processes.
Xero vs MYOB: Comparison chart of features
The key differences between MYOB and Xero
MYOB vs Xero pricing
Xero’s prices versus MYOB Essentials’ prices are quite evenly matched. However, MYOB AccountRight’s prices climb steeply. Ultimately, Xero’s pricing structure is significantly more straightforward than MYOB’s. Small and medium-sized businesses will appreciate this particular advantage.
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.
MYOB has the advantage over Xero for providing payroll. Both the MYOB Essentials Premier plan and MYOB AccountRight offer unlimited payroll, which Xero does not.
Invoicing and inventory
Xero’s customisation capabilities make it better suited to invoicing and inventory management than MYOB.
EOFY data rollover
Xero and MYOB Essentials are evenly matched as both offer continuous data. However, MYOB AccountRight offers two rollover functions, which can complicate the process.
Online & phone support
Xero’s vast resources, massive online community and straightforward product make it easy to find support for basically any issue. MYOB offers similar online support, but not to the same level.
MYOB’s advantage over Xero lies in its all-week phone support. Xero does not offer phone support at all.
3 considerations for picking MYOB or Xero for small business
- If you're going to trust your financial data to the cloud, you need to know it's safe. Xero's access control is superior to MYOB's, as it offers multi-factor authentication options. Xero is certified in Payment Card Industry (PCI), Data Security Standards (DSS) and SOC 2, while MYOB is not.
- Third-party app integration is vital for optimising your processes. Xero can integrate over 400 third-party applications so that you can easily create bespoke account solutions for your small business. MYOB is restricted to the smaller pool of Windows-compatible software.
- 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’s needs best and may feel more proficient and productive with one choice over the other.
Book a free financial strategy session
Xero will transform your business, and we will guide you through it.
- Get a better understanding of your needs
- We generate a detailed report from your strategy session
- Understand your priorities and next steps
MYOB vs Xero: the clear conclusion
Xero is the clear winner in the Australian market for cloud-based accounting software. Because it was designed from the ground up, Xero is simple, elegant, and intuitive for a small to medium-sized business. MYOB is catching up and offers a similar range of features to Xero, but it cannot quite offer the same polished, uncomplicated user experience.
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 time. We are not only a Xero partner firm but have attained Xero Platinum Status. 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.