There are many things to consider when choosing the right Accounting/Bookkeeping software to use in your business. And with so many different software options out there, how do you start the process of working out which is the best fit for you?
Here at Davidsons, we find that most clients want an easy to use program, that is cloud-based and doesn’t cost a fortune in subscriptions.
To help with your decision making process, we have listed the benefits and possible downsides of 3 of the most common software products that we and our clients use: QuickBooks Online (QBO), Xero, and MYOB Essentials.
What do all 3 Payroll Software do well?
QBO, Xero, and Myob all cover the basics well, as detailed below:
What you need to look at next is what sets each of them apart, and what are some of the limitations of each platform.
QuickBooks Online (QBO)
What are the benefits of QBO?
There are numerous benefits associated with QBO, including the following:
- It is easier to use for first timers. If you haven’t had any bookkeeping or accounting software experience, QBO is an easier program to navigate and learn to use;
- Although QBO does not come with Payroll included, their recommended add on of KeyPay Payroll for a small additional cost per employee is a major benefit. It is an easy to use payroll program that comes with its own suite of reports and allows for automatic Award updates if you want to take your subscription to that level;
- Inventory management in QBO is a stronger feature than that provided in the Xero software;
- The Bank Reconciliation feature is far superior to that of Xero, in that it allows you to review all entries for the month and finalise the bank balance at month end;
- The search function in QBO is superior to both Xero and MYOB Essentials; and
- Conversion to QBO from other software is free, which includes 1 year of comparative data as well as the current year’s data.
What are the limitations of QBO?
Despite the many benefits, there are some limitations associated with QBO:
- Payroll is not included in the base subscription (but is an add on);
- You cannot have the same name set up as a Customer and a Supplier, and can’t see all transactions in one area; and
- QBO is not suitable for businesses with robust inventory management needs.
How much does QBO cost?
There are 3 subscription offerings when choosing the QBO program that suits your business:
- Simple Start at $25 per month;
- Essentials at $37 per month; and
- Plus at $55 per month*.
Each level has varying inclusions, so please contact us to discuss these if needed, or go to the QBO website for further information. QBO does have additional costs for payroll but is still the cheapest overall when compared to Xero and MYOB Essentials.
Please note: An additional benefit of moving to QBO is that our Wholesale Billing arrangement with QBO allows for a 50% discount on the fees mentioned above if Davidsons take on this subscription for you.
What are the benefits of Xero?
There are various benefits of using Xero, including what is listed below:
- Payroll is built into the program and has an automatic Superannuation feature if you are subscribed to the Premium package;
- Has the most number of 3rd Party apps that can integrate with the software;
- Includes an “Assurance Dashboard” to allow you to see quickly if anomalies occur in transactions. For example: if the same bank account is attached to several suppliers, this may be an employee defrauding your business;
- You can have the same name set up for both a Customer and a Supplier to see all of their transactions on one screen;
- Offers a capable estimating/quoting/order process that ties into AR invoicing smoothly; and
- Provides you with unlimited users and you can specify what roles each user has access to in the Xero file.
What are the limitations of Xero?
Even with the included benefits, there are some pitfalls with Xero:
- Inventory management is not a strong feature of Xero;
- Xero has a limited Bank Reconciliation feature – there is no bank reconciliation finalisation process to close out the month or to double check the transactions once they are processed through the bank feed; and
- Xero’s search function is not as advanced as QBO’s.
How much does Xero cost?
Like QBO, there are 3 subscription offerings for a Xero file:
- Starter at $29 per month;
- Standard at $59 per month; and
- Premium, starting at $76 per month for up to 5 employees*.
Each plan has varying features, and we can help talk you through which plan best suits your needs or go to the Xero website for further help.
Please note: Davidsons does offer a 5% discount on Xero prices if we take on the Subscription for you.
What are the benefits of MYOB?
Similar to QBO and Xero, there are many advantages of using MYOB including:
- Inventory management is superior to both QBO and Xero in the AccountRight version of MYOB;
- The reporting functionality in MYOB far outweighs that available in QBO or Xero; and
- Unlimited payroll is standard with MYOB Essentials and AccountRight.
What are the limitations of MYOB?
Despite offering superior features, MYOB has the following drawbacks:
- MYOB Essentials does not allow User roles to be differentiated so that different users can have different levels of access. All Users have access to all areas;
- Not as initially user friendly as QBO or Xero but once you learn your way around they are quite similar; and
- Significantly more expensive than either QBO or Xero for the same level of features.
How much does MYOB cost?
MYOB has 4 plans available, each with different offerings:
- 2 plans sit under the Essentials banner, being MYOB Business Lite at $28 per month and MYOB Business Pro at $53.00 per month; and
- 2 plans sit under the AccountRight banner, being AccountRight Plus at $130.00 per month and AccountRight Premier at $160.00 per month*.
Again, we can assist in helping you work out which plan would suit you best, or you can go to the MYOB website for further information.
*Please note prices quoted above are correct at the date of this article being written (October 2022).
Which accounting software should you choose?
Choosing the right software for your business can help drive it forward, so the decision should not be taken lightly. Undoubtedly you will meet people in the course of setting up your business that will give you their opinion on which software you should use. By all means, listen to what they have to say as user experience is a great advertisement for each product, but we would recommend that you look closely at what you are wanting to achieve with the software, who the users are going to be, and what the benefits of moving to one over the other will be.
And of course, we are here to help as well! To get in touch for a no-obligation consultation with one of our bookkeepers, contact us on (03) 5221 6399 or at firstname.lastname@example.org.
Disclaimer: The information provided in this article is factual in nature and objectively ascertainable and, therefore, does not constitute financial product advice. Importantly, the factual information that has been supplied does not take into account your personal circumstances, objectives or goals.