MYOB versus Xero: the test / Don't make your decision based on price alone

Michael Bailey for Sydney Morning Herald writes: The arrival of cloud-based accounting systems has busted open a space long dominated by incumbent MYOB, but picking the provider which suits your business best comes down to more than price.

“They’ve all got their good points and you need to be across more than one,” says Mary O’Driscoll, a principal in Crowe Horwath’s business advisory practice.

The five main players in the Australian market are MYOB; New Zealand’s fast-growing born-in-the-cloud Xero; global giant Intuit with Quickbooks; Reckon, the former Australian distributor for Quickbooks which now has its own cloud-based offering; and Saasu, a Sydney-based player.

Picking an accounting system is a vital yet often baffling decision for new businesses, O’Driscoll says, particularly as the players seek to attract start-ups with free trials that can convert into paid subscriptions when transactional levels increase.

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The jaw-dropping performance of Xero shares reflects “the fundamental change that cloud-based accounting and bookkeeping is making to the way we do business,” O’Driscoll says.

She acknowledges that Xero is “ahead of the rest” when it comes to compatability with smartphones and tablets for entrepreneurs on the go.

However Crowe Horwath - which is a ‘platinum partner’ for Xero with more than 1000 clients using the software, but also a partner for MYOB in transitioning clients to its cloud-based AccountRight Live and Live Accounts platforms - regularly recommends a range of systems to businesses based on their needs.

“For example if you want inventory tracking, the Xero product on its own would not be sufficient – you’d need an add-on, whereas that is included in MYOB’s off-the-shelf product,” O’Driscoll says.

There is no “expensive” provider, she explains, but there is money to be saved in packaging add-ons tailored to your firm’s individual needs.

“MYOB also offers more a hybrid model. You can sync it and choose to use it offline, which suits some businesses. Obviously you can’t do that with a cloud-only solution.”

O’Driscoll says Intuit is “a bit behind in terms of its cloud product” but once localised it will offer a global heft the others lack. An example of its innovation is Quickbooks Financing, which uses the cloud-based data it already holds on its customers to try and give banks a better measure of their creditworthiness.

For the full story including a small business case study of a switch from MYOB to Xero, go to brw.com.au.