Lately, we’ve been having a lot of conversations with our clients about how to get the most out of their bookkeeping software. The most popular bookkeeping software solutions have come along way, even in just the last 12 months, and we are true believers that using technology to it’s full extent powers good business.
But if you are new to choosing bookkeeping software we understand it can be an overwhelming decision. Or perhaps you are thinking your current software just isn’t working as it should but you are a little nervous about trying something new. This is normal.
We talk to clients everyday about just these things so we felt it was a great time to share some of our thoughts and insights.
What’s the overall direction?
Overall the software developers are all on a journey to:
- reduce manual data entry
- make collaboration with your bookkeeper or accountant easier
- make meeting obligations like lodging BAS’s or making super payments easier and more seamless
We recently attended Xerocon in Melbourne and their CEO Rod Drury stated that Xero’s goal is “code-free” accounting. Using bank feeds, combined with ever-evolving AI or machine learning capabilities, all the software providers are building software that learns where you typically code transactions and then it codes automatically. This is only going to get more reliable as the software gets smarter.
We say, yah! Overall the journey the developers are taking us on will result in huge time saving for small business so we can all get on and do more of what we want to do, not what we have to do!
So, who are the main players?
Xero turned 10 this year and has established itself as a serious contender with over a million world-wide subscribers. Xero is leading the way in creating modern and intuitive cloud software and are constantly adding features and improvements boasting an impressive record of 2600 product releases in one year. The other power of Xero is in it’s impressive array of app add-on partners – now totalling 500+! With that many app add-on partners popping up there’s likely to be a smart solution out there at an affordable price that will help you unstick a pain point or inefficiency in your business!
MYOB has historically dominated the market and offers a robust suite of software options packed with features like budgeting, inventory and payroll. MYOB’s website also sings it’s praises as offering the most reliable and secure bank feeds. MYOB does offer some great app integrations but their app marketplace is significantly smaller than Xero’s.
Quickbooks re-entered the Australian market in the last two to three years. They are playing a price war game aimed at winning market share, offering their software at a highly competitive price. We’ve been pleasantly surprised proving that cheap is not always nasty! Quickbooks boasts easy-to-use intuitive features. Overall they’ve modelled their look and feel and feature development on their higher priced rival, Xero. Whilst not as packed out with features it certainly does offer a competitive alternative to Xero, but at a much lower price.
Despite being a major player in years gone by, Reckon (previously known in Australia as Quickbooks) have struggled to maintain market share in the last few years. Reckon have gone a slightly different direction with their Reckon One product offering a very basic but low cost core product with the ability to add-on modules like bank feeds, invoicing and payroll at an extra cost. This can mean it’s flexible for businesses to upgrade and downgrade as their requirements change.
How much does it cost?
Well, it depends. On what? The features you need and want. The four providers all have various price points. As a rule, we generally find the MYOB and Xero are on the higher end of the price scale with Quickbooks and Reckon offering some of the cheapest on the market.
There’s lots of options available but if we looked at a typical business that does quarterly BAS, has up to 5 employees, issues customer invoicing and tracks supplier bills, here’s a quick summary of pricing options:
|XERO – PREMIUM||QUICKBOOKS – ESSENTIALS||MYOB ESSENTIALS – UNLIMITED PAYROLL||RECKON ONE|
|Base cost per month||$60||$27.50||$50||$5|
|Additional cost for extra modules:|
|Notes/other features:||Includes payroll for up to 5 people and unlimited invoicing and billing||Includes Payroll for up 10 employees and bills but does not include inventory or budgeting (Payroll for over 10 employees is an additional $4 per month per employee)||Includes unlimited invoices, bills and payroll and bank feeds up to 250 transactions per month||The add-ons offer unlimited payroll, invoicing and bank feeds which is different to some providers.|
What factors do we consider when making a recommendation for our clients?
Before deciding on any software often your accountant or bookkeeper can access a lower reseller price for you so always ask before signing up directly with the software company.Prices current as of 21st September, 2017.
- How reliable is your internet? Some of our rural customers don’t have reliable internet so this is an important consideration. MYOB offer a “hybrid” cloud solution called Account Right that can be used off-line.
- What bank do you use? Bank feeds are great – they save so much time – but not all banks are compliant with all different software providers
- What features are important for you?
- Job costing
- Payroll (covered below)
- Invoicing customers
- Tracking payables
- Multiple business divisions
- Do you have industry specific or key software in your business? If so, let’s try and find a bookkeeping solution that integrates to your software to save you time and avoid having to double entry data. For instance many cafes are now using Kounta as their front of house software and this integrates nicely to MYOB. SimPro used by the electrical, plumbing and fire contracting industries integrates with Xero.
- Do you need payroll? And if so, for how many employees? Quickbooks software includes payroll for up to 10 employees whereas some of the lower cost Xero and MYOB options offer payroll for only 1 unless you upgrade to a more expensive version.
- Have you had experience with one of these software solutions previously? Often if that’s a yes, it’s a no brainer as sometimes it’s best to stick with what you know.
- Do you have a close friend or family member who is experienced in a software solution? If so that’s often a big swaying point. It’s very handy to be able to ring your sister or bestie on a Sunday morning when you are wrangling with how to reconcile your bank account
- If you are converting from another piece of software, what is the conversion process? What data can be brought across? And when is the best time?
- Finally of course we consider cost.
So overall we feel it’s important to map out:
- What do you need? Do you need features like payroll or inventory? Or will you need them down the track and being able to upgrade is important?
- What are the features and benefits that will make the most difference and save you time and cost?
- Does your bookkeeping software need to integrate with other key software in your business?
- What will the cost be?
- Who will do what? And what training do you need?
Our team are highly experienced in recommending an appropriate software solution for you, setting up the software for your business and offering you hands-on training to help you save time and make the most of your bookkeeping software.