Pam Pitt for BoxFreeIT writes: There has been a massive move towards cloud-based accounting solutions over the last three years in Australia. In that time MYOB AccountRight Live and Xero have a large share of the market. At the end of 2013, 80,000 Australian Xero clients are currently using cloud accounting, while more than half of new MYOB registrations in Australia are for cloud accounting solutions.
Our team of bookkeepers at Bookkeepers4u works with Xero, MYOB and Quickbooks Online cloud programs, so we asked our team for some feedback. This is a summary of the comments that came back from the coal-face in relation to Xero and AccountRight Live.
Functionality
Xero is an attractive product with some great dashboards that gives a snapshot of the financial position of the business. It is a good product for more basic businesses, quite easy to set up and use, and is very similar to MYOB’s LiveAccounts browser-based program.
MYOB AccountRight Live is more suitable for businesses with more complex business operations. It provides functionality that Xero users can only achieve by buying third party applications such asUnleashed, which is used for inventory. Typically add-on products do not give you the same depth of integration back to the general ledger.
AccountRight Live Plus has the ability to track inventory on hand, handle complex payroll and has time billing (which can be used to generate sales invoices and payroll). Xero on its own cannot do these functions.
Xero also has a limit of approximately 1,000 invoices per month, 1,000 banking transactions per month and around 5,000 contacts in total whereas AccountRight Live and Live Accounts have unlimited transactions and contacts.
Some of the more expensive Xero plans have a very good multi-currency function, which AccountRight Live does not have. Xero to Xero functionality also makes it easier to deal with inter-company transactions and transactions from other Xero users. A Xero plan allows unlimited numbers of users to access the file whereas AccountRight Live is restricted to five concurrent users.
Xero does integrate very easily with third-party applications; there are over 300 additional programs that can be added on to Xero (at a cost), extending the functionality into many specialised areas. There is no rating of these products so it is up to the user to determine the suitability of the product and the viability of the supplier behind it.
MYOB launched their API for AccountRight Live earlier this year and have over 100 apps listed on their add-on centre. Users report that both systems are easy to integrate.
Cloud
This is one of the biggest points of difference between AccountRight Live and Xero. MYOB users have the option to use the software on the desktop or the cloud. Xero is only available on the cloud. Cloud-based accounting systems have a slight lag in comparison to having a file on the desktop. With AccountRight Live there is the flexibility of taking the file offline if a user requires faster processing.
In both cases, the accounting file can be accessed by multiple users from multiple locations when it is stored on the cloud. AccountRight Live also enables users to install the software across a local network where five users can access the file at the same time.
With MYOB, since the file can be used on the desktop, there is the need to download any new software updates onto the users’ computers, and to make sure everyone has the latest update. With Xero, this is done automatically.
This leads to another important point – with Xero, there is no local backup of the data file. This is not crucial while the client is using the software, as the servers used by Xero are fully backed up. But if the client stops paying for the product they no longer have access to their accounting data. There are no local backups to use. They are able to print off reports and extract data into spreadsheets, but they are not able to open their accounting file.
With MYOB, clients are able to buy and own the software, so they are able to take backups and continue accessing their accounting files even if they stop paying their subscription. The backup functionality is also useful for a bookkeeper or an accountant as it lets you back up the business at a point in time, for example, at the time a business activity statement (BAS) was submitted.
Support
MYOB has a very good range of support options. For clients who have current support plans, there is a free phone call centre with extended hours. There are a huge range of well explained support notes on the MYOB website. The live chats and webinars are increasingly popular.
In addition, there is the MYOB forum where any MYOB user can log questions and post answers. Other MYOB users, MYOB staff and MYOB Certified Consultants all respond to the questions.
Xero is a much newer product and currently does not have the same breadth of support. There is no phone call centre. However, there is an email service for client questions and a website of frequently asked questions and guides, plus very good regular webinars and training sessions. Xero users are very active in social media too.
Payroll
MYOB AccountRight Live Plus and Live Accounts have no restriction on the number of employees who are in the payroll run. Xero charges more per month dependent on the number of employees in a pay run.
AccountRight Live Plus has the ability to handle more complex payroll arrangements, for example it is very easy to run an additional pay without doing it in the standard pay run. Staff can have standard pay items set up on their pays too, which also makes doing the pays much easier.
On the other hand, Xero has the advantage of having all the superannuation funds set up in the payroll section which saves time in having to enter or look up funds. MYOB indicated that they adding this in 2014 but at the time of writing this was not available.
However, our bookkeepers have found Xero’s payroll generally to be time consuming; a lengthy procedure to do a pay run, then a draft bill has to be raised then approved then authorised, then apply separately to a multi-payment on the bank feed.
Xero has indicated this is going to change but it hasn’t happened at present. Our bookkeepers also said that handling expense claims on Xero payroll is difficult. And they also find it very difficult to do unscheduled pays and pays in advance in Xero. Overall, their preference is for MYOB when clients are using the payroll function.
Pricing
At the time of writing, AccountRight Live starts at $29 (no restrictions on transactions, but no payroll or inventory) up to $65 a month (including unlimited employees, payroll and inventory). Xero has a number of plans starting at $25 a month for the smallest plan (restricted to five invoices and five bills a month and 20 bank transactions) and going up to $90 a month (with a restriction of 100 employees).
Conclusion
There will be continuing debate over which cloud accounting software is “the best”. It comes down to the individual business needs rather than one particular software. By providing comparisons like this we hope that businesses will be able to make a more objective choice when looking for their next cloud accounting program.
Pam Pitt is a director of Bookkeepers4u, a Melbourne bookkeeping service which deals with MYOB, Xero and QuickBooks Online software, and Two Peas, an accounting software consultancy. Pitt was also MYOB partner of the year 2013.
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