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MYOB, Reckon, QuickBooks Online, MoneyWorks, Xero, Saasu reviewed
After talking to bookkeepers and accountants we decided against trying to pick a ‘winner.’ In practice, there is no one ‘best’ piece of small business accounting software, as different packages will suit different businesses. A business that provides services is unlikely to need an inventory module, a retailer probably won’t need time tracking and billing facilities and a payroll capability becomes more important as the number of employees rises.
For this roundup we picked versions that would suit a relatively simple business - a photographer that provides services and products, but does not require inventory, and extends credit to at least some customers.
Your requirements might be different. If you like the sound of a particular product we've looked at, but it lacks something essential for your business (for example, multi-currency support), check to see if there is another version under that brand that suits you. Several of the products reviewed here come in multiple versions.
What did we learn, examining these products? We found good and not so good points about every single one of them. As we approached the end of this project we found ourselves wishing someone would learn from the mistakes made by other developers and produce a really good and comprehensive small business accounting system without the shortcomings and irritations we encountered while examining these seven products.
The lesson? Think about the way your business works and don't assume these products will all accommodate every single thing your business needs. If nothing else, these reviews illustrate that.
There are plenty of names in the market that we have not included such as NetSuite, Arrow, Sybiz and so on. What we have done is picked a selection of generally well-known packages with the aim of helping you understand the key features to look for, and how the various products compare.
There are two notable exclusions from our coverage. The 2013 version of Reckon’s Hosted product was not available when we began testing, and there seemed no point in reviewing a version that would be obsolete by the time this article was published. Reckon One, the company’s new cloud accounting system, was unveiled after this article was written and was not yet publicly available when this article was published. You can read about it here. We will no doubt follow up this article with coverage on the BIT site about this product.
Some tests we gave each product
To show how various accounting products work differently, we gave each of them a test: we picked several very specific tasks and checked to see how well each product handled each task. While your business might have no need for these particular features, the point here is to illustrate that the products all work differently.
Task 1 - Invoicing
The first thing we looked for regarded invoices. If our photographer did mostly consumer work (weddings, portraits, for example) then invoicing would not be a big deal. But we are assuming that this firm does commercial work (photos for catalogues, annual reports and magazines), and we know from experience that larger companies sometimes have hard and fast rules about what they consider a valid invoice. It's relatively common to require a purchase order number and although that’s a standard field on most invoice templates, it makes life easier for our photographer if the software ‘knows’ that invoices sent to certain customers must show a purchase order number. We looked to see if each product did this.
Another situation we see reasonably often is where invoices must be sent to the department, branch or business unit that ordered the goods or services, but the actual payment is made centrally. If you work for more than one section of such an organisation then your bookkeeping chores will be noticeably more laborious unless your accounting software explicitly deals with this situation.
Task 2 - BAS report
The introduction of the GST spurred the adoption of computerised accounting among small businesses that were previously happy with paper systems. If you prepare and submit your own BAS forms, you need the software to generate a BAS report, and our preference is for one that generates a report that mimics the actual form. This practically eliminates the risk of copying numbers into the wrong fields. If you’re less visual, a report using the item labels (“G1”, “W1” etc.) will do the job. Even if you use a professional to prepare and submit your BAS, a BAS report is still useful so you have an idea of the amount of GST you will have to remit.
Task 3 - Bank feeds
Much of the labour in bookkeeping is in data entry and in some situations that can be significantly reduced by bank feeds, which automatically transfer bank transactions into the accounting system. If you pay all of your expenses from your cheque account or credit card, all you’ll need to do manually is assign the expense to the correct account - and if all of your purchases from a particular supplier fall into the same category, even that may be automated - for example, the software can automatically file any payment to Telstra under "phone bill"). Bank feeds are less valuable if most of your expenditure is on credit terms and you want to enter bills as they are received so you can get a picture of your future liabilities.
Task 4 - receiving payments
If your customers routinely make one payment to cover multiple invoices (for example, they require a separate invoice for every purchase or service performed, but only pay you once a month), life is a lot easier if the software intelligently applies the payments to invoices. There’s more work if you have to allocate them manually or if it blindly allocates on an ‘oldest first’ basis. We looked to see how each product handled this.
Now, let's look at each product. First, the desktop accounting software...
We think MoneyWorks deserves consideration by businesses with customers that make particular demands about the information shown on invoices (for example, order numbers), and it is also the only desktop product we tested that works on OS X as well as Windows.
We found MoneyWorks Express generally straightforward to use, although the proliferation of windows can be confusing and some activities take more clicks than we’re accustomed. For example, to create a new invoice from the Navigator (home) window, you click the Sales Invoices button which opens a separate window, where you click the New button to actually create the invoice. [UPDATE: Cognito, the company behind the MoneyWorks product, contacted us to point out that you can click the blue + on the Receipts or Payments icons in the Navigator window to create a new transaction.] While that could be improved, it may be a price worth paying.
Unusually, a comprehensive manual (not just onscreen help) is provided, which we found useful for tasks such as importing data (for example, a customer list), or customising invoices or other forms, or creating them from scratch.
Will MoneyWorks Express make your life easier? Let's look at some of the special tasks we tested it on.
One is to do with purchase orders. Some customers - notably large organisations - will only pay invoices if they bear the customer’s order number. While accounting products typically make provision for order numbers, MoneyWorks is unusual in that can be set to require a purchase order number when creating invoices for particular customers.
One feature that will be appreciated by some users is ‘head office billing’ which simplifies processing when a customer’s multiple branches or departments must be invoiced separately but payments are made centrally, often with invoices from more than one branch covered by a single payment. Without this feature - and it is lacking from most of the other products we tested - users must manually split such payments and that means extra work when receiving the payment and again when reconciling the bank account.
This product's other strengths in invoicing include provision for customer and prompt payment discounts, automatic credit hold if unpaid invoices exceed a limit, and recurring transactions (the latter being particularly useful for subscription-style businesses or service businesses on retainer, among others).
Most of the main accounting functions are included (some, such as quoting, are only present in more expensive versions of the software), though payroll is absent across the range.
There’s no provision for bank feeds (a feature that can be a big timesaver), but at least bank statements can be imported.
Unlike the other desktop packages reviewed here, the MoneyWorks family is available for OS X as well as Windows (MYOB has a different product for Mac, as opposed to a Mac version of its Windows software).
The Gold edition is required if you need inventory, time sheets or multi-user operation, while the Datacentre edition allows for multi-company use and provides for integration with web-based systems including mobile apps.
MoneyWorks Express is a feature-rich accounting system, and a more streamlined user interface plus bank feeds would make it an even stronger contender.
MYOB AccountRight Basics
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One of MYOB’s big advantages is that its products are so well known among bookkeeping and accountancy practitioners as well as potential employees. You don’t have to look far to find someone with MYOB expertise or experience, though we are not completely convinced that AccountRight deserves its popularity.
As with MoneyWorks, AccountRight’s use of multiple windows seems to us to be confusing and messy. We particularly disliked the way the default size of new windows is often too small for the contents, even though there’s room in the screen for an appropriately sized window. The design seems stuck in an era when PC screens were much smaller, although there is a preference setting that allows the program to remember window size and position once you have adjusted it to your taste.
So how useful was MYOB AccountRight Basics in practice? We found that various aspects of the program seem to make operation more difficult than it needs to be. Let's look at our special task list for some examples.
First up is invoicing. While the program notably supports volume and early payment discounts and makes provision for credit limits and monthly charges for late payments, it will not force the entry of a purchase order number when creating an invoice. Disappointing, but common with most of the products we examined.
Another quibble we had with invoicing is that the quantity field unusually defaults to 0, not 1. While that does reduce the risk of errors by making the user explicitly enter the quantity, we found it quickly becomes irritating if you most often sell in single units (for example, a monthly subscription or an agreed price for a job). We see this as a shortcoming unless you have trouble remembering to enter quantities - 0 units is more obviously wrong than one unit.
Let's look at how AccountRight handles our multiple-payments test. When receiving a single payment for multiple invoices, you get a choice between having the payments allocated by ‘oldest first’, or manually allocating the payment to particular invoices. If you have customers that habitually pay invoices out of sequence and without quoting your invoice numbers, this task would be less tedious if the program determined the oldest open invoices that add up to the amount received, as they are the most likely candidates. Blindly allocating to the oldest invoices without considering their values often results in a part payment an invoice, which is unlikely to be your customer’s intention.
Sub-customers are laboriously handled through a dummy account and transfers rather than MoneyWorks’ more efficient ‘head office billing’ approach.
The BAS report is a facsimile of the ATO form, which is good in our opinion. There is a useful selection of other reports, but section headings were sometimes followed by a page break rather than keeping heading and data together (a workaround is to start every section on a new page, but that wastes paper), and reports are generated relatively slowly (MYOB is working on improvements in this regard) even though the sample file was quite small. Indeed, AccountRight seemed generally sluggish compared with the other desktop software we tested.
On the positive side, we liked the integration with Microsoft Office (for example, for sending form letters or to sync contacts with Outlook), along with the ability to import and export various types of data. And although the software runs on your own computer, data can be automatically copied to the cloud so your colleagues and accountant or bookkeeper can simultaneously access live data.
Almost all of the major features we expect are included in AccountRight, though some (notably inventory and time recording and billing) are only present in the more expensive versions. Also, the payroll capability in AccountRight Basics is, well, basic, and some businesses will need to consider AccountRight Plus for that reason.
AccountRight is also available in Standard ($39 per month; adds inventory) and Plus ($65; adds time billing and detailed payroll) editions.
We know MYOB’s software is widely used, but basic tasks such as generating invoices and receiving payments seemed relatively fiddly, and we would welcome more responsive operation.
Reckon Accounts EasyStart
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As it only does cash as opposed to accruals accounting, Reckon Accounts EasyStart is one of the most limited programs we have looked at here. It is more than a cashbook program as it does handle invoicing, though we found some invoice-related features irritating.
On the positive side, we found the interface to be usefully arranged. The program uses a single window with browser-style Forward and Back buttons plus a pop-up menu to the right of the Forward button to take you straight to any of the open views. We find this approach more productive than having windows splattered across the screen, as long as you don’t need to compare or copy and paste information from one to another. Conveniently, when you return to a view (perhaps a filtered list of invoices) it is as you left it, so there is no need to re-enter the criteria or other data.
Operation is generally snappy and we rarely had to wait for the program to catch up. And producing a batch of invoices is quick and easy once the customers and items have been set up.
So how cleverly did this product deal with our special tests?
Let's look at invoicing. We quickly noticed some unusual things. The first two columns of the invoice entry form are Tax and Tax Amount. It makes more sense for these to be on the right of the form, as you normally start by entering the item or quantity. The column order can be changed, but we found that task fiddly, especially for the printed versions of forms where we were unable to get the headings of newly added columns to match the style of the predefined ones.
Another frustration was that it is not possible to turn off the beep that sounds after certain operations, such as creating an invoice.
Also there is no mechanism to force the entry of purchase order numbers if required by customers. Sub-customers are handled through a tedious workaround involving a contra bank account and journal entries (much like AccountRight Basics).
Uniquely there’s no BAS report in this particular version (the assumption is that users will leave that to their accountant or bookkeeper, but to our mind this is a core feature of small business accounting software), but if you need either of the latter two features, the more advanced versions of Reckon Accounts include online BAS lodgement via SBR (Standard Business Reporting).
There are also some other things missing that we found in competing products - inventory, payroll and even bank feeds or bank statement importing - though we stress that some are available in the more expensive versions. Reckon Accounts is also available in Accounting (adds accruals accounting, inventory, SBR lodgement, Microsoft Office integration, and more), Plus (adds payroll), Pro (adds multi-user, multi-currency, job costing and more), and Premier (adds multiple price levels, enhanced reporting, and is available in six industry-specific versions).
We generally like the way programs in the Reckon Accounts range work, but we are concerned that EasyStart may have been over-simplified and that for one reason or another (if only to avoid that infernal beeping!) most businesses will need to select one of the more expensive packages in the Reckon range.