Review and notes on two Australian cloud-computing accounting packages: MYOB LiveAccounts and Xero

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 and easily understood. Often the first phase in an assignment is to make that happen. 

The advantages of cloud software are very 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", and then moved to Xero.

Vendors of cloud software usually deliver new features and improvements quite often, so these packages are moving targets. Comments here are based on functionality at the time of writing.

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.

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.

When LiveAccounts and/or Xero is not right for your business

Neither of these packages move far beyond basic functionality. Xero has a growing range of providers which can plug into Xero, such as POS systems. Xero already does more than LiveAccounts, and given the possibiities 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 in 2012 to 2013. I think medium-szied businesses looking for system upgrades have one more cycle of a fairly traditional approach. My implementation advice right now for businesses leaving MYOB is biassed towards traditional SQL-based finance systems with low-complexity, flexible interfacing capabilities.

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.

The comparison of Xero and MYOB LiveAccounts, in more depth...

The key functional weaknesses with LiveAccounts are:

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.

Reporting flexibility is 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). 

The lack of vision and slow pace of functional improvement in LiveAccounts is disappointing.

Xero is more powerful, but by no means a replacement for the richness of the fully-featured versions of MYOB.

Well, not yet, anyway.

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 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.

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?
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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.

Bank reconciliation

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).

Data Export

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.

The Bad

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.

Not tested

The PayRoll module deployed July 1 2011 is not tested yet. Haven't tested data import. Xero has a specific employee expense module; MYOB LiveAccounts doesn't.

MYOB LiveAccounts vs Xero conclusions

Compared with Xero, MYOB LiveAccounts is 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.

More sophisticated users will prefer Xero: it has better reporting, more flexibility and a much wider-range of add-ons.