Despite its impressive growth streak, some businesses have found that online accounting program Xero was not the right fit. Bookkeeping outfits such as Two Peas sold conversion services to move businesses from Xero to desktop accounting programs such as MYOB. Two Peas’ owner Pam Madytianos said there were diverse reasons for switching back from Xero to MYOB AccountRight Live.
1. No inventory
Xero lacks inventory, a popular feature for retailers and project-based businesses. It recommends users add Unleashed, a dedicated inventory program, which plugs into Xero. But some businesses baulk at paying $40 to $180 a month extra.
2. Add-ons add up
Xero lacked several other features common to desktop accounting programs such as quoting, sales orders and purchase orders. Xero encourages businesses looking for more functionality to use add-on programs such as QuoteRoller and Quotient, which cost another $15 to $40 a month on top of Xero’s $49 a month charge.
“When they start to look at the addons and it becomes quite an expensive monthly fee,” says Two Peas’ Pam Madytianos.
3. Resistant to change
Some accounting firms “are more keen on Xero and so possibly influence clients to change across”, Madytianos says. Businesses might find change a little difficult or just find it easier to stay on their old program.
4. More competition
Businesses which moved to Xero because they wanted the collaborative benefits of online accounting were looking to return to MYOB now that it had developed its own online accounting programs. “The cloud products took a little longer to get off the ground with MYOB and now they’re available and improved they’re opting back,” Madytianos says.
5. Local backup
MYOB AccountRight Live synced a business’ data file between MYOB’s cloud service and the business’ desktop computer. Some businesses liked having a copy of the data in their possession rather than rely completely on the software vendor.
MYOB does offer Inventory albeit badly but that is the only 1 in this list of 5 that is a function. So that’s a list of 1 in favour of MYOB. (Xero is bringing in a Lite Inventory to enable stocktakes to be done using it).
The rest of the list is subjective and depends on the stakeholders wanting to learn a new system and embrace change and the cloud. There is a shortage of Xero professionals out there but once it becomes more commonplace (and bookkeepers get up off their behinds and do some learning, sorry, I digress) AND the inventory Lite comes on board your list will be a list of 0.
Its a pretty weak list, lets face it.
Hi Dianne – yes, it is a subjective list, but these are still reasons businesses are giving for moving back to MYOB. Business owners may be driven by emotion rather than logic, or maybe they have enough change happening in other parts of the business.
I was surprised to see that for some businesses the resistance to change was strong enough for them to face the hassle of migrating a second time.
This emotional shopping around, kicking tyres and making expensive decisions like changing then changing back highlights the problem of an easily accessible application ($50 a month, no lock in contract) available over the internet – making a decision before doing any planning. The bookkeeper in this case makes it easy as she is developing a business around this black hole and good for her – free enterprise! If it was my client I would (and do) embed the system into their back office even post implementation – I have many clients who have gone out on their own and got on board the Xero and Cloud ship without consulting me first and I have to make it fit. I do make it fit because in my opinion there are very few businesses that Xero does not suit..As I said in my first post, there are very few (comparatively) bookkeepers out there who know Xero – many many more know MYOB.
We agree its an emotional decision of SME’s Sholto, but we dont agree on your ‘list’ and never will as since when is ‘choice’ a reason for change? Theres a need out there for some post implementation strategic planning to help the new system fit the old business and if this isnt done then failure is a possibility.
Instead of building a new business stream around strategy failure I am at RapidEntry building a new system into my business to help firms Plan Strategically Post Implementation to make it work. The cloud is the future, Xero is true cloud and the future is now. Dont look back, look forward.
Hi Diane – it sounds like you have a well-thought out approach to setting up your clients on Xero. But I think you misunderstand the point of writing this list. I’m just the messenger here, these don’t reflect my personal views. It is not a list of reasons why businesses should move from Xero to MYOB. It is a list of reasons businesses are *giving* for making the move.
While BoxFreeIT is vendor independent, I believe all vendors will ultimately move to browser-based cloud apps. That said, there are still situations where cloud is not the best fit (a missing feature or just no reliable/affordable internet connections). I don’t know whether that number is “very few”, as you say, or more than a few.
And yes, I think it’s very likely that some businesses might be moving back from one program to another because they had a bad experience that was no fault of the product. Either they tried moving across themselves and botched it or used a bookkeeper/accountant without sufficient experience to make it work.
The internet to business is the ‘air we breathe’ it is THAT important.
I was speaking to a business coach the other day and he quoted Sholto’s list as reasons why Xero isn’t a strong solution. Xero is very good for the bookkeeper and sometimes their bottom lines influence the advice they give their clients. Xero is a business darling at the moment. They’ve done a good job of creating a marketing aura about them. Good on them. But Xero is not the best for everyone. No tool ever is. The legacy desktop solutions may be seen as dinosaurs amongst some but they still deliver a lot of accounting per buck.
Yes, it seems cloud is not always the best answer.
Just to clarify for readers – the article is a summary of reasons given by businesses choosing MYOB over Xero, from an interview with a bookkeeper converting accounts. BoxFreeIT is independent and does not advocate for a particular program.
Talk about being “out to lunch” on this. It’s not about the cost, it’s about the investment. And a “hybrid” cloud solution like AccountrightLive misses the whole point of cloud computing and its benefits.
To every single small business out there: If you have anyone that you pay good money to (accountant, bookkeeper, financial advisor) and they don’t understand the difference between cost and investment, FIRE THEM IMMEDIATELY. Pam Madytianos is one of those people.
Hi John I understand your point about cost versus investment and I definitely agree that owners need to look past the sticker price and measure the benefit to the business. A lot of apps deliver a lot of value that far outweighs the $20 a month or whatever. This list suggests that many businesses don’t get it.
As per my response to Pam above, emotion can drive these decisions. My biggest bugbear is the business owner who thinks data is safer on their PC than in the cloud. I believe that’s incredibly unlikely. Whether the data is stored in MYOB’s cloud data centre or Xero’s, these apps are backed up to multiple locations, protected by the latest security devices, etc. Over time I suspect the attraction of local backup will wane and people will be happier to trust any brand-name cloud software.
And some businesses might want to wait until the cloud providers add inventory before making the leap. If it’s important enough to the business then that’s their call.
Also it’s a little unfair to criticise Pam and Two Peas. Two Peas is just providing the conversion service, not advising on the accounting program.
Interesting article Sholto. I think there is a bit of a knee-jerk response that comes from many of the cloud zealots whenever someone talks about cost. “It’s not cost, it’s investment!” or “You need to consider the value, not the cost!” There’s an implicit assumption there that people who talk about ‘cost’ have not considered at all the return on investment or the value – that they balk as soon as they see the cost. But this highlights what I think is a big problem for cloud accounting – the mounting costs that come from a subscription based model. It’s quite possible (in fact, it is true) that they may actually end up outweighing the benefits, hence there may be little or no return on ‘investment’. This is especially so when there are multiple ledgers and/or add-ons involved. People in business are not stupid, and it’s not a lay down misere for cloud accounting in every case. We’ve found a number of businesses who have diligently crunched the numbers and found the cost to exceed the value.
Cloud is a solution. It may not be THE solution for every case.
There will be many battles between cloud and desktop but inevitably, over time, cloud will win the war. It is an industry in transition and right now there is a great deal of investment in mature desktop software products that satisfy the need and for which you don’t get a bill every month. It is unfortunate that the arguments reduce to cloud versus non-cloud. Focus on the business outcome and yes with an eye to cost, but don’t under estimate the cloud, inevitably it will become the most commercially viable choice, the only unknown is the length of time.
H Sholto,
I think this article is quite timely as I am getting a little annoyed at the evangelist approach to some programs by some people. These people tend to be business owners of very small and simple businesses (in my opinion) who don’t appreciate the broad range and reach of differing businesses types, sizes, usage and needs and how this drives different software choices. Its definitely horses for courses. These simple users rarely have to go under the hood and perform surgery on a set of accounts that have been trashed. Its only then that the true ease and flexibility of the various programs are exposed and each has their own set of difficulties.
I would comment on the authors Point 5. I think this is going to become an increasing issue for all the programs. That is, the ability to take an archive copy of the file, frozen in time and saved for posterity. I think this and ongoing ownership of records (as different to the live file) will become increasingly an issue which all providers will need to address. The ATO requires statutory periods for record keeping and I don’t think the live file by itself truly satisfies this requirement.
Regards
Marc
100% Agree! The cloud is a great idea, but for future references we need to be able to look up old records within our own desktop files and without having to continue to pay subcriptions.
Pam is simply reporting back what the clients have told her. They feel that their investment in their software –whether it is Xero or MYOB – is bringing benefits to their business. Some businesses see the value in having to a cloud solution like MYOB with integrated inventory, payroll and timebilling as it suits their business models. Others see the value in having Xero, with addons, that may cost more but allows their particular business needs to be met. A “one-solution suits all” approach is a bit outdated.
As consultants, we have to be able to work with a range of products and add-ons, regardless of the brand, to offer the best solution to our customers.
Hey Sholto,
We have received feedback from migration service providers that Xero switchers have a variety of motivations – they consider both LiveAccounts (MYOB’s SaaS offering) and AccountRightLive when switching. They report that LiveAccounts is immediately attractive for small business owners looking for a DIY accounting solution because it includes all the features they need including, invoicing, quotes, banking and payroll and is less than half the price of Xero Medium – with no transaction volume limits.
The key factors behind the switch to MYOB AccountRight is that core accounting features are pre-integrated by MYOB (ie. no add ons are needed). Payroll, inventory, quotes and invoices are included as standard in AccountRight Live and LiveAccounts – rather than using 3rd party apps and paying extra for features and transactions.
The richness of AccountRightLive is naturally a significant driver for those who prefer more power and flexibility than DIY solutions – different folks like different aspects, but the main one we hear about are:
o AccountRightLive’s deep management reporting with ~150 reports vs 40 for Xero
o Multiple back-up options eg. AccountRight offers online, regular back-ups to a local drive and the option to take point in time back-ups.
o Purchase orders and managing purchasing from larger business is included in AccountRightLive;
o Timesheet costs and expenses are able to be allocated against jobs;
o AccountRightLive offers access to data without an internet connection (much like using outlook offline); and
o Switchers value access to MYOB’s telephone and online support
[…] Bookkeeping and software consultants Two Peas was involved in the testing of the tool and had agreed to become a conversion service partner as it recieved several requests a week to change from Xero to MYOB. […]
Thanks for that. While there was no way I was going to use Xero for my new venture, I just needed that last little xero/MYOB comparative nudge.
My experience with Xero hasn’t been great and I’ve been looking around for an alternative. While Xero may appear to be easy and convenient, it can be incredibly painful if your business gets a lot of transactions (a lot of transactions are what you want, right?).
Xero took days to respond to a support request and refused to help, even though it is easily within their power to do so.
If you sign up through an accountant, you can’t detach your account.
You cannot do proper or complete backups.
The design is such that you can never leave.
If anyone is considering using Xero, ask yourself who you think should own and control your data, you or Xero?
I have been keeping an eye on Reckon One for the past couple of months but I don’t think I can wait any longer, and I can’t see a release date, so it looks its like MYOB.
I still need to check my other business out of the Hotel California, I’d be grateful for any advice.
Hi Damien
I’m a died in the wool Quickbooks user and would never consider using MYOB for my own use although I’ve operated it for clients. I’ve been checking out the move from Quickbooks Enterprise (now Reckon Accounts) to a cloud based solution and found that Quickbooks online (by Intuit.com.au not Reckon) offer a lower priced solution with better functionality for each version at the Xero price point. I think you can change accountants as you invite them to access your data but I did not check that out as I did not imagine that you would be locked into one accountant! You can download a trial and give it a go.
HI Sholto
You cannot compare AccountRight Live to Xero in terms of features (& benefits). AccountRight Live has loads more features, 4 x more reports (Xero 28 reports, AR Standard 100 +). In NZ AR Live Plus includes payroll, time billing and full inventory (it is good and does work when you buy hold and sell. Also, the bank feeds in AR Live are heaps better – you are not ‘ruled’ by your bank feeds as in Xero and also, with MYOB you still do a real bank rec (no so in Xero). There are no doubt many Xero users with out of balance on their bank accounts. They never physically check the balance matches. MYOB is more bang for your buck, Xero is fine but the cost of that plus the add-ons is more than MYOB.
Also consider MYOB Live Accounts as being a Xero equivalent. It has everything Xero has (except tracking) and includes a full payroll for UNLIMITED number of employee AND is half the price of Xero.
I feel sorry for all the Xero users who have been pushed to it by their accountants. They have had no say in the matter and now many of them want back.
As for Rod….he has got to get the prize as the rudest & most arrogant business leader seen in this part of the world. But for NZ’s sake I just hope that one day they make a profit to soak up the millions of losses the company has made.
The difference in reports between MYOB to Xero is that Xero don’t list every possible iteration of a report as an individual report. eg the Profit & Loss is 1 report in Xero with many different ways it can be configured whereas MYOB will list each one as a separate report.
Very interesting, I didn’t know that. So if you multiply out all the report options in Xero does it come close to AR+’s 100 reports?
Thanks for the comment, Lynley. What makes one type of bank feed better than another? I thought they all did the same thing.
Bank Feeds do all do the same thing. It’s just the way that you interface with them that is different. Using bank feeds in Xero is no guarantee that your accounts will reconcile. Neither for that matter is undertaking bank reconciliations in MYOB.
I’ve worked with both, and I’ve seen absolute screw-ups in both. It’s not the system that’s being used, it’s the skill and expertise of the user. I’ve actually seen far more messes made with MYOB bank account balances by accountants who decide to raise journals to bank accounts.
@DardeeBooks nails it with reporting. Whilst in MYOB, you visibly have a large number of reports, you will probably find that the average business user only uses a very small percentage of those. As an MYOB user across a range of businesses, I can confidently say that many of the reports were never used, or if they were, they provided inadequate output. The sheer frustration of MYOB reporting was that if you did need to bring over to excel to provide additional manipulation, you had to rebuild all the formulas before you could do anything with it.
Conversely, you bring Xero reports to Excel, the formulas come over intact, and are easy to use. Again with Xero reporting, each report has a large number of customisation’s built into the reporting tool itself.
Irrespective of whether you use Xero or MYOB, adequate training and knowledge to the end user is going to be critical to allow the maximum benefit to be derived from the application. I tend to find those that are critical of their experiences with both products do it from a position of ignorance, and once shown how to work effectively and correctly with the products, soon change their perspectives.
It’s interesting the discussion on cost too. I have a client who is a consulting firm – 30-50 staff, depending on work load. Work is a mixture of labour and third party services.
When we first started working with them, they were using MYOB, and a third party project management tool. In addition to MYOB and the Project Management tool, a large number of reports and spreadsheets had been generated external to these systems to provide the level and reporting that management required. Monthly financial reporting was onerous and time consuming.
We undertook an assessment of the client’s needs, and recommended the combination of Xero, with WorkflowMax, and have just incorporated FathomHq as their reporting tool.
They have now gone from what was an annual investment (not including the time taken to maintain the additional reports) of >$30,000 per annum, to <$5,000 per annum. The time taken to provide financial reports has also reduced significantly, and end of month reporting is finalised within 5 days of EOM rather than the 14-21 days that it was previously taking. A simple report that needed to be provided to the bank was taking 3 hours to compile, and is now being generated in less than 5 minutes.
I encourage anybody doing a comparison of the systems, to not only review in the context of the actual cost of the service, but in what efficiency is provided to you as the end user.
This could be a review of your workflows, streamlining of process, the cost of maintaining your internal IT systems and hardware, the interface and the relationship with your accountant/bookkeeper.
For the advisers out there recommending any product, recommendations should be done so with the client’s needs paramount. You are doing a dis-service to yourself and your client if you do otherwise.
Thanks Cass, that is a great response. “Irrespective of whether you use Xero or MYOB, adequate training and knowledge to the end user is going to be critical to allow the maximum benefit to be derived from the application.” Amen!
Hi Sholto,
Have you done a review or comparison with quickbooks online? (Intuit)
Hi Sharon yes, BoxFreeIT contributor Margaret Carey has written several comparisons.
http://boxfreeit.com.au/2013/11/25/can-intuit-crack-the-australian-market/
http://boxfreeit.com.au/2013/10/03/review-the-new-look-quickbooks-online/
http://boxfreeit.com.au/2013/10/14/xero-vs-quickbooks-online-comparison-round-two/
And double Amen…I totally agree that the client’s needs have to be the priority. We have to be aware of a range of software and to be able to advise the best combinations and “best of breed”. It is not good enough any more to be versed in just one accounting software.
It is a changing world out there for us bookkeepers and consultants.
Hi Sholto,
I think there should be 6 things.
With Xero it appears that the subscriber “rules” roost e.g.
say a book keeper take up the subscription for my Company and sometime later – the bookkeeper and the company part ways (unhappy) currently xero insists on the subscriber releasing/transferring to the company in other words the company who is the right full owner is denied access to their accounts. This is UNACCEPTABLE and it seems that Xero is unable to do transfer the following is a verbatim quote of xero response :
“Thanks for your reply.
Yes we did receive Jxxxx’s email that clearly requested Xero to reactivate and transfer the organisation. We fully understood his email.
We have reactivated the organisation, but we’re unable to transfer the organisation until Jxxxxxx has followed the steps we require him to complete in Xero.
We have given Jxxxx two options and we await his action or reply.”
This is really a ball breaker and I can’t believe this is happening. Sholto do you know if the others such as MYOB and quickenOnline have the same problems? As I really would like to think they would allow companies to be able to move from one bookkeeper/accounting firm with the minimum of fuss.
Hi Nuvit that’s very interesting – it’s the first I’ve heard of it. I don’t know whether MYOB and QBO are the same. I’ll ask them, but first just want to clarify with Xero how this works.
Hi Nuvit,
Yes this is pretty common issue for many software systems where the owner of the data is not the account holder.
At Gem Accounts we resolved that by allowing the owner of the data to contact Gem and move their account to another accountant/bookkeeper.
It is our philosophy that the data belongs to the creator of the data, not the owner/originator of the account.
So if you use Gem, you can switch your whole account from one service provider to another.
With MYOB you are free to move accountants or bookkeepers without any notification to MYOB whatsoever as the business is the owner of the file and pays the subscription directly to MYOB. I personally think it gets too messy signing up clients & then having to bill them monthly which is what a lot of accountants and bookkeepers are having to do with some products.
Just came across this post. I run an accounting practice and I agree that no single accounting product is complete in itself. We don’t blindly recommend Xero to every client that is looking for a program. I believe every business needs are different and so the recommendation of the program depends on the requirements.
I love the work flow in Xero and easy of use. It’s fantastic for small businesses who needs basic bookkeeping. I personally don’t like the reports in Xero. Reporting in MYOB is far better than Xero. I think Xero can also improve on their payroll.
One thing that our clients like the most about Xero is that it has reduced the data entry time and thus smaller bookkeeping bills, which is not such a great thing for bookkeepers.
The most common programs we recommend are MYOB, SAASU, XERO and QuickBooks. Each one has their own advantages and flaws. I personally would be wary of accountants/bookkeepers who blindly recommend a program to clients without assessing their needs.
Sunny Kaur
Booksmart Accountants
I guess with the release of Xero Quotes, Inventory & Purchase Orders this article is now redundant. I used Xero from the start of the company and while it lacked some features at the start I kept with it as I was so impressed with the continuous improvement which has only kept getting faster. Also as an accountant the increased collaboration with clients is unbeatable.
I would suggest not moving backwards and turning to MYOB, rather check out https://www.sageone.com.au/ which will have it’s official launch at the end of April. You can currently use the trial service for free and I think many of you will be extremely happy with it. It seems to address all of the points covered above!
I do think that Xero has made a massive head-road into offering up a off-the-shelf solution.
The final frontier is the desktop equation. As the only incumbent with ‘Cloud Only’ offering; you do have to wonder whether there is merit in an offline ; archive copy of the file. And whether this could help close the gap for the cloud nay-sayer.
I’m not saying that a full offline / desktop solution is the way to go; but a solution for ‘Archival’ could go down well to address the export and view option for a partner looking to hold their prized data locally (even if it were never to be used / useful).
I did notice recently that QBO has a Export to Desktop option; allowing partners to export the QBO data to a QBD file for use / migration options. Only available in Internet Explorer; and running from an ActiveX control; it’s possible that this was a legacy system that is likely to be buried along with their desktop solution.
Paul MacNeill
Managing Director
Founder | Wise-Sync.com
Just self qualifying my comment; the ‘Only Incumbent with Cloud Only Offering’ is really only considering the market tussle between Xero and Intuit, Sage and MYOB. All providing alternative desktop offerings. I’m well aware of the offer of other solutions including Sassu, Wave and other ‘Cloud Only’ solutions. Just wanted to make that clear.
Hey Paul
I like the idea of a desktop download. Most of the web apps have poor support for exporting data, whether backup or migration. Will be interesting to see if QBO keeps that function. Can’t see why they would want to chop it.