What accounting software package should a small business use?
What are the things to consider when selecting a suitable accounting software package for a small business?
Hi Phil, the world of today provides businesses with reliable internet connections to leverage the cloud computing environment for fantastic value accounting software. We love Xero because it just works. No fuss, no backups, no tax updates to load, no files to transfer to someone else, live and up to date in the cloud with live bank feeds daily, an ever growing ecosystem of add on functionality (we use Workflowmax for project management). Xero is great for accounting firms like ours, but the beauty for the small business owner is how it can save time and hassles, without the need for anyhting other than an internet browser. iphone? yep. ipad? yep. PC? yep. Mac? yep. Android? yep. It really rocks!
Security and data privacy are important issues and at Xero we're very open about the fact that you need to ask the question of providers about what they do to mitigate the risks. As you can see on our security page (http://xero.com/security/ ) we do a lot to make sure that your data is both well protected and kept private. It's important to note that we provide a level of security and data protection no small business could ever afford to maintain for their own systems - that's the economies of scale that the cloud enables - we can provide bank level security for a low-cost product because we're providing that product to lots of customers.
There was actually an article in CIO magazine just this week on this topic (http://www.cio.com.au/article/441854/_absolute_garbage_comm_bank_cio_dismisses_security_data_sovereignty_cloud_barriers/ ). Basically the CIO of one of Australia's largest banks (Commonwealth Bank of Australia) was talking about how concerns about security in the cloud are "absolute garbage". While we wouldn't use those words to describe these concerns we do believe that moving to the cloud is less about building technology and more about building trust. CBA happens to be one of our partner banks and our banking partners require us to maintain security measures that meet their high standards.
Some more thoughts here: http://blog.xero.com/2011/08/when-cloud-is-not-the-same-as-cloud/
If you are in Australia, hands down Xero is the best accounting solution. After using MYOB, Quickbooks, Sassu, intuit, I have found that Xero has the best offering for today's SME.
Xero is user friendly, secure, flexible and their support is second to none. If you are looking for a solution that anyone can use and that will provide the additional functionality, as your business grows, then xero is your answer.
We recently switched our businesses from MYOB (release 16 I think) to Xero. I have been keen to switch to a cloud accounting package for a while, we looked at Saasu for a while but in the end went with Xero.
For us the bug bear with MYOB was using a dedicated PC just for accounts. Being a Windows PC we had a couple of scares - failure to boot, bluescreen etc on top of that we have a couple of accounts people so sharing the PC was a pain. I have never been a fan of MYOB, years ago when we first started with it the cost I thought was huge, the support poor and the upgrades also expensive. For a small business forking out hundreds of dollars for unexciting software was hard to justify.
Cloud accounting has to be the way to go. We like the small monthly fee which is easily covered. Having our staff access accounts from any PC or Mac, office or at home, is also productive for us. I hear MYOB also have a cloud offering now but to us it was too late, we were already turned off by MYOB years ago.
Things we like so far about our Xero:
- Easy to create great looking invoices.
- Easy recon of transactions by accounts staff and the less account savvy staff members like the Directors.
- Access from anywhere, anytime. This one is a big deal.
- We found a good Xero reseller who transitioned our MYOB across easily.
The only down sides we have found so far, and these are not really huge downsides are:
- Bank feed occasionally stuffs up (this is more a St. George bank issue than Xero) and can be gotten around in the worse case by txn imports or individually keying txns. This only happened once or twice, so again no biggy.
- Support. The first issue I had when my reseller was unavailable meant I had to go to Xero. No support phone number, but they do have great support via twitter. Luckily i'm a twitter user so coped with this method well, but for those who are not may increase the blood pressure slightly. Problems can also be posted on the Xero support system if you are not a twit ;-)
As an accounting and bookkeeping practice we have to use and understand most major accounting software. The most popular are MYOB, Quickbooks and Xero. Having used all three we prefer Xero. In fact we have come to the decision that if a client wants us to do bookkeeping we will only do it on Xero. If a client insist we use anything else we will do so but we find that our prices are at least one and a half times higher.This shows how efficient Xero can be if used correctly.
It is very flexible, very easy to use and bank feeds make the process painless. We have found MYOB Live and Quickbooks online slow in comparison.
The reports that advisors have access to is also good and we find our clients look forward to their monthly or quarterly management reports. They seam to understand them more. We struggle to get decent reports from MYOB or Quickbooks
Our problem with Xero is support - there is only online e-mail support even for advisors and this can be frustrating. We still think it is the best accountancy software at the moment.
Hi Everyone, Let me say upfront I am a certified Xero Advisor and am currently obtaining accreditation on Quickbooks. I have also used MYOB extensively. The single issue that I feel has been missed in this debate is what are the needs of the business in looking at an accounting system. My advice to clients is that they should list what they want from their accounting system then we'll assist them score against all these wants and then a solution will fall out. For example is it Price, functionality such as payroll, inventory management, fixed assets, ability to have more than one person logged on at anyone time or timeliness of support, etc. At this stage I often see Xero coming out as the preferred solution albeit some time when add-ons are considered price may become an issue.
Adam / Phil, could you provide some information regarding data security issues when using Cloud computing for applications such as Xero? I am currently involved in a number of small enterprises which use either MYOB or Quickbooks - what are the pro and cons of going through an accounting firm like MBR as opposed to trying it alone?
absolutely myob, and i'll tell you why.
for small businesses, the no1 reason to even have accounting software, is so that the business owners can access relevant information in order to make effective business decisions on a day to day basis. otherwise they may as well forget about having any software at all, and stick to outsourcing the business accounting functions for compliance only, right?
the next most important considerations (to the business owner) in making this decision, are cost and useability.
whilst there is a small market for software that is 100% browser based, there are significant issues and questions around access to recent backups, ongoing (and indefinite) costs, and most of all our often unreliable internet speeds. at the current time, browser based products also tend to be very limited in functionality, and therefore only really useful for businesses with very basic requirements.
accounting software needs to be customisable also, so that users can generate reports to provide detail that is relevant to their own business - standard generic reporting only gives you the tip of the iceberg and does not allow you to analyse the inner workings of your business at all.
myob covers all the bases. they have a very cost effective, browser based software program (myob liveaccounts) that is superior to it's competitors, as well as being about half the price on a monthly basis, when comparing apples with apples.
for those who require the processing power of a desktop product, the myob accountright range of products are very rich in functionality, and they are also hugely customisable. if you want to network the data you can, and you can also manage your own data storage and backups. best of all you are not required to pay an ongoing monthly fee if you do not wish to, or if you cannot afford to.
and the icing on the cake, the most exciting development in sme accounting software in nz and australia, is the new myob accountright live product. this is a modular, hybrid product, which allows the user to utilise cloud data storage and have multi-user online access if they wish, but they can also pull the data offline and work from their local machine at any time that they wish - the absolute best of both worlds.
in short, where the browser based software may have been a handy stop-gap, myob's accountright live hybrid model is truly the next generation in sme accounting software and our company is proud to endorse myob.
I loathe accounting completely! Maths was never my strong point.
I use Xero. Yes there is a monthly fee, but I find it very easy to use and it generates nice professional looking invoices. I can't get my head around reporting though and when things go wrong it's very hard to get a (useful) response from Xero support.
I have been accredited with both MYOB and QuickBooks (and other accounting software), and now Xero. While Xero does not suit every business, it still gets my vote in the majority of cases.
If you compare Xero to either QuickBooks or MYOB (or other desktop products) on price alone, you may inadvertently choose against Xero. However, Xero brings so much more to a business if it is used in conjunction with an accountant who is pro-active with your business. I (and my clients) love Xero because of the way I, as the accountant, can be involved in a meaningful way in a clients business.
In summary, Xero, but either way, get your accountant involved in the decision.
We love Xero and encourage our clients to use it.
For me Phil, i think it all depends on the type of business they run, what flexibility they need and they may be small now but what happens as they grow. One solution doesnt fit all. Will they need to start upgrading or needing expensive add ons etc which for a small business could mean they are spending $$$ a year on accounting software. Yes, it makes sense to find a solution that is cloud based as getting access to your critical data from anywhare at anytime is vitally important, i just recommend that business owners (and advisor) do there due dilengence so it's doesnt become a mistake down the track.
Hi Phil Khor that's an interesting question.
There are various accounting software packages which most of the small businesses use such as QuickBooks, Zoho Books, Xero, Sage and many more. These software packages offer a broad range of characteristic features for all kinds of small businesses.
I just looked at XERO. First of all it is not as flexible as QuickBooks (I am using currently). Furthermore it is too pricey. I would need the medium Package which is $49 p/m = 588 p/y. Quickbooks costs about $500 one off and it serves me at least 3 years. So $500 compared to $1764 over 3 years. I think MYOB is sort of the same cost as QuickBooks as they are competitors
I have used freshbooks.com which is very simple to use, affordable and integrates to a wide variety of other online tools. I would recommend it for very small to mid-size businesses.
I work for an online Business Coaching, Training and Mentoring company; however we are an offshoot of an accounting firm.
Our accounting division is well established and we still use some old versions of MYOB and Quickbooks for certain clients where it makes more sense.
Many of our other clients we use Xero and have had good results.
For the Business Coaching side of the business, our weapon of choice is CashMAX Forecaster. As the name suggests it is used for cash flow foresting, however it is capable of producing P&L Reports, Balance Sheets and projections for up to 5 years in advance.
http://davidhendersononline.com/tools/Check it out and ask me if you are interested in giving a whirl. We have used this for an array of clients, from a listed company with multiple divisions and locations, to a local sole trading chicken shop.
Xero - hands down!