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MYOB – the Essentials

One of the disadvantages of moving to the country is that unless I travel to Sydney, I have to wait patiently for accounting software roadshows to visit regional NSW. MYOB Incite visited Port Macquarie in early March so I was able to hear their plans for 2016 and experience how ‘Tomorrow begins Today and Today defines Tomorrow.’

MYOB sees accounting as having three strands:

  • transaction processing,
  • compliance,
  • advisory,

and provides tools to assist partners and businesses to facilitate management of each of these. Transaction processing is all about automating manual processes and making use of real-time access to data and MYOB is already well down the track in providing quality solutions to address this. Compliance is about reducing data cleansing, increasing collaboration and streamlining statutory reporting and it is here we should be seeing some significant gains in 2016. Advisory is largely a change in mindset to client servicing that the accountant needs to embrace to stay in the race.

The automation tools provided recently include enhancements to bank feeds and here MYOB claims to provide almost 100% accuracy due to directly contracting with over 130 financial institutions in Australia rather than using Yodlee feeds (Xero uses Yodlee for the majority of the financial institutions it supports). Other tools include Smart Bills – a product still in its infancy but that will stream line the Accounts Payable function, automatic tracking  of invoice status across a range of devices, and Pay Direct – a mobile solution for customer invoicing. This is a solid set of tools but still expect to see ongoing improvements including direct Amex feeds which are scheduled from 31st March 2016.

On the compliance front – MYOB is set to deliver some serious enhancements in 2016. From 1st July a new dashboard will be available to partners to centralise client activities and provide greater visibility on client activities. The previous accountants’ software of MAS and  Accountants Office will be replaced with a New Ledger which will be agnostic to the client software providing accountants with more flexibility to work with clients who use non-MYOB software. Xero for example uses an industry standard format in its export files making it straightforward to map and bring into the MYOB ledger.

MYOB has for decades been the accountants favourite accounting product simply because it is has strong underlying accounting principles, uses accounting terminology, has features that accountants love such as year end close (everyone else hates this) and has been suitably conservative for a hitherto conservative  profession. Xero came along some eight years ago and commenced disrupting this happy existence, transformed accounting software into a tool that could be used by non-accounting professionals, ‘turns number crunching into beautiful business’, provided a previously unparalleled user experience and listened to business owners and accountants. It took MYOB a while to realise the disruption had become the building blocks of a brave new world but now MYOB is fully committed to providing an equally positive experience for accountants as well as business owners.

The Accountants dashboard and new ledger that MYOB will be delivering this year should result a couple of gains to accountants: – it will demonstrate that MYOB can deliver an accountant experience to rival Xero and will be a great opportunity to entice those accountants that to date have not whole heartedly embraced the cloud, into the 2nd half of the second decade of the third millennium.

So accountants are taken care of and there has been only positive feedback to the enhancements but what about businesses? Interestingly, MYOB stressed that MYOB Essentials not the fully featured AccountRight is their platform of choice for the future. Although MYOB did deliver enhancements to Essentials in 2015; apart from ABA files for Payroll and SuperStream compliance, the enhancements were all features that enabled businesses to take advantage of an online accounting environment rather than enhancements to the core accounting functions. There remain a number of fairly sizeable gaps in the functionality of Essentials that need to be addressed before the product can be considered in the same league as Xero or QBO.

In terms of core accounting functions, there has been little change to MYOB Essentials since I first started reviewing it more than three years ago (although Budgets are now in Beta phase). Specific functionality gaps include:

  • Multi currency – you cannot invoice customers or receive invoices from suppliers in a foreign currency, or have a foreign currency bank account.
  • No ABA files for supplier payments – the feature was delivered in 2015 for paying employees but not extended to suppliers.
  • There is no Job Costing functionality other than via a third party app which is unexpected because the Taxable Payments Annual Report required by ATO for the construction industry is available.
  • Payroll remains very simplistic for example payroll schedules are not available, you cannot specify the posting accounts for payroll transactions, and items such as bonus and commission automatically include Superannuation (not always needed).
  • There is no Inventory module.
  • There is no Fixed Assets module.

So whilst MYOB is using cloud technologies to deliver transaction processing automation and real time data access for businesses as well as providing quality compliance tools for accounting professionals, the product that is to be its flagship for business owners remains far from comprehensive in its functionality. MYOB is budgeting for $50 million R&D expenditure this year so hopefully some of that will be channelled into expanding the functionality of MYOB Essentials so that it does take on more of the capabilities of AccountRight or even Xero and QBO.

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