BUSINESS SOFTWARE COMPARISON
Xero vs MYOB
Xero is a simple cloud accounting program for sole traders and small business owners. MYOB Advanced is a cloud ERP for larger and more complex businesses.
Xero is known as off-the-shelf software, which you simply purchase and use. Whereas MYOB Advanced Business is a complete business management system that also offers payroll and workforce management capabilites all in one cohesive solution for fast-growing and medium to larger-sized businesses.
Xero is a simple cloud-based accounting program best suited for sole traders and micro/small businesses. This target market works well for businesses like Xero because they lack the ability to manage more complex business processes that medium to larger-sized face. In contrast, MYOB Advanced Business is a complete cloud ERP solution is a powerful and cohesive integrated business management that features payroll and workforce management capabilities.
When you are looking for the best software for your business to succeed, the general consensus has always been that “off-the-shelf” software packages are best suited for sole traders and small businesses. The term “off-the-shelf” basically means something you could go into a store and buy off the shelves.
As previously stated, if you were a small business then an accounting software package would be your best choice traditionally. And if you were a medium to larger-sized business, then you would go with an Enterprise Resource Planning (ERP) solution like MYOB Advanced Business or its predecessor MYOB Exo.
Unfortunately, it is no longer so easy to distinguish between the two software solution types as “off-the-shelf” software companies have begun to imply that their products can do the same as an ERP system. Before we go any further, we need to clear this misconception up. This is simply not the case.
In this blog, we will look at the key features, functions and target markets of both Xero and MYOB Advanced, to get a better understanding of which product is best suited for which business. Please note: for the purposes of this blog we only focus on what each product does on its own, forgoing add-ons and customisations.
Xero can be considered a basic accounting software solution for sole traders and small businesses. It allows you to take care of all your basic accounting needs such as automating stock processes, creating purchase orders and managing expenses. And it does this at a cheap price. Which is great for a sole trader or small business.
Xero also accepts online payments such as debit and credit cards, and payment gateways such as PayPal from invoices. Like MYOB Advanced, Xero is also a cloud based and can be accessed from any internet enabled device, which is great.
Small businesses can view their cash flows, transactions and account details. You can also manage personal expenses, business costs, and take photos of receipts – all functions performed by MYOB Advanced mobile OnTheGo app.
Xero offers unlimited email support and integration with a variety of systems. As you see from the key features in the table, the key features on offer are very rudimental. For a fast growing business, this can actually work against you as it holds you back from reaching your true potential.
+ Asset management
+ Bank reconciliation
+ Expense tracking
+ Stock tracking
Another important point to take note of: 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 may like the look of this and find them useful, the majority of users will see it as a distraction and lacking any real substance.
Start, Survive, Succeed
MYOB Advanced is cloud business management software tailored for medium to larger-sized businesses and organisations.
A single integrated platform, MYOB Advanced encompasses ERP, payroll and workforce management in one complete solution that delivers finance, inventory management, sales, manufacturing, payroll and workforce management functionality.
It includes MYOB Advanced Business (cloud ERP suite) and the MYOB Advanced Payroll and WorkForce Management components. It delivers an end-to-end business management system on a single platform. All from from the cloud.
The benefits of this unified system are realised when information flows between functions, reducing duplication of effort, manual data entry and realtime business insights.
In addition, MYOB Advanced eliminates hardware costs, giving you a fully customisable platform for a convenient monthly price. And your online data is securely stored locally by Amazon in AWS data -centres, giving you the flexibility and freedom to work the way you want.
MYOB Advanced also features industry editions such as Manufacturing and Construction, which are uniquely different – bringing together business critical functions across ERP, payroll, and workforce management on a platform that intelligently connects business processes, workflows and staff within your business.
Business Process Mapping
Supply Chain Management
Job + Project Costing
BI + Processing
Service and Support Automation
Time + Expense Management
+ 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 in the business to make faster and better decisions
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
+ 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.
More than just beautiful business
Where MYOB Advanced Wins
While most off-the-shelf accounting software packages are good at what they do, they are limited in scope. So when deciding between 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 sole traders and smaller businesses, accounting programs like Xero reduce functionality and features. They have to in order to keep the price down. This also makes the systems easy to use.
The downside? A successful small business will outgrow Xero quickly. There is no question about this. We actually see it all the time. Even when you take into account the fact that Xero users will continually have to licence and buy more and more third party apps just to keep up with growth, Xero simply fails to offer the same level of control, flexibility and precision a growing business needs. For example, one of the areas where Xero suffers greatly is inventory management, which is critical for any growing business. No matter how many third party apps you install and pay for monthly, you will never get the same level of functionality an ERP offers.
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 –its cheap, and does the job. It is our experience that fast growing small businesses definitely struggle to get everything they need in this area. Again due to a lack of features and flexibility offered.
On the other hand, MYOB Advanced Payroll 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. We haven’t even mentioned the onboarding process automation which come with MYOB Advanced Workforce Management. And again, these are just some of the features of MYOB Advanced.
Still deciding between Xero and MYOB?
Need more depth than your current system offers?
When your business is just starting out, most decisions are cost-based – and software like Xero will be very attractive thanks to it being a cost-effective solution. It doesn’t have all the bells and whistles but it gets your basic needs done. As the business grows, things get more complicated, and your business needs change or be held back.
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, and know your data is 100% accurate. View our Free MYOB Advanced Demo>
We have trust in the MYOB brand and as it turned out their Advanced solution really did have everything we needed.
The functionality of MYOB Advanced met our many needs including customer special pricing, advanced stock management, a customer portal as well as CRM.