Review of MYOB LiveAccounts, Saasu and Xero
Even in 2014, many small businesses are still using traditional accounting packages. The advantages of cloud packages are very interesting. Of the three leading packages in Australia, one was created to "at least have something", one is growing fast based on accountant and bookkeeper referrals, and one is the best product with the best pricing. Read on ...
GrowthPath's mission is not about choosing an accounting system; our job is turn business information into gold. However, this is a very popular article and our team is very passionate about cloud computing because of how much easier it makes our job. We don't resell any software products since we're agnostic; we're about the data, not the system.
About the reviewer
Tim Richardson is an Australian CPA with CFO and senior finance experience with large SMEs and multinationals. Prior to moving into finance, he was an ERP developer, implementation consultant and implementation project manager, and he's had Asia Pacific Region eBusiness and SAP roles with a global multinational. He's implemented sales, distribution and manufacturing systems around the world, from Korean automotive businesses to Australian breweries to global online retailers. His IT, systems and finance experience make him a useful resource for choosing and implementing systems.
Tim is a Director at GrowthPath where he helps improve the profitability of Australian SMEs. Business information is crucial. GrowthPath's profit-engineering work relies on accounting and non-accounting data being up to date, easily understood and easily accessed. Often the first phase in an assignment is to make that happen.
The benefits of cloud software?
- You pay per month
You can finance traditional software and effectively do the same. So this is not a big deal.
- No server needed.
This is potentially a very interesting saving, as long as you don't have any other reason to have a server. A modern small business can do POS, payroll, banking, rostering, email, calendaring, spreadsheets etc on the cloud, and now you can add accounting to the list. If this means no more server, it's a big saving. A server means a support contract, licenses, backups, security software and physical security, power and a solution in case the box fails.
- Remote access everywhere; all you need is a browser. On mobile devices too.
Invoice clients at their location from your iPad, for example. Take orders at the trade show directly into your system. Review the sales of the last hour from the beach. Run your business from a $300 Chromebook.
- Easy data extraction and integration.
There is actually no technical reason why traditional software can't have this advantage, and there is no technical reason why cloud software should be easy to plug into other systems. MYOB Live Accounts isn't for example. However, cloud software tends to use open standards and open source software, and these "technology stacks" include common methods for sharing data. Even Microsoft's web platform now support them well. Most serious cloud software embraces it. Thus, a cafe can use Kounta for POS, Saasu or Xero for its accounting and one of a hundred online store packages and put it all together in the cloud with a few hours of technical expertise. A few years ago, that would have been a $20,000 project.
The benefits of cloud software are convincing. When we started GrowthPath, we had no intention of relying on PC-based software whenever there was an alternative. There were a few candidate solutions for our accounting & billing needs. We spent the first year on MYOB's offering, "Live Accounts", then moved to Xero and then to Saasu
Vendors of cloud software usually deliver new features and improvements quite often, so these packages are moving targets. Comments here are based on functionality which may be out of date.
Summary of LiveAccounts
- MYOB LiveAccounts is well supported, with very helpful live support included in the subscription.
- It's a real double entry accounting system with real live feeds from bank accounts.
- Given it's a real accounting system, it's not complex. It's fast to get started.
- But it's more complex than a cash-book approach (Xero includes a cash-book product when deployed via an accounting practice). It misses some of the cash-reporting options of traditional MYOB.
- LiveAccounts has some big functional gaps. No inventory, no support for different credit terms or even rudimentary job costing.
- Reporting is basic. Almost no support for cash flow forecasting. Virtually no export to Excel.
- LiveAccounts looks quite close to MYOB. The default chart of accounts follows the same numbers. The great BAS report looks like BAS Link.
What is the ideal client for MYOB LiveAccounts
The ideal client for MYOB LiveAccounts is a small business with enough understanding of book-keeping to be happy with a double-entry system, and the expectation to be a real user of the system or to use a book-keeper. In this sense, it's like MYOB's traditional entry-level products, migrated to the cloud. But there is a difference. If you use MYOB's traditional software, there is a path of increasing sophistication as your business grows. You can start with a version of MYOB which does not include inventory, for example, and then move to a more powerful version if the need arises. MYOB doesn't provide a kind of roadmap with LiveAccounts. There is only one edition, and it is not very sophisticated.
Summary of Saasu
Saasu is a long-established Australian accounting package. It's the oldest of the packages here. It looks more like MYOB than Xero, and is more powerful in some ways. It has a proper inventory module and it supports the sales cycle better. It's also cheaper. It shows its age in some ways, but it's a good choice (GrowthPath uses it).
Summary of Xero
Xero is a New Zealand product. It's very well marketed; it has followed the MYOB model of selling through the bookkeeper/accountant channel (the "advisor" channel).
Xero is targetting the larger MYOB user: the business with strong and frequent contacts with an external accountant, most likely a business which uses external book-keeping support. Xero is missing some key functionality compared to Saasu, but it has a better API, more market share and some nice workflow advantages (such as Google Docs integration).
Xero and Saasu are close competitors; they have the same target market.
Are cloud packages right for your business?
Neither of these packages move far beyond basic functionality. If you have multiple locations, more than 25 employees, need custom reporting and a complex movement of physical goods, you not going to be happy. To put it another way, if you are outgrowing the functionality limitations of MYOB or QuickBooks, these cloud packages won't help.
Xero has a growing range of providers which can plug into Xero, such as POS systems. Saasu has a smaller ecosytem, although there are a few inventory and POS systems that work with Saasu. Xero already does more than LiveAccounts, and given the possibilities of integrating with thrid party software, Xero definitely has more to offer. But if your business is too complex for MYOB Enterprise, cloud accounting is probably not the correct migration path, even in 2014. I think medium-sized businesses looking for system upgrades have one more cycle of a fairly traditional approach. Note that mid-tier vendors are offering some advantages of cloud computing, such as hosting it on the cloud, and moving reporting, analysis and business intelligence modules to the web.
My implementation advice right now for businesses leaving MYOB is biased towards traditional SQL-based finance systems with low-complexity, flexible interfacing capabilities. Call GrowthPath if you want an experienced, vendor-neutral assessment of which approach will have the best impact on your profit.
When cloud accounting is worth considering
Clients which are operating comfortably within a traditional MYOB or QuckBooks package are ready to seriously consider a move to cloud computing. The productivity improvements are highly worthwhile and you will probably not face functionality problems.
The comparison of Xero, Saasu and MYOB LiveAccounts, in more depth...
The key functional differences of Xero and Saasu with LiveAccounts are:
- LiveAccounts has poor invoicing flexibility (such as different credit terms, partial payments and job-based invoicing, which doesn't even have rudimentary support at the time of writing). Many common tasks such as writing off bad debts seem fairly technical in their solutions. Xero and Saasu are better. Saasu is probably the best although all packages have got room for improvement.
- LiveAccounts reporting flexibility is almost non-existent, and the built-in reports are very basic. Yes, you get a balance sheet and an P&L, but you can't run multi-period reports (to show monthly P&Ls next to each other in columns). Xero has the best reporting, Saasu is adequate.
- The lack of vision and slow pace of functional improvement in LiveAccounts is disappointing.
- Xero and Saasu are more powerful, but by no means a replacement for the richness of the fully-featured versions of MYOB. Well, not yet, anyway. Contact GrowthPath you need more specific advice.
- Xero has something which LiveAccounts doesn't seem to have: momentum. Bookkeepers studying at TAFE now learn it, for example. And the Xero business model appeals to a key influencing group, accountants. Xero is out-performing Saasu as well (Saasu for reasons which puzzle me doesn't seem to market the product very well; it's incredible how many small-business accountants have not even heard of it).
- Xero integrates with several third-party products (to add functionality), and has a published API which makes it easier to customise and will lead to more third-party integration. Saasu also has an API; it's a bit more difficult to use since it uses older-technology, and it is limited. A new API has been promised for a while...
- Payroll. All packages have payroll. From my experience, and looking over the shoulders of clients, they all do the job. Saasu impresses me the most; it seems to have some good efficiencies and rich functionality, but Xero is capable as well. LiveAccounts does the job for a small payroll. This is an area where functionality in all systems is improving fairly fast. The cloud rostering package Deputy interfaces to Saasu and Xero, but not to LiveAccounts (no API).
- Saasu has a phone number, quickly answered by a product expert. The documentation is quite good.
- Xero has gone for highly-scalable support, which means as far as possible, no people. There are videos, community forums and good documentation. The model is that if you want a person, call your "advisor" (bookkeeper or accountant)
- LiveAccounts. A pretty good compromise: you get online chat. So you get to talk to a product expert via a chat session. This worked really well when I was a LiveAccounts user
So in terms of support, Xero is in third place. I'd put LiveAccounts in first place, Saasu a close second.
APIs and an unsung benefit of Cloud Computing
- Speaking with my technologist hat on, an unsung feature of cloud computing is the amazing integration we're going to see between different apps. However, you need a documented API and developer support to enable that. Xero gets it and MYOB doesn't. (An API is a stable set of rules that a programmer can use to interact securely with an application, usually in a a number of different programming languages. Programmers rely on APIs to do things like connecting a CRM app to Xero).
- Both systems offer very large productivity gains regarding external book-keepers and accountants. Travel time/time on site is drastically reduced, and time lost due to delays in getting documents to bookkeepers for entry are significantly reduced. The possibility of off-shore bookeeping is opened up. In all, cloud-accounting systems will mean less spend on transactional support.
Thinking of replacing MYOB?
Core functionality of LiveAccounts (a more in-depth review)
- MYOB LiveAccounts is a browser-based double-entry book-keeping system for the Australian market. It's aimed at small businesses with basic requirements (less than ten people for example). The name "live accounts" probably refers to the linked bank statement included in the monthly fee. This is a read-only link. MYOB LiveAccounts will track what happens in your linked bank accounts, but it's can't initiate any transactions (such as paying a supplier). Bank account links are included in the price. They take a week to two weeks to setup. We use NAB: it works fine.
- MYOB LiveAccounts provides an AR and AP module, a banking module, GL, a central contacts module and a reporting module. A payroll module was recently added. If it was not online, it would be a basic entry level small business accounting package, offering real double entry accounting and Australian localisation, probably costing around $400 (which would not include the links to bank accounts).
- Compared with Xero: Xero is a somewhat more sophisticated system, but it costs more. You would expect that MYOB Liveaccounts would see a constant flow of new features, since that's one of the main advantages of hosted solutions. However, apart from the introduction of Payroll, I have not noticed substantial functionality improvements.
The internet experience
- Availability has been good: during business hours, we only experienced small periods of downtime. Speed of response has improved and is at least adequate. High volume data processing was initially a nightmare, mainly because the interface was not designed for it. There have been good improvements. It doesn't match a dedicated traditional PC client, but it's now adequate.
- The bandwidth required to serve the application doesn't seem too bad. I've used it over a Optus 3G mobile broadband link; it's ok.
- What you do get is strong multi-location support. Compared with traditional MYOB, this is a huge difference. Running traditional MYOB remotely is complex. Keeping it on a laptop is fraught with danger, and brings you back to a one-user system. For any small business which wants a small team to access the accounting system at multiple places, a web-based solution is very compelling. This is even more true of a business which has already embraced other cloud solutions such as gmail, Drop Box etc.
- This module is called "Invoices". It's basic. You get to set up one default payment term; apart from that, you need to manually intervene when creating an invoice. An invoice can have multiple lines. It's possible to process partial payments, but when created an invoice has only one due date, which is fine for a simple system. There is no quote module, no customer-deposit functionality and no job support. GST and Australian compliance handling is good out of the box. Surprisingly, Xero also doesn't allow credit terms per customer.
- Basic as per AR. The AP module is called "Expenses", which I find confusing since cash expenses are not booked in this module: that's "Spend Money" under Banking. In traditional MYOB, the AP modules seems to be called Payments. Which is also confusing. Perhaps I could suggest calling it "Accounts Payable". (Xero calls AR and AP by their correct names).
- You'd be mad not to link your bank account to MYOB LiveAccounts, since it costs nothing extra (a paper form must be mailed). When you do this, customer payments are matched against open invoices quite well. (Xero offers the same functionality, except that the form goes direct to the bank; MYOB handles the paperwork).
- Cash expenses are booked as 'spend money", familiar to MYOB users.
- Payments of invoices entered in the "Expenses" module are created in Expenses. You then pay externally to MYOB LiveAccounts. There is no EFT link: you can't instruct your bank to make payment from within LiveAccounts. But after you do make the payment, it will automatically appear in LiveAccount's bank statement, auto-reconciled with the payment journal created by the "Expenses" module.
- Transfers: There's a bank transfer function, which creates entry waiting to match when the transfer shows up in the linked bank statement.
High volume data entry
- I have not tested high volume data entry (sitting down to enter 50 supplier invoices, for example). Originally, MYOB LiveAccounts exited the invoice entry screens after each document entry, which was very annoying; this is fixed now, making repetitive data entry at least acceptable. Xero works nicely with keyboard entry.
- MYOB of all flavours has good bank reconciliation capabilities. Since LiveAccounts strongly encourages linked bank accounts, it's pretty easy. It automatically matches transaction where it can (such as payments received for invoices) and is effective. Manual reconciliations are also possible and the interface is sophisticated enough to allow correction of mistakes. The 'look and feel' is close to MYOB. Bank recs can get complicated; the LiveAccounts module is a success.
Home Page: The dashboard
- The home page uses a few simple graphics to show the main expense categories, overdue invoices (AR aging) and bank balances. This is a screen where the keep-it-simple philosophy is clear. Xero is equivalent, but a bit more sophisticated.
- Reporting is basic. Reports are usually exported as PDFs. There is usually no export to Excel feature in the reports.
- Above all, I miss a cashflow report (which Xero does have). Some businesses will miss cash-based P&Ls (which the PC version of MYOB provides).
- Transactions can be exported to a spreadsheet. The format is designed to read well for humans, but it's very difficult to use for data processing. This is really dumb of MYOB. A simpler, record-based option would be greatly appreciated; a user could then work around reporting deficiencies.
- There is no API. It supports export to your accountant's MYOB, like the desktop versions. I haven't tested that.
Customer support (big win for MYOB)
- Customer support is good. I've used live chat a number of times. Response has been fast and effective; waiting times of less than a minute are typical (this is for the live chat option). Xero does not have live support. Xero's email response is fast but a live dialog with support who will log on to your system and investigate with you is much better; turnaround time for problem resolution is only minutes.
Overall, The Good
- Enough similarity with MYOB to provide users with a feeling of comfort. $25 monthly fee includes live bank account links at no extra cost. Sufficient basic accounting functionality for a small business. Pricing model is not limited by how much you use it: some competing products charge differently according to how many invoices you generate per month. So it's cheaper than Xero. For Australian clients, the BAS reports are convenient.Dynamic connection to bank accounts is a huge plus over non-Australian competitors.
- Support is quite fast and usually helpful.
- Slow and cumbersome user interface (although it is getting better). Reporting is clumsy, and results in non-interactive PDFs. No Statement of Cash Flow. Data export and import options are very limited. Invoice flexibility is almost not existent. You can't take prepayments or progress payments, or have different terms per customer.
- Many small businesses may grow in complexity faster than MYOB LiveAccounts is adding functionality.
MYOB LiveAccounts vs Xero, Saasu conclusions
- Compared with Xero and Saasu, MYOB LiveAccounts is a cheaper, simpler product and closer to MYOB. It's support is better. This is always immediately attractive; however, there is not yet a clear upgrade path for businesses which grow. The simplicity is mostly missing functionality, not well-presented complexity.
- When I started trialling Xero, I realised these two products are more distinct than I expected. MYOB LiveAccounts is a better low-end product for very small businesses who want to look after book-keeping themselves. Xero advises while setting up the system that you should invite your accountant to participate; Xero is a noticeable step-up in complexity.
- I moved to Saasu after a year on Xero mainly because it was cheaper, and for the sake of learning about it. Saasu is functionally superior to Xero in a few areas, but Xero is a smoother experience and is more widely used.