Australian organisations big and small are replacing traditional desktop accounting software with online cloud accounting software. According to a report by capioIT, 27% of businesses and 67% of accounting firms have already moved to an online cloud accounting software.
Interestingly, the same study found that businesses cited enhanced security, increased functionality and reduced IT costs as the driving factors behind their move to the cloud. In a separate study by MYOB, the most popular reasons for online accounting were access to data from any location and remote working capability.
Let's take a look at three of the leading cloud accounting software options available to Australian organisations.
Xero
Xero is the market leader for online accounting software in Australia. The company boasts 147,000 Australian customers as of September 2014, an increase of a whopping 96% from the same time in 2013.
Xero is a purely cloud-based accounting platform that focuses on eliminating inefficiencies in the accounting process and enabling greater collaboration between team members. Many manual processes that require calculators, ledgers and/or a great deal of effort are no longer necessary. For example, Xero automatically pulls data from bank feeds, reconciling and categorising transactions in seconds.
Key considerations for your organisation:
- Share access to your latest numbers and check cash flow in real time
- Collaborate online with team members and/or your bookkeeper/accountant
- Customise invoices and enable online invoicing and payments
- Large add-on community that gives you the ability to sync and integrate with hundreds of other cloud-based apps
- Lack of stock control feature: Xero has advised this feature is coming
Pricing
- Starter plan: $25/month, limited team users, transactions, invoices and bills
- Standard plan: $50/month, includes up to five team members and unlimited transactions, invoices and bills
Read our full review of Xero accounting software
MYOB
Among desktop software users, MYOB is the preferred accounting software solution for Australian organisations. MYOB has been trusted by Australian organisations since the early 1980s, but was slow to make a move into cloud accounting, which Xero has used to their advantage.
Fortunately, in 2014, MYOB has a powerful cloud accounting solution. The company boasts over 100,000 online customers with their cloud product accounting for 70% of their business. Similar to other cloud accounting solutions, MYOB's offering lets you automate manual tasks, but does run slower than other solutions we are looking at today.
Key considerations for your organisation:
- Familiar interface if you have used MYOB desktop software in the past
- Cloud product is still immature - tends to be slower than other tools
- More robust features available with AccountRight product
- Small add-on community - you may not find the integrations you need
- Focused solely on the Australia and NZ market
Pricing:
- MYOB Essentials starts from $29/month (basic and simple)
- MYOB AccountRight starts from $43/month (more features like stock tracking and billing)
Read our full review of MYOB accounting software
QuickBooks Online
QuickBooks Online is the cloud accounting product developed by Intuit. QuickBooks Online has seen a lot of success in the United States, but certainly doesn't have the market penetration like Xero or MYOB in Australia. Things are changing though. The company has bolstered their local Australian presence and are looking to increase market share in the next two years.
QuickBooks Online is designed for simplicity - you'll be able to do all your basic tasks very easily. I found their mobile sites and apps particularly user-friendly. But if you’re looking to do more complex accounting, you may need to look at alternative options.
Key considerations for your organisation:
- Focused on simplicity - easy to use
- Lacks robust accounting software features
- Cloud product is new to the Australian market
- Easy to get started
Pricing:
- QuickBooks Online Simple Start product is $15/month
- QuickBooks Online Essentials product is $25/month (manage bills, automate invoicing, currency conversion)
- QuickBooks Online Plus product is $35/month (track inventory, create budgets, compare business performance)
Note: QuickBooks Online frequently offers special pricing - you should be able demand 15-30% off regular pricing.
Read our full review of QuickBooks Online accounting software
Other cloud accounting software products
- Reckon: Another local Australia/NZ solution. Visit reckon.com.au.
- Freshbooks: very simply cloud accounting software; suitable for one-man businesses, freelancers and very small businesses. Visit freshbooks.com.
Choose a cloud accounting software that meets your needs
You are spoilt for choice when it comes to finding a cloud accounting solution. All of the tools discussed in this article are great options for your organisation. Each tool has its benefits and challenges, so I recommend you work with your IT consultant to evaluate each tool and find the one that meets your needs and that your team is comfortable using.
Our IT consultants recommend Xero. Why? Because the Xero ecosystem makes it an easy first step for businesses that want to trial the cloud.
Learn more about Xero and the Xero ecosystem.
Alternatively, call us on 1300 562 886 to discuss the best solution for your business.