MYOB vs Xero: The accountancy software joust

Accountants as sales game-changers

The ‘accountant’ factor becomes the next game-changer. Why? Because with over 13,000 accounting practices in Australia, it seems the best way to influence and shape the buying power of customers is through the channels they obtain advice from.

Being a co-founder of an online accounting firm for small business, both MYOB and Xero currently offer cloud-based products that can be a compelling choice for SMEs. Ultimately, we as advisors can significantly influence this choice.

For some users, the MYOB software better suits them, as they know it well; it gives them what they need and is available at a reasonable monthly price. Xero, on the other hand, provides more features and add-ons. However, this is offset by a much higher price than MYOB. From our perspective, both offer products that give our customers what they want.

MYOB and Xero go head-to-head

But which vendor gives accountants the better support?

And in this department, Xero seems to have got the jump on MYOB. Far from viewing accountants as a key source of revenues, Xero effectively enlists them to act as its sales department. By doing so, it can ultimately secure valuable revenue streams from their SME customers. It all revolves around where the money comes from.

MYOB has viewed accountants as one of its major ongoing revenue streams for many years. This has created a level of resentment, given MYOB has used its dominant market position to increase prices on its products to accountants through subscriptions and partner programs. On the other hand, Xero views the accountant’s SME customers as the key source of revenues and keeps the accountants on side, using such lures as free tools for the accountants effectively paid for by the SMEs.

The problem MYOB faces under this scenario is that if it starts losing accountants, what opportunity will it have to generate future income streams from SME customers? Can MYOB offset this by creating the Google factor around its products to bypass the accountants and keep entrepreneurs and SME customers on side?

Only when we see the answer to these questions will we know whether MYOB is the quality investment that Bain thought it was.

Aaron Wallace is a co-founder and online operations director at Nudge Accounting and a lecturer at the University of Technology, Sydney.