MYOB And Xero Essentials Comparison Chart of Features Solution

Question: Comparison between MYOB and Xero. Answer: Introduction The report is being written for our client Mr. David who is going to start his own company Sporty U and requires accounting software for his business. The objective of the report is to compare two of the best accounting softwares MYOB and Xero based on their modules, features, ease of use, security and costs and suggest to the client which software is better for him depending upon his accounting needs. Modules and Functions The most important modules for accounting software include sales, purchases, repeat sales and purchases, inventory management, debtors and creditors management, bank reconciliation and payroll. Sales The sales module of MYOB has a complete sales system which incorporates sales quotes, orders and invoices whereas Xero only has draft invoices and no quotes functionality. The sales invoices are sent directly to the customer from the browser based program under Xero, one need not have the email program installed and it can be sent from any device whereas for MYOB, the invoice email will be sent only from the desktop where the program is installed. Xero provides the facility to users to receive payments from their customers on the spot via paypal or eWay and the invoice is paid off within the software. This way the client can have a live view of the debtors. This payment feature is not available with MYOB; however the invoices can be receipted against a large number of invoices both old and new. Under Xero, the invoice receipting is done through bank reconciliation where the customer is searched for and ticked off for receiving payment against the respective invoice. Purchases Both the softwares enable payment to suppliers via an ABA file uploaded to the bank and the remittance advice is emailed to the suppliers. However, for Xero the mail does not require installed email program whereas MYOB requires it. Repeating Sales and Purchases Both the softwares allow creation of a recurring invoice or bill and repeat this automatically according to the time frame given, however the difference lies in the performance of the functionality. Under Xero, it is always on i.e. whether the user is logged in or not, the repeat invoice/bill is automatically performed on the due date whereas under MYOB, the user needs to be logged on to perform the repeat invoice/bill. So if the user has not logged into MYOB for a month, the repeat invoice/bill will not be performed, hence delaying the process. Inventory Management MYOB has a better module for inventory management with complex functions whereas Xero has very basic inventory functionality, the complex functionality can be provided by Xero but with add on programs which require separate logins. The company is said to be working on this module further. Bank Reconciliation The most distinguishing feature of Zero is its bank reconciliation screen which makes the reconciliation very easy for the clients. Power tools in Xero make it very easy to reconcile accounts for general users also and the reconciliation is done on a daily basis instead of monthly. However, the bank reconciliation functionality of MYOB is not that great, though the company tries to provide similar functionality to that of Xero, however it is not even near to Xero. Payroll The payroll module of Xero is better than MYOB in some of the important features like running the payroll of the employee according to the calendar and also the tax is applied accordingly whereas in MYOB the payroll can run for n number of times which results in tax being applied on a wrong basis. Both the softwares have timesheet function but MYOB has an additional feature where it creates time billing thus saving efforts of separate timesheets and invoicing. (digitalfirst, 2014) Also the subscription for MYOB is for unlimited number of staff but for Xero subscription is for number of current staff and will increase with increase of staff members. Ease of Use Xero is clearly a winner in case of ease of use. The most distinguishing feature of Xero is the dashboard it provides which is very crisp in providing information of the financial situation. The dashboard shows all important information like outstanding invoices, upcoming bills, bank balances and expenses in a very appealing way. Another important feature is the browser based approach that Xero is which lets the user access the software from anywhere and with any device unlike MYOB which is to be installed on a desktop and has to operated from there itself. The performance of Xero is faster with respect to page loading whereas MYOB is pretty slow. Only one activity can be performed in MYOB, whereas in Xero, various tabs can be opened and while a report is being loaded, a sales transaction can be created simultaneously. (Joass, 2015) Security and Control Both the software has security of the data by creating backups in the cloud. Since Xero is not required to be installed in any system and is a browser based program, all the data is stored in remote servers and if one cancels their subscription from Xero, the data is available in the server for seven years to download. Under MYOB, the data can be downloaded from MYOBs cloud after installing Account Right Live. (Scottpartnerts, 2015) Report Availability Both the softwares provide the basic reports like profit and loss account, balance sheet, and bank reconciliation, ageing receivables and payables and inventory reconciliation. (Ling, 2015) However, Xero provides the reports on a live basis i.e. t does not wait for the month to get over to provide the reports, rather reports can be prepared anytime of the month. Also it prepares budgets and compares the results with actual performance to show deviations. Costs MYOB Account Right Live starts at basic $30 per month and standard $43 per month and Xero basic version is for $25 per month which has limited number of transactions and the standard fees is $50 per month for unlimited transactions. Recommendation From the above analysis, it can be concluded that Xero is most suitable to David looking at his needs. The software is easier to use and is faster. Also the work of David requires him to be overseas most of the times; hence Xero is more suitable in such a case. The software is capable providing complex reports on a live basis and the dashboard gives a crisp summary of the business operations. Currently Sporty U has only three employees and the business is yet to commence, hence David could opt for the basic version which has a cost as low as $25 per month. Thus, Xero is also cheap in terms of current requirement and faster and more convenient to use. References Digitalfirst, (2014), Xero vs MYOB AccountRight Live Comparison A Second Opinion, accessed online on 30th May, 2016, available at https://www.digitalfirst.com/xero-vs-myob-accountright-live-comparison-second-opinion/ Ling, A., (2015), MYOB Workbook, School of Accounting and Finance, Unitec Institute of Technology Joass, M. (2015), Has Zero Already Beaten MYOB in Australia?, The Sydney Morning Herald, accessed online on 30th May, 2016, available at https://www.smh.com.au/business/motley-fool/has-xero-already-beaten-myob-in-australia-20150312-142820.html Scottpartners, (2015), Xero vs MYOB : Which Will Work Better For Your Business?, accessed online on 30th May, 2016, available at https://scottpartners.com.au/xero-vs-myob-will-work-better-business/