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Should I remain with MYOB or switch to Xero?

Last week I looked at the differences between QuickBooks Hosted and MYOB AccountsRightLive. Both these solutions are the desktop software available as a cloud option. However in the time that it has taken for MYOB to launch its flagship product in the cloud (the more basic product – MYOB LiveAccounts – has been in the cloud for a few years) Xero has been luring MYOB clients with its promise of ease of use, useability and flexibility. But now that MYOB is about to launch AccountRightLive, there is a viable alternative for business owners, bookkeepers and accountants who want to remain on MYOB and also enjoy the flexibility that the cloud can offer. So should you join those 50-60,000 MYOB customers that have already transferred to Xero or should you stay with MYOB?

There are a number of key points of difference to consider when making the decision:

Firstly with MYOB you can switch between the cloud and the desktop at any time, Xero however is a cloud-only product, accessed via a web browser and an internet connection. Some people may like the flexibility of being able to switch between the two, taking offline backups etc. and others are happy with to have internet–only access.

MYOB is also allowing for up to 5 concurrent users, a welcome addition for users on Plus and compares well with the unlimited users for Xero.

With MYOB, you still need to have the software installed on the device accessing the company file, this means that you will have to continue to install upgrades. As Xero uses a web browser, no installation is required. Many small businesses are looking for a hassle-free existence with a full software as a service model which is what Xero provides.

However, I believe that functionality must be a major driver in product selection decision. MYOB has been around for many years and over time has built up some industrial strength functionality. Xero has only been around for 6 years (less in Australia) and whilst new releases with new features come out every couple of months, it still has a way to go to catch up with the in-depth functionality of MYOB. If you are thinking of switching to Xero, you need to consider if all important functionality requirements can be covered in Xero, both now and in the future.

If your business has some more sophisticated processes such as Job Costing, Purchase Order tracking then you are probably going to be better staying with MYOB since although Xero has workarounds, they are not as streamlined as MYOB.

If you hold inventory for buying and selling, then you need to remain on MYOB, Xero does not have an integrated inventory solution, there are plenty of add-ons available but why go for an add-on if you can have an integrated solution?

Xero does now have a reasonable integrated payroll solution but again, if you have some more sophisticated requirements such as TOIL, RESC etc, you should carefully review how well Xero will handle these.

The number one efficiency feature with Xero is its bank feeds. You can directly download transactions from your bank accounts into Xero and through some sophisticated but easy to set up rules, Xero will suggest the correct postings for the transactions – this is a powerful feature that can save several hours of data entry but is probably more suited to the micro business than the small business.

One additional point to bear in mind is that because you have a subscription to use Xero, if you discontinue paying, access to your data will be discontinued. With MYOB you can still run the software on the desktop.

So if you have a fairly simple business model, no inventory, straightforward payroll and are comfortable with a cloud-only solution then test drive Xero – you could well find that factors such as the bank feeds clinch the decision for you. But, if your business model is more sophisticated, you are still attached to a terra firma option or you need inventory then you are better sticking with the software you know. For all shades of grey in between – further analysis may be required to make the best decision for your business.

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