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It's fair to say that accounting software has come a long way over the last 30 years. The arrival of the internet quickly disposed with old-school ledgers and paper-based systems, 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.
The cloud allows you to access your data anytime you need it without having to physically store that information on your computer, and it 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 accountants are Xero and MYOB. Both platforms offer easy and effective ways to manage accounting, payroll, and human resources, as well as order and inventory processes. So, which one is the best cloud accounting provider?
The best way to settle the Xero vs MYOB debate is to dive into a head-to-head comparison.
Keen to understand more about this thing called the cloud? We can talk you through how cloud-based accounting software applications can benefit your small to medium business, so get in touch with us today.
A short history of Xero
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 He felt that traditional desktop accounting software had become outdated and decided to create a modern cloud-based solution.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 $NZ27 now.
The Xero promise is simple: 'beautiful accounting software'.
A short history of MYOB
MYOB has been around for longer than Xero - 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 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 own brand repositioning efforts: 'simplify success'.
The head-to-head comparison
When it comes to the Xero vs MYOB debate, it's important to stress that there are no right or wrong decisions. Whichever software you decide to 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
Here are a few other 'nuts and bolts' you might want to consider:
- 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.
- Xero offers a lot more integrations with third- party software and apps - over 400, in fact, which enhances its capabilities to suit the needs of almost any small-medium business. MYOB is restricted by its reliance on software that needs to be installed on your computer and is only Windows compatible.
- A quick way to decide between Xero vs MYOB is by finding out what your accountant uses and recommends. At the end of the day, if they are proficient with a particular accounting platform, then it makes more sense to choose that one.
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, it's built in a way that 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's not quite there yet in terms of ensuring a polished and uncomplicated user experience.
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 Gold Status. We are proud to be a Gold partner because it reflects our level of experience helping Melbourne-based businesses use Xero.
If you would like to find out more about Xero and explore whether it would be a good fit for your accounting needs, we're here to help. Book a consultation about how you can implement Xero into your business and migrate over your existing accounting software.