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Zoho Books – a so-so cloud accounting solution

I was contacted recently by the folk at Zoho Books and asked if I would take a look at their cloud-based accounting software which I hadn’t previously reviewed. In January this year, Zoho released its Australian version of Zoho Books to include the GST worksheet for preparation of Australian BAS so although there is not yet an Australian Payroll module, I decided to have a quick look at the product.

Background – Worldwide and across all products, (includes Zoho Books, Zoho Inventory, Zoho Subscriptions, Zoho Expense and Zoho Invoice as well as apps for sales and marketing and other business processes) Zoho has over 15 million users with the majority based in the US.

Zoho Books was launched initially in 2011 and was given a major revamp in January 2014. In September last year the influential US-based Sleeter Report nominated Zoho Books as the best micro and small business online accounting software for customer payments in terms of flexibility, so it has some solid credentials.

Functionality – I was pleasantly surprised to find in addition to the standard accounting functions, the product (Professional version) came with:

  • Purchase Orders
  • Sales Orders
  • Estimates
  • Retainer Invoices

making it a reasonably mature and comprehensive solution.

Missing however (as well as Payroll) were:

  • Fixed Assets
  • Budgets

making the product better suited to the micro end of the small business market.

Listed below are some of the features I found to be of particular benefit and some of the features that were either missing or compared less positively with similar products.


  • Zoho Books supports Two Factor Authentication to reduce risks of unauthorised access – this was introduced last year in Xero and should be coming this year in QBO.
  • I can do part delivery of a purchase order (not yet available in Xero).
  • It does have multi currency and I can run reports on Realised and Unrealised Gains/Losses.
  • Reports can be scheduled and emailed to intended recipients.
  • Customised workflows based on business requirements can be set up based on Events and Dates.


  • Bank Feeds are all via Yodlee, there are no direct/partner bank feeds.
  • Once a GST report has been generated, it is not possible to change any of the GST settings, including changing the basis between cash and accruals which could be a limitation where a business is required by the ATO to change.
  • There is no support for any other taxes that an organisation may need to report to ATO including W1 and W2 and WET, LTC, FBT, FTC etc. However as there is no automatic link to lodge the BAS, this is probably not likely to cause much pain.
  • Periods can be locked but unless this is done, there is no way to identify transactions that may have been posted to a period for which the BAS has been lodged.
  • It is not possible to generate ABA files for bulk payment of suppliers, this feature is on the roadmap although no delivery date is available.
  • It is not possible to assign a default GST code to an account in the chart of accounts. This can be done for a customer but not a supplier and so opens the system up for user errors.
  • Sales Invoices can only be entered using items, not coded direct to an account in the chart of accounts.
  • Only a few reports can be run on a Cash or Accruals basis.

Several of these negatives relate to GST and given this functionality is a relatively new addition to the product, we are likely to see enhancements in subsequent releases.

Add-Ons and Integrations – The plethora of third party apps we see with Xero and QBO for example are not available with Zoho, mainly because Zoho has its own native applications including Inventory, Projects and CRM. However there are links with a number of payment gateways including PayPal and Stripe although not eWay.

Expenses can be uploaded into Zoho Books via Dropbox, Evernote and OneDrive amongst others.

Mobile – I didn’t try this out but mobile apps are available to track time, create invoices and run reports.

Pricing – the product compares fairly well with QBO on pricing. The Professional Plan which includes Purchase Orders, Sales Orders and Inventory, compares best to the Essentials version of QBO and costs around $29 a  month, although if you pay for a year in advance you do get two months free and this does include unlimited users. There is a Basic Plan at $9 a month and Standard at $19 a month for an organisation requiring reduced functionality. But given there is no Payroll in these prices, this would need to be factored in if required.

Support – pleasingly there is a telephone number for Support in Australia which is available ’24 x 5’ as well as Live Chat, access to an online guide, email support, videos and a User Forum. Hopefully meeting everyone’s needs.

If you need an advisor to assist, there is a link to a page listing accountants and bookkeepers but once there, all advisors were in alphabetical order by business name, regardless of country making it somewhat challenging to use. (I only found one in Australia and one in New Zealand).

Summary – There are a lot of positives to the product however it doesn’t provide any significant functions or features not currently available in similar products such as Xero and QBO. These two are already fully customised for the Australian market with full support for GST, ABA files and Payroll. So I couldn’t find a compelling reason to recommend Zoho Books over these  products especially as there isn’t a wealth of accounting professionals to support a business using the product. However businesses already using Zoho CRM or other Zoho products may consider Books to be suitable for their accounting requirements and take advantage of the integration.

The largest base of subscribers to Zoho Books is in the US where the market is much larger and it may present as the best alternative to QBO, but in Australia there is already intense competition  between cloud accounting software products relative to market size making entry of a product without any significant points of difference and without a base of accounting professionals promoting it; a significant challenge.

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