Cloud Accounting Overview 2015: MYOB Essentials vs Xero vs Intuit QuickBooks Online vs Reckon One

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The world of online accounting software has already seen much activity in 2015. MYOB Essentials, Xero, Intuit QuickBooks Online, Reckon One, Saasu – the choice for small businesses is the best it’s ever been.

So how do the various cloud accounting software measure up at the start of 2015?

 

MYOB Essentials

I like the rebadged MYOB Essentials, it is a neat, concise and easy to use piece of software. Now that it has the BankLink service integrated into the program it makes it very easy to automate bank data. It is priced reasonably at A$29 per month without payroll and $40 per month with. However it lacks a number of key features that we see in Xero and QBO including:

  • No ABA files for either payroll or suppliers.
  • No user roles to specify function access.
  • No classes (QBO) or tracking categories (Xero).
  • Limited user control over posting payroll into the accounts.
  • No inventory (Xero’s inventory module is due in a few weeks).

So it is still positioned very much at the micro end of the market but is easy and intuitive for a first time user with no accounting experience.

 

Xero

Xero continues to delight. The company walks the talk of customer engagement and user experience. It has a great employee portal, and the auto-superannuation payments removes the greatest admin hassle of every small business employer.

(I recommend the premium option of Xero even to employers with just one employee – the extra $10 per month payment is worth its weight in gold).

It is packed with many added extras such as Xero Files, the online B2B customer/supplier invoicing and many other features that support business operations. The product is possibly less intuitive to the first-time user and reporting still has a way to go but I still admire the company’s visionary focus – it really does create the answer before the problem is articulated.

 

Intuit QuickBooks Online

QBO is about to lose its competitive edge over Xero when Xero releases its inventory module. QBO came fairly late to the Australian marketplace, Xero had already achieved incumbency and Intuit had to search out the second wave of accountants and customers that hadn’t climbed on the Xero bandwagon.

The exact figures for Australian customers is not known but in their latest press release Intuit announced out of 841,000 global paying customers for its cloud accounting software, 127,000 were outside the US. (In December Intuit revealed it had sold 7,000 subscriptions in total for New Zealand and Australia.)

Xero has said it is close to 200,000 paying customers in Australia alone so Intuit certainly some challenges to close this gap in here. During 2014 however, a lot of effort went into the Australian version of the product so that many annoying small glitches were ironed out, especially in the areas of bank feeds and GST.

The final icing on the cake came with the release of ABA files in December. With increased numbers of staff and improved functionality, Intuit is looking good for 2015 – we just need to see it notch up some runs.

 

Reckon One

Reckon One is somewhat mystifying. It lacks the key payroll module yet at the same time has a time and expense module which tracks billable and unbillable time and expenses against clients and projects, and it also has a full-blown budgets module. So it is a mix of in-depth features and omissions.

It does however have the most illuminating dashboard which is visually appealing, uncluttered and with widgets that are user definable and relevant. (This feature has been announced for Xero in 2015.)

From a pricing perspective it is competitive but a little difficult to compare as payments vary depending on specific functionality selected. It remains to be seen whether Reckon One will become a valid option in 2015.

The end game is of course to retain existing customers while also gaining new ones. There are three main sources of new customers:

  1. Customers new to accounting software – either start-ups or moving off manual systems.
  2. Customers migrating from desktop to cloud within the same supplier, largely MYOB and Reckon.
  3. Customers converting from one supplier product to another.

Customer retention is something MYOB has grappled with over the past few years. Historically software suppliers such as Xero and Saasu have said that the source of new customers has been about 50 percent customers new to cloud accounting and 50 percent converting from another supplier’s product. More recently Xero has said about 60 percent of its new paying customers are conversions from another product (35 percent from MYOB).

So the marketplace for customers changing their accounting software is a lucrative source of business for the cloud-only players such as Xero and Intuit, both of which provide free data conversions from MYOB and Intuit also provides free data conversions from Reckon Accounts.

Converting and new customers come from a variety of sources and select the new software for a variety of reasons. The main sources are recommendations from accountants or other businesses, or from individual research. And the main reasons for converting to another software product are disenchantment with existing supplier or software, finding the current software too difficult or not responsive enough to the needs of the business.

All these factors mean that now more than ever software suppliers must be fully engaged with their customers, they must understand and meet (or even anticipate) their requirements. So 2015 is shaping up to be an interesting year. Expect a lot of moving and shaking.

This is an edited version of a post that first appeared on Cloud Accounting Buzz.

About Margaret Carey

Margaret Carey is an accounting sofware specialist and director of consultancy Business Eez. She is an accredited partner with QuickBooks, Xero and Saasu and has worked with financial management software for over 20 years.

Comments
4 Responses to “Cloud Accounting Overview 2015: MYOB Essentials vs Xero vs Intuit QuickBooks Online vs Reckon One”
  1. Thanks Margaret for another great review.

    One thing that stood out for me though is saying MYOB Essentials now “has the BankLink service integrated into the program it makes it very easy to automate bank data” – it’s always had those feeds – since day 1 which is about 4 or so years now (it’s been so long I don’t remember exactly) and it is by far the easiest, quickest product to use if you setup and use the bank feeds properly – which is super easy.

    This product literally allocates your transactions while you sleep.

    Bank feeds are 100% reliable…which to me is a key selling point. In the millions of bank feed transactions I’ve had using Essentials I’ve never, ever had a missing or duplicate transaction – 100% accuracy that you can trust.

    I agree ABA files would be very useful but for the majority of the market I think it works best for they probably wouldn’t use it enough, if at all, for it to be a deal breaker.

    I wish MYOB promoted this awesome product much more – it’s a phenomenal system that is totally intuitive and requires almost no training.

    It gets my vote of the product to watch in this market space.

  2. Nice high level comparison Margaret although not comparing apples with apples can prove misleading.

    QuickBooks Online (QBO) payroll component has automated super payments, we are 100% SuperStream compliant and we “automatically” calculate the under 18 and + 18 super threshold automatically (this is something that none of the cloud player do). In addition we also “automatically” calculate the Quarterly “max super contribution base” which is also something not provided by any other cloud accounting system.

    The list goes on and on….

    KeyPay released 252 New Features / Enhancements in the calendar year 2014 with 29 of these relating directly to the delivery of payroll in QBO.

    Perhaps your next project should be a “real” payroll comparison of the cloud accounting system market – we would be happy to participate.

    • Margaret says:

      Thank you for the comments Richard. I fully agree with your comments on super compliance. It is very hard for any small business to keep up with all the regulatory requirements so to have them embedded in the software is invaluable. I will think about your suggestion for a payroll comparison – it is a huge topic. My rule of thumb for business owners is that payroll set up and management takes as much time as the rest of the accounting system altogether – so the time to compare will be huge.

      • Agreed Margaret – happy to get involved as I think the significant component of online accounting should be compared in a proper manner.

        Let me know if you would like to get involved and I will be happy to provide some suggestions.

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