Xero vs MYOB review - Comparing which is better for your business?
Two of Australia’s most popular accounting software are MYOB and Xero. It’s not a rare sight to see the two software being compared when it comes to picking the right accounting platform for businesses.
Both come with their own sets of features and have advantages and disadvantages over the other.
To help you make a more well-informed decision on which software you should use, here is an MYOB vs Xero review detailing what they each have to offer and what businesses could benefit from them the most.
Features of Xero accounting software
• Payroll management: Calculate payroll taxes and process salary payments with Xero. You can report your payroll details to the ATO for easy and ensured compliance.
• Track projects: Track your project costs and get paid for them on the same platform. Send quotes and invoices to customers to streamline project payments.
• Sending invoices: Generate invoices from your Xero dashboard or mobile app. Send them to your customers and follow up with automatic reminders to ensure there are no late payments.
• Inventory management: Track your inventory when you’re doing business. Add preset items to your invoices and orders, see which of your inventory is selling the best, and manage all your stock.
• Accounts payables & receivables: Manage both your accounts payable and receivable without having to switch platforms.
You can accept payments from customers straight through Xero while also having the ability to record and pay your expenses on the same platform.
• Bank reconciliation: Ensure that your financial information is all accurate and up to date with Xero’s automated bank reconciliation. Easily reconcile your bank accounts every day.
• GST returns: You can make filling out your BAS easier using Xero’s automatic GST calculations. Get accurate GST return numbers and speed up your tax reporting process.
• Claim expenses: Xero allows you to make the expense process faster and easier. Record, manage, and approve your expenses with Xero. Settling reimbursement claims can also be done through Xero’s platform.
You can also connect your bank account to Xero for smoother payment processing and reconciliation. Not only that, but Xero also offers time tracking on your projects, making it easy to invoice billable hours to customers.
Supporting over 160 currencies, invoices generated through Xero can also factor in currency conversions automatically before they’re sent and settled.
Xero offers several different plans at different price points, each suited for different types of businesses.
The pricing starts at AU$ 29 per month for the Starter plan, goes up to AU$ 59 per month on the Standard plan, and increases once again to AU$ 76 per month for the Premium 5 plan.
The Premium 5 plan allows payroll features for up to 5 people, which can be increased with add-ons. Xero also offers the Ultimate 10 plan for larger businesses at AU$ 110 per month, with add-ons available.
If you have a larger or more complex business that requires many add-ons, it may be best to start with one of the more advanced plans to bundle and save money in the long run.
Xero can be used by many different types of businesses. Delving deep into Xero in the MYOB vs Xero review, however, shows that Xero is most popular amongst sole traders and small businesses.
Many cafes, retail shops, and agriculture businesses, for example, utilize Xero to help ease their accounting processes. With a low starting cost, Xero is appealing to businesses that are still slowly emerging and growing.
They can also be utilized by bigger businesses with the many add-ons they offer to tackle different problems. Each plan will suit a different type of business.
Sole traders are likely to be content with the Starter plan while emerging small businesses might opt for the Standard plan.
If you do business globally and have many foreign vendors and customers, however, you might want multi-currency functionality with the Premium plan.
One of the things that make Xero stand out is that they have a number of add-ons to help you customize what it is that you need from your accounting software plan.
There are many levels and customization options, which can make it easier for you to personalize your plan according to your business needs.
Xero also offers training for new users, which is advantageous for many businesses. It can help you realize what exactly you need from an accounting platform to make your processes easier.
Moreover, Xero comes with a 30-day free trial to help you get acquainted with the platform. If used according to your business needs, Xero can easily make your accounting more streamlined.
While the add-ons can help you feel like your plan is suited exactly to your needs, the cost can also add up. This is especially true if you start on the lowest-tier plan.
With a limited number of invoices that you can process and bills you can enter, the Starter plan can get redundant real quick before you have to upgrade your plan.
In an ideal situation, your business will scale proportionally with the need for add-ons and an upgraded plan, but this may not always be the case for more complex business structures.
Xero can help you solve these complex issues, but only if you’re willing to spend a little bit more money.
As of 2020, Xero is reported to have around 47% market share of the small business accounting software market in Australia.
They have the biggest market share in their particular Australian market, even when comparing MYOB vs Xero. This number may vary globally and only reflects the Australian market.
Features of MYOB accounting software
• Invoicing and quotes: You can create customized quotes and invoices easily at any time. Track which invoices have been paid and which haven’t and send payment reminders to customers who haven’t settled their invoices.
• Payroll: Automate payroll taxes and superannuation calculations, allow employees to fill out timesheets, and generate salary payments through MYOB. File your payroll reports to submit to the ATO easily.
• Business insights: Gain insights into your business finances through robust reporting with MYOB. You can compare your income and expenses to your budgets to ensure that you’re on the right track.
• Mobile app: The MYOB mobile app offers you MYOB functionality and features that you can access on the go. Not only can you send invoices, but you also can use the MYOB Capture App to take photos of and scan receipts.
• Bills and expenses: Make expense management easier by using AI technology that allows employees to simply scan receipts to capture their information. Forward your bills to the platform for a more streamlined process.
• Tax and GST: MYOB can automatically calculate GST for you. Prepare your BAS directly from the MYOB software for faster and more accurate reporting and send it off to the ATO hassle-free.
• Receive payments: Enable online payments and give customers the ability to pay online directly from the invoice. Receive payments on MYOB and reduce the chances of late payments.
• Cash flow management: Get better visibility of your finances in real-time. View your income, expenses, and even profits presented as structured data to make budgeting and managing your cash flow easier.
An MYOB vs Xero review would not be complete without mentioning that MYOB also has similar functionalities with Xero. Like Xero, you can manage your inventory with MYOB.
Manage your projects better with features that allow you to track profits and losses by project and view what your best-sellers are. You also have access to multi-currency accounting to support you in growing your business globally.
MYOB offers a payroll-only plan for AU$ 10/month. However, this plan is limited to only 4 employees. The MYOB Business Lite plan is AU$ 28/month but comes with a 50% discount that makes the first three months cost AU$ 14/month.
You can add payroll functionalities for up to 2 employees with this plan, costing you an additional AU$ 1.50 per month per employee.
Similarly, the MYOB Business Pro plan also offers payroll add-ons for the same price of AU$ 1.50, though there’s no employee limit. The plan costs AU$ 26.50/month for the first three months and then goes for AU$ 53/month after.
With the MYOB Business AccountRight Plus Plan, you can have unlimited payroll features for no extra costs, meaning the plan comes up to AU$ 65/month at the discounted rate and is AU$ 130/month undiscounted.
The MYOB Business AccountRight Premier plan, which offers the most features, is AU$ 160/month without the 50% discount. This makes the first three months come to a total of AU$ 80/month.
The MYOB vs Xero review analysis shows that MYOB and Xero have similar user bases and target markets.
MYOB can be used by sole traders, small businesses, and even more established medium-sized businesses. Businesses that use MYOB commonly operate in sectors such as retail, hospitality, and real estate.
MYOB may not have the variety of customizable add-ons that Xero offers, but it excels in the features that it has to offer, particularly the payroll feature.
If you own a business with a tried and true model that doesn’t demand a lot of complexities, MYOB could be the perfect accounting software for you.
With the AccountRight Plus or Premier plans, you don’t have to worry about paying extra even when processing payroll for a large workforce.
MYOB has a complete and advanced payroll suite. Unlike Xero, MYOB also has plans that offer unlimited users without you having to purchase add-ons for your payroll.
Not only that, but the MYOB payroll also comes with timesheets and rosters for your employees. If your business has a large number of employees and managing your payroll takes a lot of time, then MYOB can be the right fit for your business.
When compared to Xero, MYOB accounting software does not have a large variety of add-ons to customize your plan to suit your business needs.
This could mean that for more complex business models, MYOB might not be as accommodating.
While MYOB excels at the features that it does have to offer, the MYOB vs Xero review shows that there can be a lack of customization in these features, which could really make a negative impact if you have a more complex business.
With the second largest market share of Australian small business accounting software, MYOB reportedly had 41% in 2020.
They are in very close competition with Xero, hence why many accounting software comparisons in Australia focus on an MYOB vs Xero review.
The short answer is that it depends. After conducting an MYOB vs Xero review, it’s clear that the better option for your business depends largely on what your business is looking for.
MYOB has robust features and an excellent payroll suite to boast. With simpler business models, MYOB could easily be the more straightforward choice.
This is especially true if you have a large workforce, as MYOB could help you in your payroll management and save you a lot of time with it.
However, as Xero is more customizable, it could be the more suitable accounting software for businesses that are more complex.
Some automated processes with Xero can seem easier and more complete, as they can be adjusted to your business needs. Xero also offers better interactions between employees, bookkeepers, and customers.
At the end of the day, you should analyze your own business model before picking which accounting software to use for your business.
If you have a non-complex business model but a large number of employees, MYOB might be the better choice. Conversely, if you have fewer employees but run a complex business, then Xero might be the software for you.
After a thorough MYOB vs Xero review, it’s obvious that both software are useful in their own ways.
Regardless of which accounting software you choose for your business, however, accounting software is not the only tool that your business might need.
Instead, you can optimize their usage by fitting them into a larger ecosystem of software and platforms to aid your business.
As an expense management platform, Volopay offers accounting integration with MYOB, Xero, and many more. You can ensure that you are on top of your accounting while keeping track of all your expenses.
Pairing Volopay with MYOB or Xero means that you can manage your expenses better while making sure that they’re all recorded in your books.
When an expense is made through Volopay’s platform, you can automatically categorize it in your ledger through the use of triggers.
Not only that, but you can also perform two-way reconciliation to ensure that everything on both software match perfectly.