Xero vs. QuickBooks vs. MYOB – Which One To Choose?

If you're a small business owner, you've probably heard of all the different options for accounting software: Xero, QuickBooks, and MYOB. But which one should you choose? In this post, we'll compare and contrast these three options to help you decide which one is best for your business.

Remember that this is not an exhaustive list - there are other accounting software programs out there, and each one may be better or worse suited for your specific needs. So do your research and choose the program that fits your unique situation best!

It's no secret that small business owners have a lot of decisions to make when it comes to choosing the right accounting software. Xero, QuickBooks, and MYOB are popular options, but which one is right for you? In this post, we'll break down the pros and cons of each program so that you can make an informed decision. Remember that this comparison is based on our experience with the programs, and your needs may vary.

If you're a small business owner, then you know that bookkeeping and accounting can be time-consuming and complicated tasks. And if you're not sure which software to choose for your business, you're not alone!

This blog post will compare three of the most popular options: Xero, QuickBooks, and MYOB. We'll outline the pros and cons of each software so that you can make an informed decision about which one is right for you.

Let's get started!

A concise look at the benefits and drawbacks of using cloud accounting

Moving your company's accounting operations to the cloud might not be the best move for your company. The advantages and disadvantages can be summarised as follows, more or less:

• Con: If you come from a "large" ERP like Dynamics or Sage ERP, you will lose some of the key capabilities of the new system (but do you actually use this functionality?)
• Data security concerns are constantly evolving; although some hazards have decreased significantly, others have emerged.
• Con: If you decide to cancel your subscription, you will be required to export all of your data and then import it elsewhere.
• Cloud software is easier to use, which means more people will use it correctly, and new employees will get up to speed with the company more quickly.
• Cloud software is easy to own because there is no need for a server and there are no updates.
• Cloud software is where the majority of the significant SME innovation in technology takes place, which is a pro. It can be done anywhere, on any continent, and at a low cost.

Only the first of these is an obvious step in the wrong direction. The cloud accounting packages nearly never include tools for enterprise resource planning or inventory management. They instead provide integrations to cloud-based ERP systems. This indicates that you will observe significant gaps between a traditional ERP and Xero; but, when you include a cloud ERP in the equation, the gaps get less. That is not going to be covered in this post at all.

Manifestations Of Your Readiness For Cloud-Based Accounting

• You have outgrown a basic accounting software programme due to the amount of transactions, the scale of your business, or the requirements of your customers.
• You require seamless connectivity with several sales channels, including B2B, online, and retail sales.
• Either an expensive update to the server itself, or an expensive upgrade to a newer version of the programme, awaits you.
• Either you have a workforce that is more mobile and dispersed than it once was or you want to use people from other countries.
• You want access to modern tools such as customer relationship management systems and analytics.

Pure cloud applications are simple to integrate, which enables cloud products to focus on a more limited set of capabilities and perform those capabilities exceptionally well. For instance, the most popular cloud programmes concentrate on bookkeeping, bank reconciliation, essential financial functions, and payroll management. As a direct consequence of this development, contemporary cloud-based accounting software no longer attempts to be a "Jack of all trades."

Xero

At least in Australia and New Zealand, Xero has become the most popular cloud-based accounting solution for small and medium-sized businesses. Xero is a genuine disruptor. Xero came out on the market after Saasu did. Xero seems to have a good chance of success because the company has an excellent grasp of both the market it operates in and the features that cloud-based software ought to provide. It has continued to see amazing growth in its user base, and there has been a significant amount of product development. It is the iOS of the cloud accounting business, and almost every third party product integrates with Xero first. Xero is the market leader.

Xero is an excellent piece of accounting software. The level of localisation that the Australians achieve is unparalleled. It offers a first-rate API that has been put through extensive testing. There is a significant amount of support from the community, in addition to the successful promotion of a certification programme that helps bookkeepers improve their skills. Continuous progress is being made in terms of functionality. Xero has received nothing but positive feedback from our customers, and I always encourage using it.

QuickBooks Online is our primary adversary in this market (QBO). The characteristics that set Xero apart from QBO include a stronger API, better report creation, and better CSV import capabilities. Xero also has a ledger for fixed assets. Additionally, Xero differentiates itself in Australia and New Zealand by providing superior payroll, bank integrations, and a far larger market share.

Xero ultimately added inventory in March 2015, which allowed the company to solve one of its most pressing issues. However, it is only a standard module from the stock. Therefore, Xero defers to other cloud players for more complex requirements. These players use Xero's application programming interface (API) to readily integrate. This gives you access to some very potent ERP and supply chain systems in the cloud.

There are cloud providers who offer inventory management systems that come close to matching the capabilities of respected ERPs that cost more than fifty thousand dollars to licence. These programmes offer multi-location inventory management, as well as sophisticated sales order and buy order processing systems. Integration with online stores "out of the box" is enabled, of course, making it easy to use platforms like Shopify.

Note that QuickBooks Online can also integrate with some complex cloud supply chain packages, although Xero offers a greater variety of integration options (although there is no longer. There are some remarks on integration, but if you require any additional information, please get in touch with GrowthPath.

In terms of the fundamental capabilities of an accounting package, Xero has distinguished itself as the leader. In comparison to the older MYOB desktop software, there are still certain deficiencies, however there have been improvements (Fixed Assets, much better bank feeds, much better payroll, auto-reversing journals, segments).

Although this is a subjective assessment, it is safe to say that extending Xero's capabilities is easier than with any of its competitors, and the company's rate of development is the fastest. The application programming interface (API) of no other package is superior, and the majority of developers prefer Xero.

I believe that Xero's payroll, basic reporting, and GST capability will satisfy the needs of the vast majority of medium-sized enterprises. However, a knowledge of bookkeeping is necessary in order to use Xero, just as it is with QuickBooks, AccountRight, and Saasu. MYOB Essentials simplifies interface options while simultaneously reducing the amount of functionality available to one-person operations.

Bookkeepers should know that Xero allows auto-reversing journals, which is a lovely addition that will be greatly appreciated by people who use accruals to generate strong profit figures each month. This feature is not available in MYOB or Saasu; nevertheless, it is available in various versions of QuickBooks but not in the cloud-based versions.

Xero provides tracking categories that can help you segment different aspects of your organisation. This is a really useful characteristic. Sub-accounts are another name for tracking categories in more conventional accounting software. You are permitted to have up to three different reporting dimensions in the chart of accounts (e.g. a P&L or Balance Sheet by profit centre and cost centre). When mapped by a module such as a supply chain system, this becomes a very useful piece of information. Please, TradeGecko, do the following.

When integrated into a workflow that takes place in the cloud, Xero excels. It has a significant advantage over its rivals in this regard. For example, the export of reports into Google Drive is a built-in feature. The majority of documents allow for the attachment of pictures and notes. Saasu has recently made some progress in this area, and it is getting increasingly sophisticated in its use of tags.

Unfortunately, Xero only offers limited support in the event that you encounter problems. Xero requires that you have support from your bookkeeper or accountant in order to function properly. At the very least, there is a large quantity of assistance available online. In practise, customers become proficient in Xero quite fast and are able to use it without assistance.

There is a lot of confusion surrounding Xero's transaction restrictions due to the fact that the internet never forgets. Since the company was afraid to overcommit, the controversial "1000 transactions a month" restriction was established. This remark is at least five years old at this point. Xero has been around for a while. Over the course of this time period, Xero's backend resources have significantly expanded.

The issue, however, is that Xero will not commit to anything that is greater than this previous limit, and there is no reliable method for sizing up in advance. Transactions are not particularly clearly defined; for example, is it a line on a bank statement, an invoicing line, an invoice, or something else entirely? Xero is ambiguous. As with Captain Barbosa, these are now more "guidelines" than actual rules, and Xero support encourages users who are having issues to get in touch with them.

It is obvious from the conversations that have taken place in the forum that performance will deteriorate at some point. This point can be readily reached if Xero is utilised as a retail POS, which can produce a large number of customers and invoices. Because of this, you should only look at the consolidated numbers when using Xero as a back end for medium-sized firms.

If you use a cloud point-of-sale system like Kounta, this is handled automatically through the integration with Xero. If the integration that you employ does not perform this function, one solution that may be available to you is to combine transactions once they have been imported into Xero.

Consolidation, on the other hand, is not a good choice for open documents, such as unpaid invoices; hence, consolidation is an option for retailers, but not for complex wholesalers.

GrowthPath undertakes stress testing in order to provide some degree of clarity to this situation (as well as comfort for our clients). The following page contains some of the generic Xero stress test results published by GrowthPath. If you use the "1000 transactions" guideline as your benchmark, the results of our testing show that Xero performs better than you might have anticipated.

The cloud accounting app that wins the "gold medal" is called Xero. Nevertheless, other things, like the precise reporting of GST, can move more slowly when huge transactions are involved.

MYOB Essentials (formerly MYOB LiveAccounts)

MYOB Essentials is the company's second iteration of its cloud-based bookkeeping software and represents a relaunch of the product. It maintains the straightforward nature of the previous LiveAccounts while providing a solid API. MYOB was hampered by the fact that it was slow to enter the market, which cost it years of revenue.

MYOB itself, on the other hand, seems to be resourcing integration with some well-known cloud packages, and the utilisation of a web-based API makes the process of constructing your connection simple (or cheap).

• MYOB Essentials has excellent customer service, with the subscription price including access to highly helpful live support.
• It is a genuine double-entry accounting system that receives genuine live feeds from bank accounts; however, it does not contain a perpetual inventory component.
• It is not difficult because it is a straightforward method of accounting. Therefore, it doesn't take long to get started.
• MYOB Essentials lacks important functionality in several key areas. For instance, there is no inventory, no support for multiple payment periods, and not even the most fundamental task pricing is available. Nevertheless, at least it has payroll at this point.
• The reporting is the foundation. Almost no assistance with cash flow forecasting is provided. Virtually no export to Excel.
• The similarities between LiveAccounts and MYOB are striking. The chart of accounts that is used by default always uses the same numbers. The BAS report is very similar to the BAS Link report.

MYOB Essentials is a significant upgrade from MYOB LiveAccounts; yet, the company does not anticipate that it would appeal to "bigger organisations," which it defines as having an annual revenue of more than $3 million. Instead, MYOB directs customers to a hybrid web version of their traditional MYOB product, which is called AccountRight. From there, the company sells MYOB Exo, a traditional (and not very remarkable) enterprise resource planning programme. MYOB is making slow but steady progress in adapting to the new reality; it will be interesting to observe what happens to the company's market share.

MYOB AccountRight (Previously AccountRight Live)

It is now official that MYOB has changed its name. During a lengthy period of transition, MYOB's most popular product was AccountRight Live; however, the product is now referred to by its original name, which is just AccountRight.

AccountRight Premier, the flagship product of MYOB, is used by a significant portion of the company's clientele. It is a technical dinosaur because it is sluggish, prone to crashing, and does not have a server backend; the maximum amount of data it can save is three years; and the user interface has not changed significantly over the years. On the other hand, the latest version of MYOB features an improved user interface look.

The new system is not based on the cloud; in order to utilise it, you will need an application that is compatible only with Windows. Frankly speaking, the performance when the data is being run in the cloud is almost as bad as it gets. This is not typical of cloud software; rather, it is a result of the engineering concessions that were made by MYOB. This is what's known as a "hybrid" product in the industry.

MYOB offers two cloud solutions: MYOB Essentials, which is aimed at the more entry-level customers of MYOB, and AccountRight, which is the only hybrid product currently available on the market (Live). The ability to store data on the cloud while retaining hybrid functionality enables convenient remote access.

Even if the data is being accessed "in the cloud," AccountRight (Live) can only be utilised on Windows computers. This is in contrast to the typical browser software that is used to gain access to cloud-based applications. Therefore, you still need Windows and all that comes along with it. There is no access to Mac OS X, Chromebook, Linux, iOS, or Android.

Despite sharing a familiar name, AccountRight (Live) and its predecessor, the legacy edition, are not the same. The most recent pricing options include higher-end plans that provide stock and payroll; the functionality may not be exactly the same as that of AccountRight Premier, but it's close (on the more expensive plans). At long last, it supports multiple currencies.

It has a less robust inventory module, which cannot be directly compared to other systems. It does not support the ODBC driver, which is unfortunate for companies who utilise add-on software for MYOB; however, it does have an API. AccountRight Live cannot be accessed without first having AccountRight installed on a Windows-based computer. It can function in any of two modes. Users can access a MYOB file that is stored in the cloud while the programme is in "cloud" mode. In this mode, it is not possible for anyone to use the local data.

As long as your MYOB data file is compatible with the new version, the upgrade to the new version will be performed automatically and at no additional cost to you.

When someone wishes to utilise the system offline while it is being run in cloud mode, the system transitions into single-user mode. Access to the cloud is now limited to reading only. Because of this, you will need to have a connection to the internet in order to work offline (otherwise, the cloud file won't know that a user wants to check out the file in order to work offline).

MYOB issues a warning that the cloud mode could be slower than the "fast" desktop version, and the desktop version itself is not particularly quick to begin with. It is important to keep in mind that this also implies that you will need to regain access to the internet in order to unlock the cloud file and allow other users to update MYOB.

It appears that the API has been finished; this new layer will be placed on top of the existing product (it seems). However, feedback from users who already have access to the API suggests that its performance is around one hundred times slower than anticipated.

Note that while there is limited support for integrating cloud apps with AccountRight Live, in most cases, this will only work if you choose to store your data in the cloud (OneSaas, for example, has some integrations with AccountRight Live, but they only work when using cloud data mode). However, the cloud solution is very slow.

When operating in the local mode, cloud integrations would necessitate the installation of some rather complex software on a server within your network; however, developers are unlikely to include this feature due to the high cost of providing support for it.

Therefore, at this point in time, it is quite difficult to endorse MYOB AccountRight (Live). In cloud mode, it is quite difficult to operate, which means that it has all of the shortcomings of the legacy product, including the performance problems that arise when there are more than a few users. You need to use Windows, and it offers very limited capabilities for integration. It's starting to look like an option that leads nowhere. In most cases, though, it is a straightforward transition from older versions of MYOB.

One advantage, viewed from the perspective of the user, helps to compensate for the fact that there is not yet a genuine cloud solution:

• When you cancel your subscription, having offline access to your data can be seen as a very simple way to take your data with you, despite the fact that this will prevent other cloud users from using the data.

MYOB's other products

MYOB offers a variety of other goods. For a number of years, the company's approach for growing enterprises was to transition them to new solutions, such as the classic enterprise resource planning system MYOB EXO. My opinion is that it does not function very effectively, and Exo is not something I support in general. MYOB has introduced a new product, MYOB Advanced, a cloud ERP that bundles the typical ERP applications for larger enterprises (such as a CRM).

At this point, I have a limited understanding of it: It is a locally adapted version of Acumatica, which appears to be a good product for the niche market of larger enterprises. However, the localisation was not finished as of the middle of 2015; when I checked it most recently, it was still lacking bank feeds and Australian payroll. It is a serious, complicated, and pricey tool designed for companies that must fulfil more difficult legal and business control requirements.

It is also supplied through a very traditional "middle-man" sales channel, with expensive implementation services and hefty recurring payments; as a result, it is weighted towards the monolithic model, which is where you buy lots of packaged capability.

The promise of solutions built on an open API stands in stark contrast to this: with these products, you develop your business by incorporating new features, not by switching platforms. You now have the opportunity to select the CRM that is most suitable for your sector.

It is interesting to note that very few manufacturers seek to bundle online stores anymore because the stand-alone products suddenly became substantially more advantageous. In my perspective, this holds true for a number of other modules as well.

Quickbooks Online

The licencing model is dependent on the number of simultaneous users, which is an improvement over its previous per-user model but is still inferior to the models used by Xero and Saasu. There are three different price options, with the first year typically being offered at a significant discount. Quickbooks is a well-designed programme that, in terms of capability, is comparable to that of Xero and Saasu (the most expensive version of Quickbooks does, at least, include a stock module).

Importing data from a desktop version of Quickbooks into the online version is accomplished with reasonable ease. It is reasonably quick, but in comparison to Xero in general, it is substantially slower. Despite this, it offers a solid collection of reports.

It has the appearance of a desktop application that has been moved to the web, but it actually has a quite good interface for a web browser; nevertheless, at the time of writing, it is unable to work on Chrome on my Mac. I have performed some basic stress testing on it, including filling it with 12,000 SKUs; data entry has not been significantly slowed down at all (using a good but not great internet connection).

When I tested out the product support, I found that it was outstanding. The technical support team executed a remote screen sharing into my Mac from an offshore call centre and assisted me in identifying the nature of the issue. The difficulty highlighted the immaturity of the software; payroll reports cannot be generated from the general reports section, which is a source of consternation for users. On the other hand, the customer service was the most helpful I've ever had from a cloud product.

Inventory is available in Quickbooks Online's higher tiers, however its functionality is extremely limited (although better than Xero). During the order input process, for instance, it does not offer any insights into the available stock and it does not raise any objections to invoices that send stock levels in the negative direction.

It does have some location tracking capabilities, though (which goes through the financial accounts, so it can be used to generate P&L per location). However, it is likely that manual modifications will be necessary whenever stock is moved between sites. There is no help available for the automatic reordering process.

It provides the ability to divide transactions into different categories, similar to Xero. There are two dimensions, which are collectively referred to as "classes," and the functionality includes financial planning. You can also budget based on each individual customer.

I believe that it is likely that some Quickbooks customers will remain in the Quickbooks camp as a result of this product, and if I were a small business that was currently utilising QuickBooks, the first thing I would check into is QuickBooks online. The primary deficiency when compared with Xero is the significance of the cloud ecosystem, which refers to the ease with which it is possible to expand using products from third parties. Evaluating this requires having some sort of vision for the function that cloud-based IT will play in your firm.

Quickbooks Online appears to be missing several features in comparison to Xero on the 'edges.' For instance, it is not possible to import sales orders that are saved in a CSV file, thus you will need to find an other solution elsewhere. This is terrible beyond belief. You are able to import products using CSV, but the procedure is sluggish and prone to errors.

When compared to import/export, Xero is in an entirely other league, both in terms of its possibilities and its robustness. Unfortunately, as I write this, the product flat-out refuses to function in Chrome on my OS X computer... and this has been the case for several days. That is not a nice way to present yourself.

Bookkeepers have high regard for the classic version of QuickBooks; in my experience, they favour it over MYOB AccountRight without exception.

My experience with Quickbooks Online has led me to believe that it is an excellent tool. One may argue that it offers superior customer service to Xero, at least in terms of the vendor. On the other hand, Xero has a significantly larger market share in a lot of areas, particularly in Australia, New Zealand, and the UK, so it's not hard to find people who are familiar with Xero. This is a significant disadvantage for Quickbooks.

If you're willing to sacrifice some functionality, Quickbooks offers some very affordable plan options. Inventory is slightly superior to Xero, however it is not sufficient for meeting any requirements beyond the most fundamental ones. Compared to Xero, Payroll is not nearly as remarkable. It does not contain a module for fixed assets. Although it does not have the same ecosystem reach as Xero, it is currently in a respectable second place. That is really all there is to say about it: a strong showing in second place.

Cost Comparison

When making a comparison of the prices of the various solutions offered by MYOB, QuickBooks, and Xero, ensure that you take into account the cost of annual support. Having support, particularly in the beginning, is essential, and knowing that assistance is just a phone call away can be a literal lifesaver. In addition, if you have a solid understanding of the software, you will be able to make the most of all of the capabilities that it offers.

It is crucial to take into consideration the cost of annual support because it might equal or even exceed the initial cost of the programme, in addition to other ongoing payments. It is not usually necessary to upgrade your accounting software every year; but, if a business has employees, you will typically be required to do so in order to obtain the most recent payroll tax tables.

Features and Benefits

On their own websites, MYOB, QuickBooks, and Xero all offer free trials that may be downloaded in order to assist you in selecting the accounting software that is most suitable for your company. Test out some demos of the different products to discover which one works the best with any qualities that are specific to your company.

For instance, community or non-profit organisations may find the advanced budget capabilities offered by QuickBooks to be more convenient, but firms that maintain inventory in a number of different locations may find that MYOB is more beneficial.

Will You Need Add-ons?

If you want your accounting software to have the highest possible level of usefulness, it is essential that it be able to interface with the other computer applications in your business. You may get a list of add-ons for MYOB by going to the page that is dedicated to MYOB Add-Ons. To obtain information regarding add-on products for QuickBooks, go to their website at www.quickbooks.com.au or call their customer care number. To learn more about Xero, please go to www.xero.com.

Mac or PC?

MYOB FirstEdge and MYOB AccountEdge are the only small business accounting software solutions offered in Australia that are compatible with the Macintosh platform. In the United States, the QuickBooks programme is solely downloadable for the Macintosh operating system. Mac, Windows, iOS, and Android are the operating systems that Xero supports. It's possible that this will restrict your choice.

Choose Xero

When compared to its other two rivals, Xero offers a far wider variety of appealing features. This fact cannot be refuted.