About the reviewer: Tim Richardson is an Australian CPA with CFO and senior finance experience with large SMEs and multinationals. He teaches small business management at Holmesglen TAFE in Melbourne. Tim is a Director at GrowthPath where he consults with small and medium sized businesses.

GrowthPath is using MYOB LiveAccounts (and trialling Xero). Updated November 3, 2011.

Overview and core functionality

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 sophisticatd 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 busienss hours, we have not had trouble accessing the system. Performance is barely adequate. High volume data processing would be a nightmare, mainly because the interface is not designed for it. It's so slow it would drive a professinal member of a finance team up the wall very quickly. The browser code or the servers are fairly slow, and the interfaces is not streamlined for multiple transaction entry. For example, at the time of writing, completing a spend money transaction does not set you up to enter another one. Instead, the system jumps back to the top level of the relevant module. That's very frustrating if you've waited to batch a few entries. We reported this problem a couple of weeks ago.

The bandwith requried 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.

AR

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, and no customer-deposit functionality. GST and Australian compliance handling is good out of the box. Surprisingly, Xero also doesn't allow credit terms per customer.

AP

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).

Receipts

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. If a customer part parts, you need to set up a part payment in the Invoices module to match.(Xero offers the same functionality, except that the form goes direct to the bank; MYOB handles the paperwork).

Payments

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 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.

Reporting

Reporting is basic. Reports are usually exported as PDFs, although this doesn't work consistently. I have a Mac and Firefox; often I get a PDF which is saved as an HTML file. I need to rename the file to .pdf before viewing it. (this bug is fixed). There is usually no export to Excel feature in the reports.

Above all, I miss a cashflow report (which Xero does have).

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. An 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. 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.

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 flexibiity 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 summary

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.

After trialling Xero, I realise that these products are more distinct than I expected. MYOB is a better low-end product for very small businesses who want to look after book-keeping themselves. Xero advises from the beginning while setting up the system that you should invite your accountant to participate. 

More sophisticated users will prefer Xero: it has better reporting. Businesses expecting growth and employment should look at Xero.

Bookkeeping courses are now covering Xero as well as traditional MYOB.