Xero vs MYOB – What Works Best For Your Business?

Businesses have a lot of choices to make when it comes to accounting software. Of course, Xero and MYOB are two of the most popular options, but which one is right for you?

This post will compare the two programs and help you decide which one is best for your business. Keep in mind that what works well for one business may not be the best option for another, so consider all factors before making a decision.

When it comes to accounting software, there are many different options to choose from. Two of the most popular ones are Xero and MYOB. Both have their pros and cons, so which one is the best for your business? This blog post will break down the differences between Xero and MYOB and help you decide which one is right for you.

Which accounting software is best for your business: Xero or MYOB? In this post, we compare the two programs and help you decide which one is right for you.

Xero is a cloud-based program that makes it easy to track your finances on the go, while MYOB is more traditional software that can be installed on your computer. Let's take a closer look at the pros and cons of each program to help you make the best decision for your business.

Let's get started!

How To Choose The Best Online Accounting Software For Businesses

When it comes to streamlining the processes involved in running your company, adding online accounting software to your toolkit is an absolute must.

We are aware that you frequently wear a number of hats and juggle a number of jobs, one of which is the management of your accounts. You will have a real-time picture of your cash flow and business accounts if you use accounting software that is hosted online. In addition, you will have the added benefit of being able to effortlessly work with your bookkeeper or accountant.

To assist you in making the best decision possible regarding the online accounting software that you will use for your company, the following criteria have been outlined:

• Because you are a mobile and busy handyman, the online accounting software that you use must be completely hosted in the cloud so that you can access it from any location and on any device.

• You should be able to create invoices on the go with the help of an app that is integrated into the accounting system. This should be possible as soon as the work has been finished.

• You should be able to enable daily bank feeds in the accounting system so that it can assist you in keeping track of your finances.

• The programme should be able to integrate with job management tools like Tradify, Fergus, or SimPRO, and it should have the ability to manage timesheets using data from the work management tool.

MYOB

MYOB is the dominant player in the market for accounting software; its influence is so pervasive that even those with backgrounds unrelated to accounting are familiar with the brand. When it comes to its functionality, its dashboard is straightforward and easy to navigate, and with the touch of an arrow, you can view the current balances of all of your bank and credit accounts.

The software makes use of a feature known as "BankLink," which, as the name suggests, makes it possible to integrate bank accounts quickly and easily into and out of the accounting package. This feature is dependable and secure, and it can connect with third-party programmes such as Shoebox, ServiceM8, and Smart job.

ABSS is a provider of simple accounting software solutions for small and medium enterprises. The company was initially founded in Australia in 1991 under the name MYOB. When it was known as MYOB, the company established itself as a digital accounting service whose huge size allowed it to provide cost-effective pricing for an unlimited number of users and transactions.

The scalability of the software, as well as its many platforms and dependable customer service that is available around the clock, are all features that are highly valued by business owners that have aggressive expansion goals for their companies. The most recent iteration of the ABSS software offers customer contact management, the ability to transact in several currencies, and charts of accounts. It was developed with small and medium-sized enterprises in mind.

Keeping track of your clients and suppliers will be simple when you use ABSS, and you'll also have an easier time generating multi-level reports, as well as reports for profit and loss, GST, and balance sheets. On top of its fundamental capabilities in sales, purchasing, and inventory management, the programme also makes ledger listing, billing, and cash position changes more easily accessible.

A-minuses: Keeping track of an inventory and doing double-entry accounting could prove to be particularly difficult for ABSS users. This is especially the case if your company's business procedures are extremely intricate and it has a large number of distinct divisions. Even though the software supports up to 15 users at once, the internet connection typically becomes sluggish when numerous people are using it at the same time.

• If you are using Windows, the installation and registration processes are simple.

• Compared to Xero, MYOB's user interface has a little more antiquated colour scheme and overall appearance, despite its slick and modern design. If you are only interested in the most basic version of MYOB, known as MYOB Essentials, the signup procedure is straightforward after you have chosen your package.

• The installation process is more difficult, however, if you require more complex capabilities in either MYOB Essentials or MYOB AccountRight. In addition, you won't have any access to the MYOB AccountRight software if you utilise a Mac operating system.

• The ease of use over the long term is acceptable.

• When compared to the Xero team, the user experience and web design team behind MYOB does not share the same enthusiasm for minimalism. Because of this, the Click-through options are not as obvious as those in Xero, and it is much simpler to become disoriented while searching for a certain feature.

• Full app integration

• The MYOB app is accessible for both iOS and Android, but all platforms share the same user experience problems. For instance, the app is not as easy to navigate as it should be, nor is the process of clicking through.

• Full phone support

• The phone help offered by MYOB is excellent for customers who would rather speak to a "human person" in times when technology appears to let them down. Their assistance is available twenty-four hours a day, seven days a week, and their support crew will wait patiently on the phone with you as you debug your software using their real-time advice.

• Support and training videos available online

• MYOB has a large number of troubleshooting videos and online help materials that are easy to understand, despite the fact that they are not quite as streamlined and simple as Xero's offerings.

Benefits

• Unrestricted business dealings
• Bank fees
• Billing of customers on an unlimited scale
• Supplier billing
• A payroll service for an unlimited number of employees

Drawbacks

• Monitoring of stock levels

We give it high marks for both its overall popularity and its share of the market. The fact that clients are entitled to a high level of help via phone, forums, and library support is another feature that we appreciate. MYOB is an accounting software that excels at serving the needs of established companies that have outgrown the micro-stage.

Xero

Xero, the enthusiastic and sometimes edgier younger sibling of software packages, is quickly gaining ground on the market dominance held by MYOB. This is a cloud-based bundle that comes with tools that are easy to use and can handle an unlimited number of users. Access is also available on mobile devices such as the iPhone and Android.

• Installation and registration are simple processes.

• Xero has a contemporary and sophisticated design and feel, which makes the process of signing up for and installing the software really easy. In addition, each click-through instruction is simple to understand and adhere to, which makes installation a speedy process.

• Very simple and straightforward to utilise over the long term

• After you have created an account with Xero, using the software is fairly simple. Each menu offers straightforward options that drop down, and just like the installation process, the click-through choices are lucid and to the point.

• Full app accessibility

• The Xero accounting app is simple and straightforward to use, and it is accessible for both iOS and Android.

• No phone support

• The area where Xero and MYOB vary the most in terms of help is the fact that Xero does not offer phone support. It can be a very stressful situation if there is no phone help available, especially if you or your bookkeeper have made a mistake that requires immediate care.

• Support by email the following day, in addition to user-generated support forums and videos that are really impressive.

• Xero, on the other hand, continues to impress those users who are accustomed to getting support online. Because of Xero's widespread popularity among business owners of all ages, including millennials and baby boomers, there are now massive amounts of user-generated content on online support forums and on social media.

Xero itself has provided answers to almost all of the most frequently asked support concerns through the use of straightforward online help pages and straightforward cartoon movies with instructions that are easy to understand.

• Additionally, Xero has an outstanding email support team. They will nearly always respond with a solution the following day, and they are always happy to assist you in exploring the various package possibilities they offer, even if your spending limits or requirements change.

Benefits

• Invoicing
• Standard stocktaking
• The process of depreciating fixed assets
• Make and send out the receipts.
• Reports on both the general ledgers and the accounts receivables

Drawbacks

• Keeping tabs on time
• Project management (you will need a Xero to add on)

Xero is effective and simple to use, and it comes equipped with features and tools that are typical for the purpose of making your business records look appealing. However, the actual beauty of this software package lies in the fact that you will require understanding of "Xero" in order to carry out the day-to-day operations of your firm.

First Off, What Solutions Does Each Provider Offer?

1. Cost

Xero provides a single accounting package with three different pricing plans, each of which is based on the amount of transaction volume. This straightforward approach to pricing does make Xero's other features more user-friendly. However, to begin a subscription and get things started. Pricing for Xero's starting option begins at $27.50 per month, increasing up to $60 for its regular package and $75 for its premium package, which includes accounting for several currencies.

With MYOB's Essentials package and its AccountRight package, each of which comes with a variety of options, additional study is required to guarantee that the software is suitable for its intended use. Essentials only have the most fundamental features and are designed to meet the needs of start-ups, sole traders, and small businesses.

It has a starting price of $25, with additional options that cost $35 and $40 per month. On the other hand, although it is a little less expensive than Xero, the feature set is significantly less robust in comparison to Xero. Because of this, we believe that anyone considering MYOB Essentials should instead look into Xero because it provides a solution that is more efficient.

The Accounts Right package is comparable to what Xero provides as their standard offering. It is designed for businesses of a medium size. The most important distinction is that MYOB comes equipped with capability for managing inventories. The base package is priced at $55, and there is an upgraded version available for $90 that supports multiple company accounts. Only one group of accounts can be linked to a single Xero subscription.

AccountsRight operates in a manner that is distinct from that of Xero and Essentials in that it is not cloud-based but rather hosted on a local computer and must be connected to the internet in order to receive updates. Both Xero and Essentials can be accessed through a web browser on any device that can connect to the internet. Each strategy has both benefits and drawbacks depending on how it is implemented.

Xero and Essentials are constantly up to date since they use real-time data that is connected to the internet and because they do not require upgrades. Users are able to operate on their accounts even when they do not have access to the internet because AccountsRight is housed on the users' personal computers. However, anything like this happening in a society where people have access to the internet is quite unusual.

More recently, changes to employer payroll reporting required by the Inland Revenue have meant that a Payroll function has become a strategic component for accounting software packages and a valuable additional stream of revenue for the software providers. This has resulted in the Payroll function becoming an integral part of accounting software.

Payroll processing with Xero incurs an additional fee of $10 per month for one employee and $1 per month for each subsequent employee after that. MYOB AccountsRight, on the other hand, offers a Payroll with AccountsRight bundle for the price of $76 per month for a maximum of 20 employees; any extra blocks of 10 employees result in an additional one-time charge of $150. A comparison of the prices charged by Xero and MYOB will therefore be greatly impacted by the number of employees included in the payroll.

Having said that, the cost is only one factor to take into account. Which software package, then, provides a higher return on investment for a company owner? Continue reading to discover out.

2. Functionality

Each of the aforementioned packages includes bank feeds. Because of this automated feed from the company bank account, the accounting ledger receives a daily list of bank transactions for the purpose of reconciliation.

When Xero first introduced this concept, it was a game-changing innovation. In response, MYOB moved rapidly to acquire BankLink, an independent bank feed service that it could integrate into its accounting products and use to compete with Xero. MYOB now has a comparable bank feed function available, despite the fact that the first connection was not particularly easy.

Xero provides a function for project management that permits work monitoring for one user at a cost of $7 per month in addition to the monthly subscription fee of $10. This function is available to additional users at a cost of $7 each. This functionality is incorporated into the MYOB AccountsRight package and is available to users at no additional cost.

AccountsRight offers a complete inventory management capability, which, for many companies who have goods on hand and use MYOB as their accounting software, can be a big differentiator in favour of using AccountsRight. Xero, on the other hand, has a more restricted inventory function, but it is unable to monitor stock levels. Because of this, its utility in the management of stock can be extremely restricted at times.

Xero has an add-on marketplace for additional functionality, which enables business owners to add integrated third party software to manage a wide variety of services, such as inventory management, human resources, onboarding, customer relationship management, etc. The availability of a huge variety of software add-ons is one of the benefits of using this. The accessible selection of software add-ons is extremely diverse, which is another disadvantage. As a consequence of this, picking the appropriate piece of software can be difficult.

Integration into Xero and the business, for instance, is similar to any other software integration in that it is often more complex and more expensive than what was budgeted for. In order to facilitate the selection process, Xero provides customers with the opportunity to review software through a review service. In general, this is a useful method for gaining insight into the experiences that other companies have had while implementing the software add-on into their operations.

In addition, MYOB now provides a marketplace for add-ons. Due to its late entry into the cloud arena, however, it has a significantly smaller user base than Xero: 300 as opposed to 2,800 and counting. MYOB provides an accreditation service, which certifies that the software will be compatible with MYOB, as a way to assist customers in making their choice.

Neither of these companies offers assistance for software from a third party. When it comes to selecting and putting in place add-ons, the onus of responsibility falls squarely on the shoulders of the buyer. For assistance with this matter, we suggest that proprietors of businesses see their accountants for guidance.

3. Reporting and Accessibility

Both Xero and MYOB, as one would anticipate, provide access to a comprehensive set of report options. MYOB, on the other hand, has been around for a lot longer than Xero and hence has a greater variety of report options.

On the other hand, Xero offers functionality for report customization, which enables users to modify reports on the fly so that they better suit their requirements. Additionally, the add-on marketplace gives users access to a variety of reporting packages, all of which can generate more advanced reports.

At this point in time, we spend more time on our mobile phones than we do on our personal computers. As a result, a fully operational mobile application is an essential component of the offering. Xero offers a mobile app that can be downloaded for use on either an iPhone or an Android device. This makes it possible to create expense claims, track debtors, and issue invoices while on the move. It also makes it possible to track sales revenue.

MYOB also provides an app that can be used for tracking debtors and sending invoices to them. Regrettably, it does not support bank reconciliations like the Xero app does, which is a useful task to complete whenever there is some spare time.

Nevertheless, it does provide a BNZ Payslip device that enables the processing of EFTPOS and credit cards, albeit for a fee that is very high, with a charge per transaction of 2.85% and a monthly fee of $30. This fee structure makes the BNZ Payslip device a relatively pricey option.

If you want to be able to process mobile payments, then you should go with MYOB. This is another example of how different situations call for different solutions.

4. Support

It is absolutely necessary to have timely support that enables you to continue doing what you are doing.

Both MYOB and Xero provide exhaustive database-driven support for solving questions, with the option to move on to person assistance if necessary. In the case of Xero, this is provided in the form of email with a response time of 24 hours, whereas MYOB provides phone-based help that enables the resolution of questions more quickly.

However, the wait periods on the phone can be unpleasant; in some instances, they can last for as long as thirty minutes, as I found out when I called MYOB not too long ago. Even more frustrating is the staff's lack of expertise regarding the things they sell, as evidenced by their provision of inaccurate advice.

5. Invoicing

Because generating, keeping track of, and aggregating invoices is an essential element of accounting for your small business, the software you use should provide the simplest and most efficient means possible to carry out these processes.

Xero gives you the ability to personalise the invoice templates that you use and to monitor when recipients open invoices. It will also be possible for the majority of recipients to pay invoices instantly by clicking on the "Pay now" option that will be located at the bottom of the invoice that you send. This will assist encourage clients to pay fast, which will increase your cash flow.

MYOB is capable of performing the same tasks as Xero. MYOB AccountRight is the only software that offers customization, and even then, your options are more restricted with that software. Even while the colour scheme isn't quite as cutting edge as Xero's, the standard invoice templates that come with MYOB have a clean and sophisticated look.

6. Amount of business accounts

Xero permits its users to have one corporate account for each subscription they purchase. Within this account, you are able to have numerous administrators, and your staff members are able to have individual logins so that they may input their timesheets when necessary. If you have more than one employee, you will need to upgrade to the Premium plan because the Starter and Standard plans only include payroll capabilities for a single employee each.

If you subscribe to the MYOB AccountRight Premier package, MYOB gives you the ability to maintain two separate company accounts. You also have the ability to have several logins for employees and administrators. If you choose a package higher than the Starter level, MYOB also gives you the ability to have an infinite number of employees on your payroll.

Diverse Methods of Innovation

We are all aware of the effect that artificial intelligence and business intelligence will have on the market. Xero has been able to ride this wave of success because to its long-term vision, as well as its solid reputation for innovation and machine learning.

The fact that we spend twice as much on research and development and marketing than MYOB is evidence of this. Xero was also one of the earliest firms that focused only on cloud-based company software. In spite of the fact that MYOB was the first company to enter the market, they have only just lately started offering an AI advisory service.

In addition, in contrast to MYOB's limited exposure, Xero has taken its place on the world stage, with thirty percent of its revenue coming from other countries at this point.

Unfortunately, MYOB has almost completely been supplanted by the traditional image of accounting. Because it lacked a clear vision and moved slowly when it came to innovation, it fell behind Xero's technology driven rate of growth. To understand what most people consider to be the superior product, you need look no further than the fact that Xero is currently adding almost four times more net customers every six months.

Which is overall superior? MYOB vs. Xero

Xero is more user-friendly, is compatible with a wider range of devices, and is an all-around more contemporary choice that keeps up with the latest technical developments, such as the ability to integrate with additional applications and software.

The ownership and operation of a small business may be an extremely isolating and demanding endeavour. The Xero Gravity podcast and the Xero blog are two examples of the meaningful methods that Xero has zeroed in on to keep you engaged. MYOB also provides its users with a podcast and a blog; but, similar to the system itself, these features are not quite as cutting edge or inspiring as those provided by Xero.

When deciding between Xero and MYOB, one thing to keep in mind

It is true that Xero is the most popular accounting software, but if your accountant is experienced with MYOB, it is best to use the programme that they recommend. Your bookkeeping will be made easier as a result, and any problems will be brought to the attention of your professional accountant sooner.

There are a lot of great accounting firms out there, and many of them will choose to partner with one of these software brands. The exceptional accounting firms will have achieved Silver or Gold status, which indicates that they have a lot of experience assisting small businesses with using the software.

If you are still unclear about which accounting software options are ideal, a good accountant will be able to point you in the right direction and help you choose one.

Conclusion

Before making any decision about software, it is critical to first conduct a needs assessment and then investigate available options to see which ones provide the best match with those requirements. According to my own observations, Xero has been at the forefront of technological advancements within the realm of accounting software, whereas MYOB has been playing a game of catch-up since Xero was introduced to the market.

Xero is a cloud-based accounting software company that started from scratch to design a product that is user-friendly and is always being improved. The user is not required to do anything in order for the upgrade to the programme to take effect; it is a completely seamless process.

MYOB made an effort to retain its current customer base while simultaneously migrating them to a cloud-based platform. Nevertheless, there are problems with this strategy. Due to the fact that AccountsRight must be hosted on a PC, users of MYOB products are unable to take use of the numerous benefits offered by cloud-based technologies.

As a result, we always advise our customers to use Xero, and we employ the software as the foundation for our Virtual Finance Team and Virtual CFO services. MYOB is, nevertheless, going to be a good fit for certain organisations, particularly those that need to keep track of their inventory.

In conclusion, it is essential to give serious consideration to which accounting software is appropriate for your company before making a purchase.