There’s no question that a good accounting software package can revolutionise the way businesses large and small can work. Depending on the package, accounting software can automatically generate and send invoices, create quotes, manage inventory, calculate employee payroll and superannuation, submit BAS statements electronically and interface with the ATO’s online tools. They can also provide business performance feedback, tracks jobs and expenses and much more.
At the personal level, accounting software can also make your annual tax submissions much easier, it can track stocks and investments, manage household budgets and inventory, automate payment of bills and even track the amount of carbon you’re using.
But which one is right for you? For most small business, switching accounting and invoicing systems is a big deal, so you want to get it right.
Accounting software is tiered
There are two major providers of accounting software in Australia: MYOB and Reckon (which releases Australian versions of Intuit’s Quicken and QuickBooks). Both provide solutions for small, medium and large businesses as well as sole traders. Reckon also provides personal accounting software, under the Quicken name.
Quicken Personal is the basic package. It covers banking and bills, home budgeting and annual taxes. Quicken Personal Plus adds investments and stock tracking, home inventory management, carbon management, superannuation and more.
When it comes to business accounting (even if the business is a sole trader), the software from both MYOB and Reckon is tiered. That is to say, each tier contains nearly all the features (represented by ticks in the table below) of the tiers below it, plus some significant additional features. The key to choosing the right accounting software is to work out how far up the chain you should go. At the bottom rung, the software typically costs less than $300, with packages aimed at larger enterprises going up to nearly $2000.
Those chains are rough mirrors of each other: QuickBooks Accounting is roughly equivalent to MYOB AccountRight Standard, for example. The choice between them often comes to price, personal interface preferences and support for some finer details needed by a specific business.
Both vendors also have several products that don’t fit neatly into that chain. Quicken is for personal finances, for example, and MYOB has Just Invoices, which is for people who aren’t interested in the accounting elements and just want a system for generating and tracking invoices.
The steps after this will be a guide to let you know how far up the chain you should go.
Tier one: Sole trader or very small business
The solutions to look for here are: MYOB Just Invoices, MYOB AccountRight Basics, QuickBooks EasyStart and QuickBooks EasyStart Lite.
MYOB Just Invoices does what it says in the title: it creates and tracks invoices. MYOB AccountRight Basics and QuickBooks EasyStart add GST calculation and submission, job tracking, expense management and other things that a small one or two person operation requires. (EasyStart Lite is similar to EasyStart, but has a strict limit on the number of clients/customers supported).
Tier two: Small retail business
At this tier, we’re looking at MYOB AccountRight Standard and QuickBooks Accounting. The big additions here are inventory and supplier management. These features allow you to keep track of what you have in stock, largely automate the ordering of new stock and keep track of all suppliers
MYOB and Reckon have an additional product in this space called RetailManager and QuickBooks Retail Point of Sale (respectively), that support fast sale processing, laybys, customer contacts and promotion and more. They’re not really a replacement for the accounting packages, however – they don’t support many accounting features. Instead they work with the accounting software.