Accounting Software Packages: Xero vs MYOB

This report compares Xero and MYOB accounting software packages for a management consultant. It recommends adopting Xero for Telstra Corporation Limited.

Accounting Information System
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Executive Summary
This report has been undertaken to providing an understanding of the different accounting
software packages such as Xero and Myob from the perspective of a management consultant. As
such, it has provided a description of these accounting software’s by providing a comparison of
their relative features and products. The overall analysis has been done for identifying and
recommending a best accounting software package for a selected ASC listed company, that is,
Telstra Corporation Limited. The analysis has provided the recommendation of adopting XERO
based accounting software to be used by the company for complying with ATO requirements an
improving credibility in its accounting operations.
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Contents
Introduction......................................................................................................................................4
Background......................................................................................................................................4
a. Description of Client and its Business Activities.....................................................................4
b. Key Business Processes...........................................................................................................4
System Requirements......................................................................................................................5
Software Features and Functionalities Required by the Client Company for Supporting its
Business Activities.......................................................................................................................5
Software Selection...........................................................................................................................5
a. Brief Description of two accounting software package vendors and their products................5
b. Comparison of the features of two cloud-based accounting software packages......................6
c. Identification of the most suitable vendor and accounting software package for the client
company.......................................................................................................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................8
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Introduction
This report is developed from the perspective of a graduate consultant working in a
management consultancy firm to provide recommendation for the adoption of cloud-based
accounting software within an Australian ASX-listed company. The selected company is
currently undertaking the evaluation of its accounting system and the CFO of the client is
planning for the implementation of cloud-based accounting software for supporting the business
growth. In this context, the report has provided a description of the selected client company
activities and the key business processes that are required for the client. This is followed by
outlining the software features required by the client company and providing a description the
recommended software package vendors such as SAP, MYOB, Xero and others that can be
implemented by the client company. The comparison of the features of two cloud-based
accounting software packages is then provided followed by identification of the most suitable
vendor and accounting software package as per the needs and requirements of the client
company. The client company selected for the purpose is Telstra Corporation Limited, one of
leading Telecommunication Company within Australia that is involved in development of
telecommunication networks and services.
Background
a. Description of Client and its Business Activities
Telstra Corporation Limited is recognized as one of the largest telecommunication
company of Australia listed on ASX. The company is involved in developing and providing
telecommunication networks and services. It builds and operates markets voice, mobile, internet
and data services and pay television services. It is a leader in providing telecommunication
solutions involving networking, cloud services, data hosting, and conferencing and satellite
services. The primary activity of the company consists of providing telecommunications and
information services to both domestic and international customers all over the world (Telstra
Corporation Limited, 2017).
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b. Key Business Processes
Telstra conducts its activities through following segments, Telstra Retail, Global
Enterprise and Services Segment, Telstra Operations segment and Telstra Wholesale segment.
Telstra Retails segment is involved in providing telecommunication products and services, global
Enterprise and Services Segment is involved in providing sales and contract management
services for its business and government customers. The operations segments of the company are
involved in developing plan for construction of networks and technology solutions. Lastly, the
wholesale segment of the company provides diverse types of telecommunication products and
services to other carriers and internets service providers (Telstra Corporation Limited, 2017).
System Requirements
Software Features and Functionalities Required by the Client Company for Supporting its
Business Activities
Telstra is involved in providing leading cloud based software for the businesses as per
their needs and requirements. It is involved in providing different types of cloud-based services
for many businesses by the use of its accredited cloud based services. The apps marketplace of
the company is involved in providing different type of cloud-based software solutions to the
businesses such as customer relationship management, accounting services and others. As such,
the integration of the cloud-based accounting software packages would help the company to
easily manage its complex financial transactions(Marsden, 2013). This would enable the
company in responding efficiently to its client needs through gaining easy access to their data
and systems and developing strong relationships with them. The use of cloud-based accounting
software package would enable Telstra to reduce the cost of managing its complex accounting
systems and thus enhancing its competitive position within the marketplace (Telstra Corporation
Limited, 2017).
The company also requires the integration of the software technologies that is able to
improve the security of its accounting system as it stores accounting data of different client
organizations and therefore addressing the security needs is largely essential to maintain
confidentiality in their information. The accounting software package integrated by Telstra also
should possess the feature of centralizing the data received from multiple clients and achieving a
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unified view of its financial position (Curtis, 2010). This would enable in improving the visibility
of the businesses by developing more transparency in its business operations and getting real-
time content for facilitating its strategic decision-making processes. The backing of all the
accounting data in a central spot is required by Telstra so that it can be easily be accessed as per
the needs and requirements of its different clients marketplace (Telstra Corporation Limited,
2017). The use of a cloud-based accounting software package would enable Telstra to enhance
its competitive position in the mind of its clients by reducing the paperwork and simplifying its
accounting processes and procedures (Mageto, 2017).
Software Selection
a. Brief Description of two accounting software package vendors and their products
 MYOB: Mind Your Own Business (MYOB) is recognized as an Australian multinational
company that is involved in providing tax and accounting software services to small and
medium sized entities within the country. It is a publicly listed company traded on ASX
and operates within the information technology sector of the country. The company is
involved in developing and providing accounting management products such as MYOB
Essentials and MYOB Accounts Right. MYOB Essentials is online accounting software
that is mainly developed for providing help in maintaining accounting transactions of
new and smaller businesses. It is browser-based software and thus can be installed easily
on Windows or Mac. On the other hand, MYOB Account Right is regarded to be a fully-
featured accounting software that is mainly developed for small and medium sized
businesses to improve flexibility in a firm accounting processes. The major features of
this accounting software are providing an integrated payroll, managing inventory and job
costing. On the other hand, MYOB Essentials is involved in managing cash flow and
complying with the required policies and regulations of the Australia Taxtaion Office
(ATO) (MYOB, 2017).
 XERO: Xero is regarded to be a publicly listed software entity of New Zealand involved
in developing and providing cloud-based accounting software solutions to the small and
medium sized entities within Australia and New Zealand. It is headquartered within New
Zealand and carries out its operations through a number of subsidiaries such as Hubdoc
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Inc., Max Solutions Limited and other such subsidiaries. The accounting software
product provided by the company is based on the software as a service (SaaS) model. The
accounting software products provided by the company are largely used in about 180
different countries. The different accounting software solutions provided by Xero include
billing and invoicing software, financial reporting software, and small business
accounting software and subscription management software. Xero is a web-based
accounting software and therefore can be accessed anywhere with the use of internet
platform. The businesses can easily manage their cash flows, accounting transactions and
details of the account from nay part of the world using the accounting software of Xero
(Xero, 2017).
b. Comparison of the features of two cloud-based accounting software packages
Comparison of features and functionalities of MYOB and XERO
Features/
functionalities
XERO MYOB Best Option
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Cost
Cost of Xero
dividend on per
month basis
Starter pack:
$25/month, standard
pack: $50/ month
and for premium
pack $60 / month
In premium package
there is benefit of
payroll for 5 people
and if more people is
required client has to
paid higher monthly
fees
MYOB offers two
accounting software
package with different
pricing structure:
MYOB Essential and
MYOB Accounting
right. Both of these have
different pricing
structure based on the
requirement such starter,
plus and premier.
MYON Essential has
been charged as
$25/month for starter,
$40/ month plus and
$50/month for premier.
In case of MYOB
Accounting Right the
package cost $61/month
for starter, $92/month
for plus and $121/month
for Premier.
Here, Xero is the
best option as it
offers only one
package and
pricing structure of
Xero is very
straight forward to
understand as
compared with
MYOB.
Company accounts per
subscription
Only one company
accounts is allowed
per subscription.
The Myob premier
AccountRight
subscription allows two
company accounts.
Myob provides
more company
accounts per
subscription hence
it has better
advantage as
compared to
XERO.
Installation and Sign-Up Xero is very easy, Installation and sign up Clearly Xero is
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Process user friendly, slick
and intuitive.
process of Myob is also
easy and user-friendly
but there are many
advance features in
Myob AccountRight
such as Inventory
management and job
management which
require use of particular
software to be installed
on Windows (Lane,
2018).
easy to use.
Accessibility Can be used both on
PC and Mac
Myob Essential can be
used on both PC and
Mac but Myob
AccountRight can be
used on PC
Xero has no
limitation
regarding
installations.
Payroll
Xero provides
payroll for only one
person under starter
and standard plans.
Users can avail more
payrolls on extra
cost.
Myob Essential starter
and plus pack allows
one payroll while
premier allow unlimited.
Myob AccountRight
starter do not provide
payroll but plus and
premier allows
unlimited payroll.
Myob proves to
best as it offers
unlimited payroll.
Reporting Xero runs multiple
report at once
Myob run single report
at once
Xero has ability to
report multiple
reports at once
Invoice Highly Customized
invoice available
Invoice can be
customized under Myob
Xero is far better
in providing
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AccountRight (Zinghini,
2017).
customized
Invoice.
c. Identification of the most suitable vendor and accounting software package for the client
company
The most suitable vendor and accounting software package for the client company
selected from the above two discussed accounting software is Xero. The use of cloud-based
accounting solutions provided by Xero is regarded as the best option to be sued by Telstra based
on its software needs and requirements. The integration of Xero based cloud-accounting software
would enable Telstra in enhancing flexibility and ability of its accounting operations as per the
needs and requirements of its core business (Telstra Corporation Limited, 2017). The use of
XERO would enable in simplifying its accounting processes such as calculation of insurance
premium and centralizing all the accounting data of its clients. This would enable the company to
develop smarter and innovative financial services platform for its clients by gaining a better
understanding of their accounting needs and requirements (Marsden, 2013).
Telstra is involved in managing huge and complex financial transactions as it is involved
in providing wide range of telecommunication products and services to its clients. As such, it
maintains huge workforce diversity for carrying out its different business processes and systems.
This requires the company to manage huge accounting data related to payroll of its employees.
The company has transacted about 1 billion of Australian dollars of monthly payroll for about its
370,000 employees in the last year. Therefore, the use of Xero based accounting software would
enable it in maintaining an online system for developing a centralizing database system for
managing its different payroll activities (Smith, 2019). It can also use the online bill pay system
of Xero for keeping a track of all its billing activities and ensuring that it has received payments
from its entire client base. It would also enable the company in complying with ATO regulations
and development of an innovative online tax platform for managing its tax related accounting
activities. The wide accounting software solutions and high quality user support makes Xero
adequate accounting software to be used by Telstra to manage its complex financing and
accounting activities (Karlovsky, 2014).
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Conclusion
It can be said from the overall discussion held within the report that accounting software
packages such as Xero and Myob are developed for simplifying and enhancing the credibility of
the accounting transactions of businesses within Australia. As such, Telstra that is mainly
involved in providing cloud-based software services to its clients should adopt the use of
accounting software packages for managing easily its complex financial transaction activities.
This would helps in promoting long-term growth and profitability of the business by reducing
cost in managing its complex financing activities and also helping in developing more innovative
cloud-based services for its clients.
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References
Curtis, V. 2010. Getting Started in Bookkeeping For Dummies. US: John Wiley & Sons.
Karlovsky, B. 2014. Xero forms strategic partnership with Telstra at Xerocon 2014. [Online].
Available at:
https://www.arnnet.com.au/article/553031/xero_forms_strategic_partnership_telstra_xerocon_20
14/ [Accessed on: 1 May 2019].
Lane, S. 2018. Xero vs MYOB: Which will work better for your business. [Online]. Available
at: https://www.listonnewton.com.au/information-centre/xero-vs-myob-which-will-work-better-
for-your-business [Accessed on: 01 May 2019].
Mageto, J. 2017. Accounting Softwares in Australia. An Overview. Germany: GRIN Verlag.
Marsden, S. 2013. New Zealand Master Bookkeepers Guide. New Zealand: CCH New Zealand
Limited.
MYOB. 2017. About Myob. [Online]. Available at: https://www.myob.com/au/about [Accessed
on: 1 May 2019].
Smith, H. 2019. Xero For Dummies. US: John Wiley & Sons.
Telstra Corporation Limited. 2017. Cloud Services. [Online]. Available at:
https://www.telstra.com.au/business-enterprise/solutions/cloud-services [Accessed on: 1 May
2019].
Xero. 2017. Features to run every part of your business. [Online]. Available at:
https://www.xero.com/us/features-and-tools/accounting-software/ [Accessed on: 1 May 2019].
Zinghini, F. 2017. Xero vs. MYOB – Which Accounting Software Is Best For Your Small
Business. [Online]. Available at: https://www.fieldgroup.com.au/xero-vs-myob-accounting-
small-business/ [Accessed on: 01 May 2019].
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