Myob Quickbooks Xero Comparison Essay

Which cloud accounting application is best for your business? We’ve tested Australia's major providers to help you decide.

A lot has changed since we last reviewed the major accounting software systems in 2013 – and, without doubt, the biggest change is that cloud accounting applications have become mainstream.

There are still some conventional desktop packages available, but we’ve focused on cloud systems here because they dominate the market now.

This market domination has come about for a variety of reasons. You can, for example, access them anywhere there’s internet available – and often via a mobile app (especially important for business travellers and tradies) – and you can give your accountant or bookkeeper live access to the accounts.

Cloud accounting systems are also increasingly connected, with features such as bank feeds to automate transactions, and support for payment gateways, SuperStream payments and tax office lodgements.

Cloud connections

In fact, connectivity is now one of the most powerful benefits of cloud accounting systems. They can be easily augmented by complementary cloud applications such as point-of-sale, ecommerce, business intelligence and debt chasing.

Because both systems are in the cloud, all you often need to do is link your accounts and the magic happens behind the scenes. This allows you to choose the best customer relationship management (CRM) system for your needs, for example. As long as it integrates with your accounting system, you can have the exactly the same contact details in both systems. In some cases, a third-party integration service such as OneSaas or Zapier provides the connection between the accounting system and the other cloud application.

The growing importance of add-ons means that cloud accounting providers usually offer a catalogue or marketplace of apps – although many require additional subscription payments to those third-party services.

The accounting providers encourage developers to become part of their app ecosystems by providing application programming interfaces (APIs) that enable third-party apps to access various types of accounting data, such as contacts, inventory items, account balances and invoices.

Which cloud accounting system?

While the third-party app ecosystem has become increasingly important part of choosing accounting software, its core functions still have to suit your needs, as well as being quick, convenient and easy to use. So to help you with your decision, we’ve tested and reviewed six of Australia's major small business cloud applications:

And over the following pages, we have a lot more advice and details, which we encourage you to read before making your decision, including:

Remember, these six accounting applications are not the only options. If you’re looking for more features, the likes of MYOB have higher-end versions. For businesses that have outgrown their small business accounting application, an enterprise resource planning (ERP) system may be the next step. At the other end of the scale, we’ve looked at simple invoicing apps (some with useful extras) that might suit very small service businesses.

Next: six cloud accounting systems at a glance

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The most common questions I get asked is Xero vs Quickbooks!

Below is a list of 5 key point when comparing online business software and my summary of each. BUT Lets get one thing straight! If your not on a cloud based accounting program for your business you are already failing! I will also clear up I am a partner with both and assisted in helping hundreds of business with both packages.

Why chose a cloud-based software?

Cloud based software is a great new (or not so new anymore) technology that

  • Saves you time
  • Creates efficiencies
  • Real time information
  • Access from anywhere
  • Shared with all your important stakeholders!

 

You may ask why I have narrowed it down to just the two? (I only work with these two and certified in both) I have ruled out MYOB because is a simple software (made for non-accountants) It does the job, a little too simply for my liking, but is costly. Reckon? its just too clunky and no real competitive advantage over the others. SO lets get into this;


 

1 – SUPPORT – Xero vs Quickbooks online

Xero – Ever tried to phone xero? Good on you if you actually found their phone number, not something they are willing to give out. And if you do email support they reply with the “Help link” that you have probably already tried to navigate your way around! Don’t get me wrong the fact that they don’t have the ability to help business owners easily means that clients call me for help and assistance (YAY for me $$$$) but from a business owners perspective what do you get for your monthly subscription? On a positive they do respond quickly to the emails.

Quickbooks Online – As an advisor or a business owner you have a dedicated phone number for support. (And yes it is answered in this country), and majority of the time they are able to help you with great bookkeeping knowledge. Another advantage is that you don’t need to be a partner to access help videos or training events – a bonus for small business owners trying to learn it themselves.


 

2 – APP & ADD ONS

The outright winner for the mobile app would be Quickbooks online, check out the list below

XeroQuickbooks Online
Create InvoicesCreate Invoices
ReceiptsQuoting
Upload files & photosExpenses
manage ContactsUpload receipts, notes
Reconcile banking and check balancesReconcile banking
payments = Paypal, Square & EzidebitP&L and BS reporting
Recent activity from customers and supplier
Payments from Paypal, Square
(Tablet profiles for invoicing on the go)

In the world of Adds on Xero is the CLEAR winner

Xero has over 500 apps in their marketplace. If there is an add on out their you can be guaranteed that Xero is compatible.

Quickbooks online has under half of this at 224.

For some business’ it is all about the ability of the use of an add on that becomes the deciding factor between the two. Typical add-ons are ecommerce, timesheets, POS systems and Inventory….. someone say inventory to my next point

 


 

3 – Inventory – we have a clear winner!!

Maybe a reason that Quickbooks online has half the apps is that it has double the features of Xero? One of those is that of inventory. In short anyone that phones me and wants to track inventory I will not work with them in XERO. Xero does have an inventory function but it is very limited – if you buy in a box and sell box and only that box with no variations – great use xero. For anything else Quickbooks online is the program for you. A winner for me is the ‘Bundle’ option. It allows you to sell your products by grouping them into a package and then selling it with a discounted amount. I love this feature…stay tuned I am going to do a complete blog on this feature soon.

 

Imagine running a business like this without the use of Inventory Tracking at your fingertips? – I still call australia home


4 – Reporting

Quickbooks was the winner up until about a month or two ago when Xero had a major overhaul of their reporting features and I must say they are pretty close! But if you want a definitive response to who’s reporting Xero Vs Quickbooks online has the most beneficial features for small business I would go Quickbooks online. If you ask the same questions from an accounting perspective it would be Xero!

The ability to drill down in the reports with unlimited customisations is a real winner for me. If we are looking at job costing you can select it just for that job. Xero you are able to do this also but there is a lot more time needed to get the same desired result.

As a bookkeeping providing my clients with monthly or quarterly reporting packs the ability to have automatic emails or reports sent to clients on my preferred day is a real winner! A downfall of QBO reporting is that you can not add payroll reports to your customisations, there are lots of payroll reports available you just don’t have the ability to have these as your ‘favourites’.

Reporting is so important to business, to find out more check out one of our blogs on Business Reporting.


 

5 – Last BUT definitely not the least is PRICE

Xero Vs Quickbooks online price comparison!

Xeros starter pack is $25 – you are limited to 5 invoices, 5 bills, 20 bank transactions and 1 payroll per month!! Come on does anyone use this? It goes up from their $50 is the most common but not if you have more than 1 payroll. Up to 5 payroll and multi-currency is $60, $70 for 10 employee etc – full list here

Quickbooks online starter pack ‘Simple Start’ is $15 unlimited invoices, banking and up to 10 payroll but no ability to manage bills. $25 adds on managing bills, multi currency, reoccurring invoices and multiple users. Top package of $35 is project tracking, purchase orders, inventory and budgeting – full list here

Remembering with both of these they will have discounts and promotions and your bookkeeping partner can help you with this.

Quickbooks online is half the cost. Whilst Xero is the most expensive, when comparing the two for your business I think you need to make that decision on product offerings suiting to your business.


 

In summary when comparing Xero vs Quickbooks Online they both have similar functions I cannot justify such a large difference in price which is accompanied by reduced support.


 

Its not only important to choose the right software package for you! Having the right bookkeeper for your needs is just as important; Here are some articles that will help;

 

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