Are you in the market for accounting software but need some guidance to choose the right one for your Australian business? Rest assured, we’ve got you covered. In this article we provide an in-depth comparison of Xero vs MYOB to assist you in making this important decision.
Xero and MYOB are both popular accounting solutions designed to simplify bookkeeping and accounting processes in small to medium-sized businesses. Founded in the 1980s, MYOB was the dominant choice for Australian small businesses for many decades. Then, in 2006, Xero was released in New Zealand (and later in Australia), revolutionising small business bookkeeping by offering flexible, and affordable, cloud-based accounting for the first time. Although MYOB has adapted to offer cloud-based options as well since then, Xero has eaten up a lot of MYOB’s market share.
The features each solution offers are robust and useful. The main areas Xero and MYOB differ are in the pricing structure for these features and, in some cases, the capped limits. Understanding the current needs of your business, as well as your potential future needs, should be your first step in the decision-making process.
Don’t have time to read the full article? Our bookkeepers are experts in Xero and MYOB and we can advise you on which program will best meet your needs. We can also help you get setup or switch programs. Contact us on 1300 728 875 or send us a message.
Factors to Consider When Choosing Accounting Software
When choosing accounting software for your business, some of the most important factors to consider are:
Ease of Use – How difficult will it be to set up the program and onboard staff? Is the user interface intuitive and easy to use without extensive training? The answers to these questions can have short- and long-term financial impacts on your business.
Flexibility and Accessibility – Is the program available on the devices you use in your day to day operations or will you need to purchase new equipment that’s compatible with the program? If your team works off-site, will they be able to complete administrative tasks from where they are? Is the program compatible with other third-party programs you want to integrate with?
Compliance – Does the program understand and make it easy to comply with Australian financial regulations and taxation laws?
Invoicing – how many invoices does your business issue each month?
Banking – how many bank accounts does your business use?
Currencies – does your business only charge and accept Australian dollars or do you need a program that allows foreign currencies to be used?
Payroll and Staffing – How big (and complicated) is your payroll? Do you need staff to submit timesheets? Do you need to roster staff?
Job Costings – Do you need to charge clients for your team’s time and keep track of job budgets?
Inventory – Do you need to track stock items and supplies? If so, how many?
Cash Flow – Is long-term cash flow forecasting crucial to your ongoing success or is basic, short-term cash flow management enough?
Price – Are the features you require part of a standard subscription or will you need to pay extra? It’s important to tally up how much a bookkeeping and accounting solution that meets all your needs will cost.
Financial Commitment – Is there a free trial period you can use to test out the program? Is there a lock-in contract for a minimum period?
Xero vs MYOB: the Key Differences
Both Xero and MYOB have modern, user-friendly interfaces and comply with Australian financial regulations, as well as data security standards. At the basic level they provide similar, standard features such as invoicing, bank reconcilations, the ability to keep track of income and expenses (as well as GST), Business Activity Statements, and some level of financial management reporting. We’ve mapped out other factors and features where Xero and MYOB might differ below.
Ease of Use
Xero: Easy to use; lots of online documentation; no phone support.
MYOB: Easy to use; lots of online documentation; offers phone support.
Flexibility and Accessibility
Xero: Compatible with Windows PCs and Mac computers; mobile app also available for iOS and Android.
MYOB: Standard features are compatible with Windows PCs and Mac computers, however some advanced reporting features are only available for Windows PCs currently; mobile app also available for iOS and Android.
Invoicing
Xero: Starter plan is limited to approving/sending 20 invoices a month; no limits on other plans.
MYOB: Unlimited across all plans.
Expenses
Xero: Starter plan is limited to entering 5 bills a month; no limits on other plans.
MYOB: Unlimited across all plans.
Bank Accounts
Xero: Unlimited bank accounts comes standard with all Xero plans.
MYOB: MYOB Business Lite is limited to 2 bank accounts; no limits on other plans.
Currencies
Xero: Starter, Standard, and Premium 5 are limited to a single currency; multiple currencies supported on Ultimate 10 plan. MYOB: MYOB Business Lite and MYOB Business Pro are limited to a single currency; multiple currencies supported on MYOB Business AccountRight Plus and MYOB Business AccountRight Premier plans*
Payroll and Staffing
Xero: payroll is included on all plans, with some limits. The Starter plan is limited to 1 person; Standard plan is limited to 2 people; Premium 5 plan is limited to 5 people; Ultimate 10 is limited to 10 people. There is an option to purchase more on the Premium 5 and Ultimate 10 plans (up to a maximum of 200 people). Xero Planday time tracking and rostering can be purchased for an additional price.
MYOB: payroll is only included on MYOB Business AccountRight Plus and MYOB Business AccountRight Premier plans, and is unlimited; payroll is extra on MYOB Business Lite and is limited to 2 people; payroll is extra on MYOB Business Pro plan but is unlimited. All plans except for MYOB Business Lite include automated timesheets and rostering; MYOB Business Lite has manual timesheets and no rostering.
Job Costings
Xero: Ultimate 10 plan comes with project tracking; ‘track projects’ can be purchased for an additional price on other plans.
MYOB: MYOB Business AccountRight Plus and MYOB Business AccountRight Premier plans come with Bill by time* and Budgeting by job* features; not available on other plans.
Inventory
Xero: Inventory management (up to 4000 finished items) comes standard with all Xero plans.
MYOB: MYOB Business Lite and MYOB Business Pro plans provide inventory management for up to 10 items in 1 location; MYOB Business AccountRight Plus comes with advanced inventory management for unlimited items in one location; MYOB Business AccountRight Premier plan comes with advanced inventory management for unlimited items in unlimited locations.
Cash Flow and Reporting
Xero: Short term cashflow and business snapshot comes standard with all Xero plans; Ultimate 10 plan includes Analytics Plus.
MYOB: MYOB Business Lite plan doesn’t include extra cashflow reporting or budgets, the other plans do; MYOB Business Pro: MYOB Business AccountRight Plus and MYOB Business AccountRight Premier include advanced reporting and analytics, such as inventory reporting*.
Price
Xero: Starter plan is $32/month; Standard plan is $65/month; Premium 5 plan is $85/month; Ultimate 10 plan is $115/month
MYOB: MYOB Business Lite plan is $30/month; MYOB Business Pro plan is $55/month; MYOB Business AccountRight Plus plan is $136/month; MYOB Business AccountRight Premier plan is $170/month.
Note: Prices quoted are current standard prices as at September 2023 and do not include any special offers or discounts.
Financial Commitment
Xero: 30-day free trial is offered regardless of the plan you choose.
MYOB: 30-day free trial is only offered on the MYOB Business AccountRight Plus and MYOB Business AccountRight Premier plans.
*MYOB’s Inventory management and reporting, billing by time, and budgeting by job features are currently available as a download-only feature for desktop PCs (ie not Mac computers or mobile devices). Web browser availability will apparently be included in future updates.
In addition to the features offered by Xero and MYOB, both integrate with many third-party apps and add-ons. You can read our recommendations on great Xero add-ons and MYOB add-ons to explore the full potential of both programs in more detail.
Xero vs MYOB for Sole Traders
Sole traders have specific accounting needs, and both Xero and MYOB have designed solutions to address them with their Starter (Xero) and MYOB Business Lite plans . Again, the decision between Xero and MYOB as a sole trader business depends on your industry and the nature of your business. For example, if you are a sole trader offering a service and need to bill for your time and keep track of job costs, MYOB Business Lite might be the best option for you. Conversely, if you are a sole trader selling more than 10 products, Xero’s built-in inventory management might better meet your needs.
Xero and MYOB both offer several flexible plans to suit a wide range of small businesses. Their monthly pricing structures make them both a cost-effective option for cashflow-conscious small business owners. If you have a small number of employees (10 or less), Xero’s Standard, Premium 5 or Ultimate 10 plans might be your best choice. However, if you have a large number of staff on the payroll, for example a restaurant, MYOB Business AccountRight Plus or MYOB Business AccountRight Premier might best meet your needs. If your business is selling products, consider how many items you need to manage in your inventory and across how many locations.
Conclusion
As you can see from the above, there is no ‘one size fits all’ best accounting software solution. The choice between Xero vs MYOB, or any accounting software, is a decision that should align with your specific business needs and priorities. Both platforms offer robust features, user-friendly interfaces, and flexibility. Your ultimate selection should reflect the unique circumstances of your Australian business. By carefully considering the key differences outlined in this comprehensive comparison, you can confidently choose the accounting software that best serves your needs.
Still not sure or want help getting setup? Contact our team on 1300 728 875 or send us a message for an obligation-free consultation.
