Hey guys - it’s your friendly neighbourhood taxman
back again with some more small business tips and tricks.
The sad truth is that many businesses make bookkeeping and payroll errors
that could have been avoided if the business were using a good accounting software.
When all your processes are manual, the volume of mistakes seems to increase.
PLUS, it’s 2021, guys! It’s time to get rid of old school
ledgers and excel spreadsheets and start using the FANTASTIC cloud-based solutions out there.
I know it might end up costing you a few bucks to get the ball rolling but think about how much
you’re going to save when you make fewer mistakes and save heaps more time as a result of that!
So, on that note, in today’s video, I want to introduce you to the three
market-leading accounting software used by millions of small businesses worldwide:
Number one: XERO Number two: QUICKBOOKS
and Number three: MYOB
So, let’s get down to comparing the three of them for you!
So, let’s start with XERO.
Xero has gained significant traction in recent years and it’s been by far the most
user-friendly accounting software, in my opinion.
Xero places a huge focus on educating its users by providing informative
and interesting online training tools and 24/7 online support.
Remember - the tool is only as good as the user so getting proper training and
having access to support is a FANTASTIC feature.
What’s also super great about Xero is that they try to remove
boring accounting jargon and instead use simple terms so that business owners
without an accounting background can easily understand and do bookkeeping by themselves.
For example, instead of the “debit” and “credit”, the software uses “spent”
and “received” when it comes to money.
Xero is a cloud-based software, so there’s also no need to update to the latest version
constantly. Simply access it at a click of your internet browser and logging in!
Another thing that I think sets Xero apart from the rest is their focus on accessibility. So,
anyone with the authorised login details can access the accounts anywhere
anytime as long as there is WiFI - AND this comes at no additional cost.
For those who like having quick access on their phone, there’s a well-developed
application that works on IOS and Android.
AND anyone could use this tool: small businesses, bookkeepers and accountants - YES, we use it too.
And while I could rant and rave about this software all day - it’s also important to
weigh up the potential pitfalls of the program - so that you can make
the best decision on software that can work for YOUR small business.
For example, Xero has a very weak inventory management software, and it’s NOT capable
of automatically calculating commissions as well.
If you want to track your inventory and have multiple payroll structures,
then Xero is sadly NOT for you! However Xero does have a list of software partners that integrate
with Xero and can solve that problem. However, you probably will be paying for that software as well.
Okay, so next I want to have a look at MYOB!
Unlike Xero, which only launched in 2006, MYOB has been around since the early nineties!
We’ve always called it the king of traditional accounting software - but they have also realised
the importance of keeping up with times and are now offering cloud-based accounting software.
MYOB is seriously great for sole traders and small businesses because it can help you do
all the basic accounting tasks like lodging your BAS statement, tracking all your bills,
tracking your GST, and you can issue invoices straight from the software.
It comes with single touch payroll, which you can also use for employees.
But there is an add on feature that allows you to organise your payroll for an
unlimited number of employees, something Xero doesn’t offer!
Xero’s prices also increase depending on the amount of employees your business has.
It’s also great when it comes to managing inventory and tracking jobs. So, with MYOB,
you can track sales and stock across many locations and record purchases
and sales in different currencies. Xero does offer this type of function when it comes to
currencies, but I find that the inventory system and tracking is quite limited compared to MYOB.
With their new cloud-based solution, MYOB has also started focusing on accessibility.
Similar to Xero, you can access accounting records anytime.
But the one BIG problem - which is my absolute PET PEEVE
There are so many upgrades and versions of the software which make it difficult for
accountants to open the file and upgrade the software and access the accounting.
PLUS - all the users will have to make sure that they’ve all updated their software;
otherwise, things could get really messy and the accounting software can break.
However, they’re new to the cloud technology game,
so hopefully, we’ll see some improvement in this aspect soon.
The last awesome AccountRight feature is managing different
business accounts with one username - which is perfect for running multiple businesses.
MYOB will also keep each business separate, but you can prepare business reports for each company
without logging in and out of different software, saving A TON of time. Xero also does this as well!
Before I compare the costs of each software - I also want to talk about QuickBooks.
QuickBooks has similar features with MYOB and Xero.
It adopts a more traditional accounting approach.
It has different product offerings for different sized businesses. For example, Simple Start would
be great for micro businesses. Their Online Plus is great for small to medium size businesses.
They also offer QuickBooks Self-Employed for sole traders,
which is fantastic for people and startups looking for a basic accounting tool.
QuickBooks also offers THE MOST integrations of all the accounting software out there.
There are more than 650 integrations, with 25 of those JUST being payment processing options alone.
So, it definitely offers WAY MORE features than Xero and MYOB.
The biggest feature that QuickBooks offers that Xero doesn’t is inventory
management and complex payroll solutions - including commissions and automatic payroll.
Just like with the other two software - there is a downside. It’s a pretty big one, and it’s probably
because it has so many integrations… it’s just SUPER buggy, and lags and often freezes for me.
At least I think so for the Australian version.
Slow software is the last thing ANYONE wants to deal
with - especially when it comes to accounting.
They also don’t have the most outstanding reputation when it
comes to customer support - and with significantly LESS training tools,
it makes it not very easy for business owners to navigate the software.
I have to admit I have not spent enough time on Quickbooks.
Some of my teammates love Quickbooks so it could be just me.
Alright, let’s have a quick look at the basic costs.
Xero can range from anything from $27 per month for the starter package to $150 for the premium
package, depending on the payroll features and the number of employees you want to add on.
MYOB also starts at $27 per month for the starter, and the AccountRight software is $109 per month.
Quickbooks comes in at the lowest starter price at $15 per month,
and even their premium package is around $52.
You’ll have to add on $10 per month for payroll plus an extra $5 per employee if you’re looking
for advanced payroll - so it definitely is the cheapest option out of the three.
Obviously, you would have to weigh up the cost of having a fast,
effective software against cheaper but potentially laggy software.
If you’re just starting out and finding your feet in managing the books and financial records
for your company, then QuickBooks offers what you need at the most basic level.
But if you want access to 24 hours support and great accessibility,
Xero could be the software for you.
And I think MYOB is a good medium between the two - and with them
finally introducing a cloud-based system - it’s definitely a great option to consider.
MYOB has phone support which is a big plus for businesses who
want a personalised service rather than ticket and emails for support.
This video was only intended to give you some guidance on
the software and compare what each one offers.
So, you’ll want to consider getting personalised advice from an accountant
or advisor - if you’re going to run the software yourself.
Our team at Box Advisory Services is certified to offer training for Xero,
MYOB and Quickbooks and so if you’re needing some help deciding which software to go with,
how to set it up and how to manage it all, make sure to give us a shout!
Otherwise, that’s it from me. Make sure to like and subscribe for more accounting tips.
Until then, guys! Thank you very much. See you guys next time!