Accounting has come a long way since the days of the abacus. Gone are the days of physical records of documents or bulky server rooms for data storage — thanks to software like MYOB and Xero, business owners and accountants can access their accounting package live, from anywhere in the world.
Moving to cloud-based accounting makes sense for most businesses if they haven’t done so already. Cloud accounting allows your data to be live, secure, and easily accessible. Reconciliation processes have improved significantly, with bank feeds imported directly into accounting systems to improve efficiency and reduce error rates. Advisors can directly change their clients’ accounting records as necessary, given they have the required permissions to do so, allowing accounting records to be as accurate as possible for the purposes required.
The two major cloud accounting software packages used in Australia are Xero and MYOB. There is much debate about which package is better between the two, both among businesses and their advisors. To settle the debate, Liston Newton’s tax and advisory accountants have compared MYOB and Xero, weighing up the pros and cons of each platform.
With the guide below, you can confidently choose the right accounting package for your business.
Meet the challengers
MYOB, the venerable powerhouse
MYOB was founded in the early 1980s. For a significant period, it was the dominant player in computer-based accounting software for Australian small businesses, developing a reputation for itself in the provision of accounting software.
To keep up with a transforming industry landscape, MYOB released its own cloud-based accounting package in the form of MYOB AccountRight and MYOB Essentials. These have been continuously updated since, and are used by many businesses in Australia today, both from their Windows application and online.
While MYOB’s cloud-based products offer features comparable to Xero’s, many advisors believe MYOB is still playing catch-up to its main competitor—Xero, the first innovator in the cloud accounting space.
MYOB’s promise as a brand is to ‘simplify success’, a promise which it has certainly fulfilled in its tenure.
Xero, the innovative challenger
Xero was founded in 2006 by tech entrepreneur Rod Drury in Wellington, New Zealand, where its headquarters are still located. Originally, the company was to be called Accounting 2.0, representing the reinvention of computer accounting to a decentralised, easy-to-access format.
Since its creation, Xero has dwarfed MYOB’s market share, now being used in over 180 countries worldwide and supplying over 3 million subscribers as of September 2021. It was also uniquely funded, going public on the New Zealand Exchange early in its existence — its stock has risen from $1 NZD on debut to $77 NZD today.
Xero’s promise as a company is simple: ‘beautiful accounting software, and although beautiful might be a strong word, many advisers we speak to, seem to prefer the useability and design of Xero.
The advantages and disadvantages of MYOB and Xero
It is important to stress that there is no correct or incorrect decision in the Xero vs MYOB debate. Both software packages will provide powerful, responsive solutions that will streamline and strengthen your accounting processes. What actually matters is what you, your accountant and your business need.
We’ve asked our accountants what they believe the differences between MYOB and Xero are and summarised their insights in the table below.
[table]
[thead]
[tr][th][/th][th]Xero[/th][th]MYOB[/th][th]Winner[/th][/tr]
[/thead]
[tbody]
[tr][td]Cost[/td][td]Ignite: $35/month<br>Grow: $70/month<br>Comprehensive: $90/month <br>Ultimate 10: $115/month[/td][td]Lite: $34/month<br>Pro: $63/month<br>AccountRight Plus: $150/month[/td][td]Xero offers better functionality for similar prices, except payroll for over 200 employees.[/td][/tr]
[tr][td]Sign-up and installation[/td][td]Slick, easy, and intuitive.[/td][td]Slick and easy but advanced features like inventory tracking may need assistance.[/td][td]Xero[/td][/tr]
[tr][td]Compatibility[/td][td]Both Windows PC & Mac.[/td][td]Browser-based for all systems. AccountRight desktop is Windows-only.[/td][td]Xero[/td][/tr]
[tr][td]Payroll[/td][td]Payroll up to 200 employees at Ultimate 10 tier.[/td][td]Pro: Payroll for $1.50 per employee, unlimited. AccountRight Plus & Premier: Unlimited.[/td][td]MYOB (Unlimited payroll)[/td][/tr]
[tr][td]Bank Compatibility[/td][td]Unlimited bank connections.[/td][td]Lite: 2 bank connections. All other plans: Unlimited.[/td][td]Xero[/td][/tr]
[tr][td]Reporting[/td][td]Customisable reports, multiple reports at once.[/td][td]Limited reporting capabilities, less customisation.[/td][td]Xero (More robust reporting)[/td][/tr]
[tr][td]Invoicing[/td][td]Ignite limits invoices to 20 per month. Others: Unlimited.[/td][td]All plans allow unlimited invoicing.[/td][td]MYOB for basic plans, otherwise, it's close.[/td][/tr]
[tr][td]Inventory[/td][td]Basic inventory tracking on all plans.[/td][td]Lite & Pro: 10 items<br>AccountRight Plus: Unlimited items (1 location)<br>Premier: Unlimited items (all locations)[/td][td]Xero (with third-party add-ons)[/td][/tr]
[tr][td]Mobile App[/td][td]Available for iPhone and Android.[/td][td]Available for iPhone and Android.[/td][td]Xero (Better user experience)[/td][/tr]
[tr][td]Employee Login[/td][td]Payroll-inclusive plans allow employee access via app.[/td][td]Lite & Pro: Employee access via YourPay website. AccountRight lacks this feature.[/td][td]Xero[/td][/tr]
[tr][td]EOFY Data Rollover[/td][td]Continuous, no rollover needed.[/td][td]Lite & Pro: Continuous. AccountRight requires manual rollover.[/td][td]Xero[/td][/tr]
[tr][td]Foreign Currency[/td][td]Multiple currency support (Premium & higher).[/td][td]Multiple currency support in AccountRight Premier.[/td][td]Xero (More experience with multi-currency accounting)[/td][/tr]
[tr][td]Online Support[/td][td]Extensive social media, forums, online docs.[/td][td]Forums, online documentation, training videos.[/td][td]Xero (More comprehensive support)[/td][/tr]
[tr][td]Phone Support[/td][td]Not available.[/td][td]Available Monday to Friday, 7AM – 7PM.[/td][td]MYOB[/td][/tr]
[/tbody]
[/table]
The key differences between Xero and MYOB
Pricing
Xero offers a significantly more streamlined pricing structure compared to MYOB. MYOB separates its offerings into different plans with varying functions. Lite and Pro subscriptions are online-only, whilst AccountRight is a hybrid desktop and online application. On the other hand, Xero provides three clear tiers of the same core product, each offering progressively more features.
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.
Payroll
MYOB offers a key advantage over Xero when it comes to payroll services, providing unlimited payroll and more straightforward employee payment options—without requiring businesses to pay for additional features they may not need
Invoicing and inventory
Xero’s customisation capabilities with third-party add-ons make it better suited to invoicing and inventory management than MYOB.
EOFY data rollover
MYOB’s online-only data rollover packages are equal to Xero's in continuous data; however, MYOB's AccountRight packages require manual EOFY rollover. For this reason, Xero’s functionality in data rollover is unmatched.
Online & phone support
Xero’s vast online resources, especially its global online community, make it easy to find the answers needed for most questions. MYOB does, however, provide business-day phone support if required, while Xero does not offer phone support at all.
3 considerations for picking MYOB or Xero for small business
1. Data security
Data security is an increasingly important consideration to make when choosing software for your business. Both platforms require two-factor authentication for online log-ins. Additionally, both services have ISO 27001 Security Standard compliance and SOC2 security assurance audits, and they comply with the Payment Card Industry Data Security Standards. From what we can tell, your data is safe with both Xero and MYOB.
2.Third-party app integration
Xero has an app marketplace with over 1000 third-party apps that can integrate seamlessly with your accounting package to create a bespoke solution for your small business. Xero has been including app integrations since 2011 and is an innovator in the field. On the other hand, MYOB now provides app integration, opening its API in 2015 to stay relevant in the accounting software field. Overall, we consider Xero to be more mature in its app integration.
3. 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 needs best and may feel more proficient and productive with one choice over the other.
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Book a free financial strategy session
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The final answer: what’s the best online accounting software for small businesses?
When it comes to cloud-based accounting, Xero is the standout choice for SMBs. Built from the ground up for an internet-connected world, Xero delivers a clean, intuitive user experience that perfectly suits small to medium-sized businesses. While MYOB has made progress in modernising its platform, it still feels like it’s playing catch-up. The advisors we speak to consistently recommend Xero over MYOB for its streamlined design, effortless functionality, and superior user experience.
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Migrate from MYOB to Xero with Liston Newton
At Liston Newton, we confidently recommend Xero because it works seamlessly and saves time for both you and us. As a Xero Platinum Partner, we’re proud to offer our clients the highest level of Xero bookkeeping expertise. This Platinum status reflects our extensive experience helping businesses across Australia make the most of Xero’s capabilities.
If your business is ready to migrate from MYOB to Xero, our advisors can ensure a smooth, hassle-free transition with minimal disruption. Book a consultation with our team to learn how you can successfully implement Xero and transfer your existing accounting software.
