Choosing the right accounting software for your business is crucial, as switching down the track can be a real headache, not to mention the time spent training your team. With the rise of digital accounting and cloud technology, it is no surprise that more and more Aussie businesses are looking for the best cloud-based solution to streamline their finances. This has led to a surge in sign-ups for platforms like Xero and MYOB.

This guide will help you determine which software suits your business needs best by breaking down the pros and cons of each, situations where one may be a better fit than the other, and sign-up offers to help you make an informed decision. If you have not made the switch to cloud-based accounting yet, there is no better time as it is a game-changer for making your business future-proof.

Two of the most popular accounting platforms in Australia are MYOB and Xero, which is why this guide will focus on comparing them.

Xero - One of the most popular in Australia

Xero was founded close to home in New Zealand in 2006 by tech entrepreneur Rod Drury. Since its launch, it has grown into one of the world’s leading cloud-based accounting platforms, with over 3.7 million subscribers across more than 180 countries, with a large number of those users being based in Australia, New Zealand, the United Kingdom, and the United States.

Xero was designed from the ground up for the digital era, offering a seamless and intuitive accounting experience tailored for small to medium-sized businesses. Its cloud-first approach means businesses can access their financial data from anywhere, making it a favourite among accountants and business owners looking for a flexible and efficient solution.

What sets Xero apart is its automation, user-friendly design, and extensive third-party integrations. The platform offers powerful tools such as automated bank feeds, real-time financial reporting, invoicing, payroll, expense tracking, and multi-currency support in higher-tier plans. With over 1,000 third-party integrations, including payment processing, inventory management, and e-commerce solutions, Xero provides a comprehensive ecosystem for businesses looking to streamline operations. Its modern interface, strong security measures, and focus on innovation have made it a preferred choice for Australian businesses wanting a simple yet powerful accounting solution.

Pros of Xero

Xero is one of the most popular cloud-based accounting platform in the world and so as you'd expect their are many pros to using this platform.

• User friendly - It has an easy to use interface, so its great for anyone to use
• Cloud-based from the beginning - As it was built for cloud it really excells at this and lets you access it from anywhere at any time
• Unlimited bank feeds - A feature that some other compares limit
• Over 1,000 third-party integrations - Making it ideal for those using other software to make your life easier
• Real-time financial reporting - Helping your business stay on top of their cash flow
• Strong security - So your data is secure, this includes 2-factor authentication and encrypted data storage
• Amazing sign up offers - They always run great deals like the current one at the top of this page

Xero’s strengths lie in its cloud-first design, making it a perfect fit for Australian businesses looking for a modern and scalable accounting solution. Built for the cloud from the start, Xero takes full advantage of economies of scale, allowing it to continuously roll out the latest features and improvements. Its automation, ease of use, and extensive integrations make it a top choice for businesses wanting a cutting-edge platform that streamlines financial management and reduces manual workload.

Cons of Xero

While Xero is in our opinion the best choice for most businesses, there are a few occasions when it may not be and as with any business it does have a few small limitations that may not suit everyone.

• Payroll is limited to 200 employees - so it may not be suitable for the largest businesses
• ‍No phone support - Although it has lots of other ways to connect, if you prefer a phone call this may not be the best
• No desktop version - making it unsuitable for businesses that prefer offline access

Despite these drawbacks, Xero remains a top choice for many businesses due to its ease of use, automation, and extensive integrations. However, businesses with large payroll needs or those that require phone-based customer support may need to consider alternative options.

MYOB - Another strong option

Wondering what the acronym stands for... well it stands for Mind Your Own Business and this was founded in the 1980s and has long been a name that many Australians have heard or used.

As this business was set up in a time when accounting was very different to the cloud days it has had to adapt and has since launched a range of cloud-based products like MYOB Business (formerly MYOB Essentials) and MYOB AccountRight. These have helped it to cater to businesses of all sizes.

They have an impressive 1.2 million users who are mainly located in either New Zealand or Australia and the platform is often popular for those wanting one with more of a focus in these countries.

Pros of MYOB

MYOB is a well-established accounting software that has been a trusted choice for Australian businesses for decades. It is particularly strong in payroll and inventory management, making it a great option for businesses who prefer something they've used before or has a payroll focus.

• Unlimited payroll - For those on higher-tier plans you can get this feature, great for large companies
• Strong compliance - With Australian tax regulations, including BAS and GST reporting
• Hybrid desktop and cloud functionality - allowing businesses to work both online and offline
• Phone support available - for businesses that prefer direct customer service assistance

MYOB is a good choice for businesses that require robust payroll and inventory features, as well as those that prefer the option of desktop-based accounting while transitioning to the cloud.

Cons of MYOB

Although MYOB has many strengths, it does have some downsides, particularly when it comes to usability and integrations. Businesses looking for a modern, fully cloud-based solution may find MYOB less intuitive compared to Xero.

• More complex and less user-friendly interface - When compared to Xero in our opinion
• Higher pricing - AccountRight Plus and Premier plans is higher than Xero’s equivalent plans
• Limited third-party integrations - fewer options than Xero, making it less flexible for customisation
• Windows only for some plans - AccountRight desktop version is only compatible with Windows, limiting accessibility for Mac users
• Bank feeds are restricted in lower-tier plans - with Lite limited to two bank connections
• Slightly outdated interface - When compared to other options
• Fewer sign up offers - in comparison to Xero

While MYOB is still a contender, you may want to look into other options for the long run as it may not be the best fit for those looking for an intuitive, cloud-native experience. Its learning curve and reliance on desktop software can be a drawback for businesses wanting a seamless, fully online solution.

Key differences between MYOB and Xero

One of the key differences between Xero and MYOB is how they approach cloud-based accounting. Xero was built from the ground up as a fully cloud-based platform, which means it generally offers you a better more modern experience that allows businesses to access their finances anytime, anywhere. In contrast, MYOB started as a desktop-based solution and has gradually moved to the cloud, meaning some of its features, particularly in AccountRight, still rely on desktop functionality. This makes Xero a more popular choice for businesses looking for a solution that is truly a cloud-native one.

Another big difference is how each platform handles payroll and inventory management. MYOB is a a platform that is fantastic for businesses with a large workforce, as its higher-tier plans offer unlimited payroll. In contrast, Xero caps payroll at 200 employees, which might not be enough for bigger companies. When it comes to inventory, MYOB has more advanced built-in tracking, especially in its AccountRight Premier plan, making it a better option for businesses that manage a lot of stock. Xero, on the other hand, relies on third-party integrations for complex inventory needs.

That said, Xero really does exceed in other areas, particularly with its automation, seamless third-party app integrations, and user-friendly design. Many Australian businesses prefer Xero because it makes accounting simpler and more efficient, reducing the amount of manual work needed. While MYOB is great for businesses that require robust payroll and inventory management, Xero is often the better choice for those who want a modern, easy-to-use platform that saves time and integrates effortlessly with other business tools.

What to consider when comparing Xero vs MYOB

When it comes to making an informed decision between MYOB vs Xero there are a few key factors to consider before choosing the right accounting software for your business.

Cloud-Based vs Hybrid Solution

As mentioned previously, the biggest differences between Xero and MYOB is their approach to cloud-based accounting. While Xero was built as a cloud-native platform, MYOB offers a mix of desktop and cloud options, which may appeal to businesses with more traditional workflows.

• Xero is fully cloud-based, allowing real-time access to financial data from anywhere, making it ideal for businesses that prioritise flexibility and automation.
• MYOB offers both cloud-based and desktop options, which can be useful for businesses that still prefer some offline functionality.
• If your business values mobility, seamless updates, and automation, Xero may be the better choice.
• If you need a mix of desktop and cloud-based accounting, particularly for complex legacy systems, MYOB might be more suitable.

Features and Functionality

Each platform offers different strengths depending on what your business needs. Whether you prioritise payroll, inventory management, automation, or ease of use will play a key role in your decision.

• Payroll and inventory management – MYOB offers unlimited payroll and built-in inventory tracking in its higher-tier plans, which is useful for businesses with large workforces or complex stock management.
• Integrations and automation – Xero provides a wider range of third-party integrations and automation features, making it easier to connect with other business tools.
• Ease of use – Xero’s interface is more intuitive and user-friendly, while MYOB has a steeper learning curve.
• Pricing considerations – MYOB’s higher-tier plans can be more expensive, particularly for businesses that need both desktop and cloud functionality.

Our conclusion: Xero vs MYOB

Both Xero and MYOB offer you a great solution when it comes to accounting software but in our opinion and based off other founders we have spoken to, for most Australian businesses and founders, Xero comes out on top. This is largely due to the fact that Xero has been designed for the cloud from the start, has a better interface, more features and integrations and better offers aimed at founders.

While MYOB has strengths in payroll and inventory management, particularly for businesses with larger teams or complex stock tracking needs we still feel that in most cases Xero will be the better choice for most Australian businesses.

For businesses wanting to try out or sign up to Xero, they are currently running a great offer of 90% off for six months makes it a great time to do so.

MYOB vs Xero FAQs

Some of the more regularly asked questions when comparing these two accounting platforms.

Which is better for Australian small businesses?

There is no simple answer to this, as both Xero and MYOB cater to Australian businesses, but Xero is often preferred for its cloud-first approach, ease of use, and integrations. MYOB, on the other hand, has strong payroll and tax features, especially for businesses needing offline access.

Does Xero or MYOB have better GST and BAS reporting?

Both platforms offer GST and BAS reporting, but MYOB has a long-established presence in Australia and integrates directly with the ATO for simplified tax lodgement. Xero also offers seamless BAS submission and automated tax calculations, making compliance easier.

Does MYOB or Xero handle payroll better?

MYOB has strong payroll features and includes Single Touch Payroll (STP) compliance in its plans, making it a solid choice for Australian businesses with employees. Xero also supports STP and has an optional payroll add-on but may be pricier for larger teams.

Which software is easier to use?

Xero is known for its user-friendly interface and modern cloud-based experience, making it easier for beginners. MYOB has improved its usability, but some users find it less intuitive, particularly when transitioning from older MYOB versions.

Can I integrate Xero or MYOB with my Australian bank?

Yes, both Xero and MYOB integrate with major Australian banks, offering automated bank feeds. However, Xero generally has broader third-party app integrations, making it more flexible for businesses using additional software.

Which is better for accountants and bookkeepers in Australia?

Both platforms are widely used by accountants, but Xero is often preferred for its cloud-first approach, real-time collaboration, and extensive integrations. MYOB remains popular with accountants who have used it for years, particularly in more complex business structures.