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Two of the biggest names in Australia are MYOB and Xero. MYOB has been around since the early ‘80s. Xero, however, surfaced in 2006 – and has since been giving MYOB a run for their money.
In this article, we’ll explore the main differences and see how Xero and MYOB Essentials stack up against each other for small (and growing) businesses, after which we’ll explore which is better for your business. Let’s take a look now.
Xero: Features and functions
The brainchild of NZ tech entrepreneur Rod Drury, Xero was one of the original cloud-based accounting software products. It continues to dominate the accounting SaaS industry.
Xero’s third-party partnerships and user-centred approach mean integration is easy for most industries. Out of the box Xero is an intuitive product with a good range of features but it’s the add-on features that have made this software so popular.
Xero’s ‘Starter’ base plan is limited with payroll for only 1 person and a small number of monthly invoices, so growing businesses can expect to pay for the services they need to manage finances.
It’s no wonder Xero continues to be popular: it is well-designed and saves oodles of time. With a bit of Xero training this software can make a world of difference to sole traders and business owners.
What Does Xero Do?
Send invoices, run reports and pay staff direct through the software. Payroll numbers are limited in the base plans; on the Premium plan users cost $2 each above the standard 5.
Xero allows users to run multiple reports at once. There are also a stack of ready-made reports like income statements, balance sheets, cash flow records and BAS details to streamline your time.
Invoices are generated easily from the dashboard and are tracked with automatic reminders to ensure late payments don’t affect cash flow. Starter plans only include 5 invoices, 5 bills and 20 bank transactions per month. You pay more, you get more.
All plans include inventory tracking and management that is surprisingly powerful, even in the standard plans. Third-party add-ons mean ordering, inventory tracking, customer orders and workflow can be customised for most industries.
- Pay expenses and receive money
Payments are essential to running a business! Record, pay and manage expenses directly through Xero’s inbuilt functionality. Customers can also pay direct from the invoice.
- Customer support
- Bank connections and reconciliations
- Mobile app available on Apple and Android devices
- Track time spent on projects
- Generate quotes
- Multi-currency integration
- Contacts and smart list
Xero offers 3 plans at different price points:
- Starter $25/mo
- Standard $50/mo
- Premium $65/mo for 5 users, up to $150/mo for 100
Starter and Standard plans offer payroll for a comparatively low number of users; just 1 for Starter plans and 2 for Standard. These entry levels are designed for sole traders sending 5 or fewer invoices each month and include powerful inventory management. Xero’s Premium plan has prices for defined employee levels (5, 10, 20, 50, 100) and each user over 100 costs $2 per month.
Who Is Xero For?
Xero has traditionally been popular among sole traders and small businesses like cafes, farmers and real estate companies. With a huge number of add-on services are now available Xero is a confident choice for SMEs that need to manage non-traditional workflows and employee types.
Xero courses allow business owners to make the most of slick functionality and third-party integrations, and the lower entry level pricing is certainly appealing to sole traders.
Feeling somewhat overwhelmed? Don’t worry – we understand. With so many add-ons and options, it’s no surprise!
We find Xero training unlocks the potential of out-of-the-box features and helps accounting teams and business owners to customise an add-on suite to do exactly what they need from an accounting and payroll software.
MYOB: Features and functions
MYOB has similar features to Xero. Let’s take a look.
What Does MYOB Do?
- Invoicing and quotes
Invoices can be generated in-app or on mobile, and customers receive automated invoice reminders while having the ability to see all unpaid invoices at once.
For employees, filling out timesheets and viewing payslips is all handled through MYOB. For the payroll person in your team, MYOB training will help with the functionality of automatic tax and superannuation calculation (updated whenever the laws change) and detailed payroll reporting.
- Business insights
Run all kinds of reports and gain insight to the inner working of your business’ financial health. Compare data against your budgets and invite your accountant into the system.
- Mobile app
Beyond invoicing and sending quotes, the MYOB Capture app allows anyone in the business to take photos of receipts for direct upload to the backend.
- Bills and expenses
MYOB have focused some effort in a clever AI system that captures relevant information from bills and receipts, and provides drag-and-drop functionality, for easy expense management.
What Does MYOB Cost?
MYOB recently adapted with a product that offers a no-frills payroll only product for 4 employees:
- Essentials Payroll $10/mo
- Accounting Starter $27/mo
- Accounting $48/mo
- Accounting + Payroll $60/mo
Although a little pricier at the base level, MYOB Essentials Accounting + Payroll gives businesses payroll flexibility with no employee limit.
Who Is MYOB For?
MYOB is adaptable to growing businesses but appeals to largely the same target audience as Xero. Payroll in the cheaper plans is comparable (1 user) however MYOB has an advantage with an Unlimited option for lower tiers and no limit once you hit $60/month.
Unlimited users then become the main standout feature of MYOB.
Without the bolt-on services that make Xero appealing to organisations demanding flexibility and customisation, MYOB finds its niche in businesses with a small back-office and large workforce.
The Final Decision: MYOB v Xero?
There are many similarities between MYOB and Xero, however, at the end of the day, Xero is a clear choice with its superior user experience, flexibility and customisation.
Ultimately, Xero offers a more user-friendly system and third-party integrations that push it to the lead here, making it Sandercoe Accounting’s cloud-based accounting software of choice.
Choosing a new software may seem daunting. There are many benefits to choosing Xero, and here’s another! We are happy to offer you a free Xero set-up or audit, as well as the first 3 months of your subscription on us when you sign up as a Sandercoe Accounting client.