Evaluation of Xero and MYOB Cloud-Based Accounting Software for Australian Finance Group Limited

This report evaluates cloud-based accounting software from Xero and MYOB and recommends the best choice for Australian Finance Group Limited based on the evaluation. It covers key business processes, system requirements, software selection, and a comparison of features and functionalities.

Running head: Accounting Information System 1
Accounting Information System
Name
Institution
Date

Accounting Information System 2
Table of Contents
Executive summary................................................................3
Introduction.............................................................................4
Background............................................................................4
Key business processes.....................................................5
System Requirement..............................................................6
Software selection..................................................................7
Compare and contrast the features/ functionalities of the two cloud-based accounting
software package................................................................8
Conclusion..........................................................................9
References...........................................................................10

Accounting Information System 3
Executive summary
Integration of technology in the business is one of the methods that a company
can use as a growth strategy. Australian Finance Group (AFG), a financial firm, needs
to make consider a number of things as they plan to acquire cloud-based accounting
software (Geddes, Schmidt & Steffen, 2018). Some of the business processes of AFG
include mortgage lending, commercial client on-boarding, retail brand management,
issuance of insurance product, handling accounts receivable and payable, payroll
management and multicurrency handling. The company should look for software that
meets the needs of the business.
The software to be acquired should help the company to carry its business
processes effectively. After a detailed comparison between the software provided by
Xero and MYOB, this paper recommends that AFG Limited should acquire the software
package provided by Xero.
Introduction
Over the years there has been significant growth in the activities of firms in
Australia. The competitive environment under which businesses operate has also
changed drastically. For businesses to remain competitive and encourage growth they
need to make good use of the new technologies (Purves &Niblock, 2018). One of these
technologies is the integration of cloud-based accounting software in the processing of
account information. With the availability of many suppliers of accounting software, firms
are often faced with the challenges of selection (Rhoades & Smart, 2018). The purpose
of this report is to evaluate accounting software from two selected companies and give
a recommendation to Australian Finance Group Limited on the best choice based on the
evaluation.

Accounting Information System 4
Background
Australian Finance Group (AFG) Limited is a financial institution listed in the
Australian Security Exchange. This company was founded in 1994. Its headquarters
are based in West Perth, Australia. Currently, the company has a total employee
capacity of 209. The company main function is the provision of brokerage mortgage
service (Hancock, Marriott & Duff, 2019). They provide their services to the Australian
market. AFG business activities are categorized into two segments, wholesale
mortgage broking, and Home Loans. Their loans products are further divided into
several categories. These categories include home loans, loan for business enterprises,
residential mortgages, different insurance products, and business finance.
The business loan is also divided into different categories so as to cater to the
needs of different clients. Categories under the business loan include loan for
commercial real estate, loan for the purchase of either firm equipment or vehicle, loans
for businesses that are new and require capital, franchisee and commercial loans and
finally loans for account receivables.
Key business processes
There are several business processes involved in a financial institution such as AFG
Limited. These processes help the organizations to achieve their core objectives of
meeting customers’ needs. At AFG Limited, the business processes include:
a. Mortgage Lending: the company has several processes which highlight the steps
followed when issuing out this type of loan.
b. Commercial Client On-Boarding: this process entails all the activities involved
when offering services to a new client. These activities may include collection of
the clients’ information.
c. Retail Branch Management: AFG has other extension and subsidiaries which
helps them in reaching their customers who are located in different parts of
Australia.
d. Issuance of insurance products
e. Account receivables: the institution receives cash from clients in the form of
insurance premium and payment for the product and the services provided by the
business.
f. Accounts payable: while doing business there are several expenses and liability
that are often incurred. Therefore as part of its processes, AFG is involved in the
honoring of these entire obligations.
g. Payroll: any business with employees has the responsibility of preparing the
payroll for its employees to facilitate payment.
h. Currency conversion: being a financial institution, AFG may receive deposits in a
different currency. They also provide currency conversion for their clients.

Accounting Information System 5
System Requirement
When purchasing accounting software, AFG Limited should consider a number of
factors. This will enable them to get the best experience and value for their money
(Wachter, 2018). The software selected should have all the necessary features and
functionalities that will enable the company to carry out their accounting activities. What
to be considered include:
a. Integration: the accounting needs of a company are dynamic. As the company
grows, more accounting needs may come up. This may necessitate the company
to acquire more software to cater for the arising needs. It is therefore important to
ensure that the software selected can easily integrate with other applications that
may be acquired.
b. Accounts receivable: the software to be purchased should be able to track what
the customers owe the business. The software should be able to handle all the
transactions related to receivables. It should be able to prepare invoices with the
correct amount owed by the customers. The software should provide automatic
invoicing services and also provide a platform where customers can pay their
dues electronically.
c. Accounts payable: the software should have features that ensure the company is
accountable for its debts. The software should have the ability to generate
purchase orders and have an automatic payment process which enables the
company not to delay in honoring their obligations.
d. Payroll handling features: AFG Limited has employees who need to be paid.
They, therefore, require software which can enable the company in handling
payroll preparation. The software to be acquired should enable the company to
make a direct deposit of salary to the employees' accounts. It should also enable
the company to automatically make the necessary tax deductions.
e. Reporting: the software should be able to produce customizable reports that
meet the requirement of the firm. Since AFG is a company with several
subsidiaries, the software should enable the company to integrate report from all
its subsidiaries to enable the company to have a better view of its portfolios.
f. Multicurrency: AFG is a financial institution which may handle different
currencies; it, therefore, requires software that has the ability for currency
comparison and conversion.
Software selection
To enable AFG to select the best company, we are going to discuss two
companies, that is, Xero and QuickBooks Online.

Accounting Information System 6
Xero is a software development company based in New Zeeland Australia. It
began its operation in the year 2006. Xero has been observed to be among the service
companies that are growing at the highest rate (Taylor, 2018). This company holds the
largest number of share market in New Zealand, Australia and the United Kingdom in
the provision of cloud accounting software. Xero provides cloud-based accounting
software to small and medium-sized business clients. These soft wares solutions are
provided on an online platform (Smith, 2019). Clients can access these soft wares from
any location.
On the other hand, MYOB (Mind Your Own Business) is also an Australian based
company operating in several countries. This company is older when compared to Xero.
This company specializes in the provision of soft wares to both small and medium-sized
businesses. MYOB was found in 1991 and it is headquartered in Victoria Australia
(Anders, 2018). This company’s products are categorized into different categories.
There are those software products for small businesses, those for a larger business,
those meant for accountants and bookkeepers, apps and integrations and payments
and point of sale. Their software is made in such a way that they can fit in different
sectors of the economy. MYOB soft wares are provided online and can be accessed
from a different location.
Compare and contrast the features/ functionalities of the two cloud-based
accounting software package
In order to compare and contrast, this report will consider the following aspects: cost,
number of company accounts, accessibility, payroll, reporting, invoicing, mobile app,
employee login, foreign currency, online support, and phone support.
1. Cost: both companies offer three plans of charges. Xero charges a rate of $ 25,
50 and 60 per month on starter standard and premium plans respectively. On the
other hand, MYOB offers two types of packages, that is, MYOB Essential and
MYOB AccountRight (Giovani, Hidayat & Mariam, 2018). In MYOB Essential, a
customer pays $25,$40 and $50 per month on starter, plus and premier plans
respectively. MYOB AccountRight costs $61, $92 and $121 per month on starter,
plus and premier plans respectively. Since Xero has one package, it is, therefore,
easier for the customers to understand it.
2. Number of accounts: Xero provides only a single account on each subscription. A
single subscription of MYOB premier Accounts right enables one to get two
company accounts.
3. Accessibility: Xero account is accessible from both a PC and Mac. MYOB
AccountRight is only compatible with a PC.
4. Payroll: Xero provides limited payroll services on the starter and standard plan.
On the other hand, MYOB AccountRight offers unlimited payroll under the plus
and premier plan.

Accounting Information System 7
5. Reporting: Xero has the ability to run several reports at once while in MYOB, only
a single report can run at a given time.
6. Invoicing: both have customizable invoice layout but Xero customization is better
when compared to that of MYOB.
7. Mobile app: both companies software are compatible with both iPhones and
Android. However, it has been observed that Xero software has a better user
interface.
8. Employee login: Xero software allows the employee to log in and perform several
operations such as viewing of pay slips (Harvey, 2018). On the other hand,
MYOB AcountsRights has the login feature as an add-on.
9. Foreign currency: Xero software supports comparison of different currencies. It
also provides conversion rates of these currencies that are up-to-date. This is not
possible with MYOB.
10. Online support: Xero has larger online support because of the massive number
of social following when compared to MYOB.
11. Phone support: MYOB offers guaranteed support throughout the works during
the working hours. On the hand, Xero lacks that phone support.
Conclusion
From the above comparison, it is clearly evident that it is better for AFG Limited
to acquire its software from Xero Company. There are several reasons that make Xero
software to be overall better than MYOB. First of all, despite the fact that both
companies offer prices that relatively the same, Xero has a single package which is
simple to be understood by the clients (Kristanto & Windyan, 2018). Secondly, Xero soft
wares can be accessed from both a PC and a Mac. This enables a company to easily
access their accounts from any location. Thirdly, Xero has the ability to run several
reports at the same time. This makes the software good for multitasking activities.
Fourth, Xero software gives employees the ability to login into their accounts and
perform several activities such as viewing of their payslip (Jayasinghe & France, 2018).
Finally, keeping in mind that AFG is a financial institution, currency conversion and
comparison feature is very important. This feature is available in Xero software. This
makes Xero to be more suitable to AFG Limited.

Accounting Information System 8
References
Anders, S. B. (2018). Practice Management Tools. The CPA Journal, 88(12), 70-71.
Geddes, A., Schmidt, T. S., & Steffen, B. (2018). The multiple roles of state investment
banks in low-carbon energy finance: An analysis of Australia, the UK, and
Germany. Energy policy, 115, 158-170.
Giovani, C. D., Hidayat, A., & Mariam, P. (2018). Pemanfaatan Video Tutorial MYOB
Terhadap Keterampilan Siswa dalam Mengoperasikan Aplikasi Komputer
Akuntansi. Jurnal Pendidikan dan Pembelajaran Ekonomi Akuntansi, 89-100.
Hancock, P., Marriott, N., & Duff, A. (2019). Research–teaching yin–yang? An empirical
study of accounting and finance academics in Australia and New
Zealand. Accounting & Finance, 59(1), 219-252.
Harvey, T. (2018). MYOB formally withdraws merger application for Reckon.
Jayasinghe, D., & France, A. (2018). Comparing reporting of MYOB Enterprise Reporter
vs Xero HQ Reporter.
Kristanto, S. B., & Windyan, C. (2018). Persepsi Kualitas dan Performa Sistem Aplikasi
Akuntansi MYOB pada Pengguna Level Dasar. Jurnal Keuangan dan
Perbankan, 14(1), 1-8.
Purves, N., & Niblock, S. J. (2018). Predictors of corporate survival in the US and
Australia: an exploratory case study. Journal of Strategy and
Management, 11(3), 351-370.
Rhoades, G., & Smart, D. (2018). The political economy of entrepreneurial culture in
higher education: Policies toward foreign students in Australia and the United
States. In The Social Role of Higher Education (pp. 125-160). Routledge.
Smith, H. (2019). Xero for dummies. For Dummies.
Taylor, K. (2018). Making tax digital: Which software?. Practice Management, 28(4), 41-
42.
Wachter, S. M. (2018). Jens Lunde and Christine Whitehead: Milestones in European
housing finance.