MYOB vs Xero
Making the right decision for your business
When it comes to giving your business the best tools to succeed, the general consensus is that if you are a small business then an accounting software package is for you. And if you are a larger business then you should go with an Enterprise Resource Planning (ERP) solution like MYOB Advanced.
Unfortunately there is no longer such an easy distinction between the two software solutions as Xero and other accounting software companies imply that their products can do the same as an ERP system. That this is simply not the case and this article aims to debunk this.
Fact: Xero is a simple cloud-based accounting program best suited for small businesses – it lacks the complexity to manage larger business processes and requirements. In contrast, MYOB Advanced is complete cloud-based ERP solution which provides powerful, cohesive and end-to-end business management.
You can get a better understanding of the two terms here: “The differences between accounting software and ERP software”.
In this simple MYOB vs Xero comparison guide, we look at the main features of Xero and MYOB Advanced. Please be aware that while both Xero and MYOB Advanced have 3rd party add-on solutions that allow for extra functionality, for this purposes of this comparison we will solely focus on what each product does on its own.
MYOB Advanced is cloud business management software tailored to mid-sized organisations. A single unified platform, MYOB Advanced delivers finance, inventory management, manufacturing and payroll functionality. It includes the MYOB Advanced Business (cloud ERP suite) and the MYOB Advanced People payroll and HR suite.
The MYOB Advanced Business and People suites deliver an end-to-end business management system on a single platform. The benefits of this unified system are realised when information flows between functions, reducing duplication of effort, manual data entry and real-time business insights.
MYOB Advanced eliminates hardware costs, giving you a fully customisable platform for a convenient monthly price. And your online data is securely stored locally, giving you the flexibility and freedom to work the way you want.
Sophisticated financial management
Customer relationship management (CRM)
Business process mapping
Opportunity & pipeline management
Supply chain management & distribution
Mobile workforce applications
Job and project cost management
Business intelligence & reporting
Purchase order management
Service & support automation
Sales order management
Time & expense management
Xero is a simple accounting software solution for sole traders and small businesses. It allows users to take care of basic accounting needs such as automating some ordering and stock processes, creating purchase orders and managing expenses. At a cheap price.
Xero also accepts online payments such as debit and credit cards, and payment gateways such as PayPal from invoices (for MYOB Advanced, this process can be achieved through the award-winning ezyCollect). Like MYOB Advanced, Xero is also a cloud based and can be accessed from any internet enabled device.
Small businesses can view their cash flows, transactions and account details, personal expenses can also be managed with mobile review and approval of each receipt. Xero offers unlimited email support and integration with a variety of systems.
You can also manage personal expenses, business costs, take photos of receipts (working like a basic version of MYOB Advanced OnTheGo).
FEATURES AND BENEFITS
+ Asset management
+ Bank reconciliation
+ Expense tracking
+ Stock tracking
Being a very basic accounting solution, one thing you will notice is that there is a very heavy reliance on graphs to show information. While some users will find this useful, others will see it as a distraction and lacking any real substance.
Choosing between Xero and MYOB
Seeing the bigger picture and making better business decisions
While most accounting software packages are good at what they do, they are limited in scope. So when comparing Xero and MYOB Advanced, the answer will always depend on the size and complexity of your business.
In order to make itself themselves more appealing and affordable for smaller businesses, accounting programs like Xero reduce functionality and features. This also makes the systems easy to use.
The downside? A successful small business will outgrow Xero quickly. Even with all of its third party apps – Xero fails to offer the same level of control, flexibility and precision that a growing businesses need. For example, one of the areas where Xero suffers greatly is inventory management, which is critical for any growing business.
In contrast, MYOB Advanced allows you to manage your entire distribution processes with system-wide stock management – including real-time access lot and serial numbering, expiration dates to reduce waste, transaction reason codes to measure trends and spot problems, the ability to monitor goods in transport between locations, inventory bin/location control, inventory sub-items to simplify tracking and reporting, inventory replenishment suggestions and more.
When it comes to payroll functionality, many small businesses will find Xero’s payroll and basic reporting functionality fine, even great – while larger small businesses will definitely struggle to get everything they need. Again due to a lack of features and flexibility offered.
On the other hand, MYOB Advanced People lets you configure employees with a wide variety of pay items, including multiple wage types and hourly rates with ease. Payroll administrators can automate workflows, generate GL journals and payment batch files effortlessly. It also allows for multiple pay runs to be simultaneously processed. And that’s just the beginning.
Valuing the benefits of moving to MYOB Advanced
INCREASED REVENUE AND PROFIT
+ Increased sales due to better customer service, improved quality, better on-time delivery and shorter lead time
+ Sales and margin improvements due to faster time-to-market for new products and product variants, cost reductions
+ Cost savings, cost avoidances
+ Inventory reduction, including materials, parts, finished goods and work-in-process
+ Increased productivity
+ Reduced scrap, rework, expediting, and wasted materials
+ Less overtime, expediting, premium freight, and additional set-ups due to last-minute schedule changes
+ Improved visibility across the entire business to make faster and better decisions
+ Improved retention and higher productivity from employees who are less frustrated and more effective in their jobs
+ Less panic, disruption, and chaos in the plant and in the office due to fewer last minute changes and surprises; more stable schedules; less expediting
+ Smarter moves in the market – pricing decisions, specials, product releases or changes, inventory deployment, to name a few – due to better information and insight into market conditions, customer needs and competitive activity.
Need more depth than your current system offers?
When you’re just starting out, most decisions are cost-based – and software like Xero can be seen as a good cost-effective solution for smaller businesses. But as the business grows, things get more complicated, and your business needs change.
A growing business should never be restrained or held back by its accounting software. A growing business needs to be agile, flexible enough to counter whatever may come its way. While other systems can hold you back, MYOB Advanced is primed to help you realise your full potential.
So whether you’ve outgrown your accounting software or you’re struggling along with Xero, QuickBooks or Pronto, MYOB Advanced can help. It’s a scalable, adaptable cloud-based business management system perfect for those businesses who have outgrown their off-the-shelf accounting system.
See the bigger picture; make better decisions, plan ahead and grow while saving time and money. View our Free MYOB Advanced Demo>
Start taking care of business with MYOB Advanced
No longer a small business? Want to consider preparing for growth? Already experiencing business growing pains? Take a closer look at what MYOB Advanced can do for your business, fill out the contact form and one of our team will get back to you.
Alternatively, feel free to call us on 1300 553 228 or email email@example.com