GrowthPath's review of Xero, Saasu, MYOB and QuickBooks is a detailed comparison of the leading cloud accounting software for mid-sized and larger Australian SMEs. We discuss the pros and cons of moving to the cloud, and how cloud accounting is the building block of cloud ERP.

UPDATE: On March 8, 2018, Saasu basically announced it was withdrawing from the SME accounting market (to focus on micro-businesses). This article has not yet been updated to reflect this change. 

In a hurry? This short article covers the key initial questions: Top questions about migrating to cloud erp
If you want more coverage of cloud ERP choices, see this detailed comparison of Unleashed, Dear, Cin-7 and how they work with Xero 


To summarise, for most Australian SMEs, Xero is the best choice. Xero has more functionality, more extensions and more support than its competitors. It's only technical rival is QuickBooks online, but Quickbooks Online has a small market share in Australia. The dinosaur is MYOB, which has a confusing approach to cloud accounting, and an inferior offer. 

Status of the market in Australia/NZ: Xero has won

The Australian SME market prefers to standardise; in the past MYOB was dominant. In May 2017, we see that Xero has around 500K Australian subscribers, about twice MYOB's cloud numbers. MYOB's most recent revenue growth is 13%; Xero's is above 40%. On this trajectory, Xero's revenues will pass MYOB in the next 12 months. Because it is now so easy to find Xero-welcoming staff, accountants and book-keepers, and because of Xero's other advantages (best product, the biggest ecosystem of third-party integrations), Xero is the default recommendation for GrowthPath, in Australia/New Zealand. In other markets, it faces much more competition. Xero is doing well in the UK and it establishing itself in the US. GrowthPath also has clients using it in PNG & Singapore. 

Risks of moving to cloud accounting

When it comes to disadvantages of cloud accounting, there are three significant concerns: security, ownership of data and what to do if your internet connection goes down?

Security concerns are the most complicated of these three potential downsides.These points are covered here:  cloud risks for SMEs

Key advantages of cloud accounting

Cloud accounting levels the playing field for SMEs

The IT playing field is levelled: previously only larger companies could afford the IT needed to become a data-driven business.

Cloud Accounting is a building block for Cloud ERP

For larger businesses, there are potential cost savings when moving away from traditional ERP software: it is expensive to implement, to customise, to integrate and to own. Staff training costs tend to be much lower with cloud software, with simpler user-interfaces everyone is familiar with. 

Above all, more complex businesses can use the Open API revolution to integrate IT like never before. Lower costs are not the real potential of cloud-computing. APIs are the most revolutionary aspect of cloud computing because they offer the prospect of integrating the IT used in all aspects of modern business, including online sales, CRM and marketing automation.

It was always possible to build interfaces between a bank feed, an online store, a pick-and-pack logistics provider and a traditional ERP system. But it's very expensive, and the skills are hard to find since each package has a proprietary way of working, implemented on a narrow set of technology options. With cloud software backed by Open APIs, integration is easy, and it is supported by a wide array of technologies and programming languages.

About GrowthPath

GrowthPath provides independent, vendor-neutral advice to its clients, where 'independent' means in the best interests of clients, with no commissions or relationships to third parties. We cover IT solutions designed to improve profit for small and medium-sized Australian businesses in retail, wholesale, hospitality, manufacturing, professional and medical services. 

Tim Richardson is a Director of GrowthPath. He is an Australian CPA holding a Masters of Accountancy and degrees in Computer Science and Linguistics, with CFO & Finance Director experience with large SMEs and multinationals. He had senior IT and Finance roles in Indonesia, Asia Pacific and Western & Central Europe. Before moving into finance, he was an ERP and business analytics developer, consultant and project manager. His commercial experience covers automotive, lighting, repetitive manufacturing, retail, wholesale, high-volume online commerce and medical services.

The Open API revolution of Cloud Computing

The traditional model of business IT is all-under-one-roof monolithic IT systems (the king of this jungle is SAP R/3; MYOB is its little brother by concept). These systems were hard to integrate with other software, requiring specialised skills in proprietary languages and even proprietary databases. Once a business committed to a platform, it was largely locked in. After paying high upfront licence fees, they could look forward to expensive annual maintenance fees. Businesses relied for implementation on consultants who were narrow specialists in a particular proprietary solution (in fact, software specialists were themselves locked into particular solutions; moving to a new system was a traumatic career change). The period required to amortise the cost of the investment introduces a risk: what if business needs change during that time? Monolithic systems can become straight-jackets.

The monolithic approach risks a "Jack of all trades, master of none" approach. Why did they dominate business software? Before the rise of modern APIs, the cost of wiring together "best of breed " software was so high that monolithic systems ruled the earth. Now, they are an endangered species. Expensive to own, slow to innovate and hard to use, they are on the way out.

The API revolution can be starkly illustrated by the old and new approach to integrating software. A traditional software solution charges very high fees to buy the "developer licence" which only then provides the documentation and software allowing programmers to import and export data. Apart from the licence cost, APIs were poorly standardised and required a lot of love and attention. There was an entire breed of software called "middleware" which sprung up. Putting together systems required expensive specialised knowledge.

Cloud providers provide access to the API for free. Usually, you don't even need to register. They all support the same approach to sharing data and commands and allow developers to use open-source languages like Javascript and PHP. There are thousands of developers in Australia alone who can take two APIs they have never seen before, and get some basic interchange working later that day. 

So the API revolution finally makes it possible for small businesses to combine best of breed software, something which not even large companies would attempt ten years ago.

Cloud ERP

A good example of integration potential for wholesalers is cloud ERP solutions. The three best options are Xero + Unleashed,  Xero + Dear Inventory, and Xero + Cin7.  Read more about Cloud ERP solutions

MYOB Account Right and 3rd party extensions

There are many third-party extensions for traditional MYOB: packages which add features. They are installed locally, next to a MYOB installation. 

Today, MYOB has three technical approaches in the market: (a) MYOB "Classic" (e.g AccountRight Premier, Enterprise), (b) the hybrid AR Live and (c) the pure-cloud MYOB Essentials. The API is different in each case, so vendors of extensions will have different levels of support across these three options. That is, if you rely on an extension in classic MYOB, don't expect it will be available on the other two platforms. MYOB Classic requires access through a slow and not very robust ODBC connection which connects locally. AR Live vendors can offer API-based cloud support if you use this product in cloud mode (which even MYOB says is slow). If you use it locally, the extension vendor must also support local installations. Even in local mode, AR Live no longer supports the ODBC connection, so classic extensions don't work. 

It's a complicated picture which will make things difficult for vendors. MYOB Essentials is a real cloud product and is included as such in this page. It has a different API to AR Live. 

When you terminate your cloud subscription?

Migrating accounting system is never much fun. If you cancel your subscription, it is usually to migrate to a new system. In a nutshell, cloud solutions are neither much worse or much easier for this migration. 

If you want the view the data read-only, you could export from the old system both final reports and journal transactions saved in text files or spreadsheets.

This is clearly inferior to the traditional desktop software which has a perpetual licence: you can always open MYOB and view an old file. It would be nice if the cloud vendors provided permanent read access to terminated subscriptions. It is a common question.

Xero lets you reactivate an old account. Xero does not offer free read-only access, but without needing new transactions or payroll, the subscription can fall back to the lowest level of plan.

Profit Engineering ... the business case for changing systems is more than simple efficiency

At GrowthPath, helping clients choose better systems is a means to an end, and that end is profitable growth. When you're ready to start using new insights to grow your business, you may be interested in our Profit Engineering approach.

Some articles worth looking at are:

Smaller businesses looking simply for a cloud accounting package

Smaller businesses come here looking to find a bookkeeping solution ready to go, and they will compare functionality to the benchmark, which is usually MYOB. 

Xero is the best choice, as you'll see below. Xero has a better API, and it has ready-to-go integration with more software, including some very good supply chain packages. However, it does not have very cheap plans. Competitors, particuarly those struggling to gain market share, offer very cheap plans with limited features. If you feel you have to go down the route of a cheap plan, Quickbooks is worth a look because it offers a path to a more fully featured system.

Three reasons to change accounting system

The heart of the traditional business software is accounting functionality. Many visitors to this page are in one of these camps:

  • Businesses which are looking to exit MYOB or some other entry level accounting package because they have outgrown it
  • Businesses which are looking to exit traditional ERP software because they seek an alternative to expensive licence fees or because they want to move to the cloud
  • New businesses looking for a system choice offering mobility and better access to other cloud software, such as CRMs or business intelligence

In all cases, visitors to this site are considering a cloud accounting system at the heart of their IT stack. Of course, by now, many businesses have cloud applications doing important roles: at the very least; websites, online stores, and possibly marketing automation tools like Infusionsoft.

Xero will do the job for most SMEs, except those who have many inter-entity transactions.

Core accounting (AR, AP, payroll, BAS...) is quite generic. So many different businesses can use the same software: plumbers, panel beaters and gift shops could all use MYOB, for instance. As you follow business processes closer to the customers, businesses start to get more distinct from each other, which makes sense: interactions with the market are where businesses stand out from each other. One-size-fits-all software can't follow this path because the idea of one-size-fits-all breaks down. This part of the business, such as marketing, pre and post sales, new products and services or even remote sales, was left out. SMEs started find automation in these areas, like online stores, CRMs, product catalogs, but not from their accounting package. All these processes ultimately cause a cash flow and ultimately flow into the accounting system, so the accounting system is a good place to look for the foundation of business IT, even if it doesn't seem to help much in growing the business.

So where do the cloud-accounting packages stand? How do you choose?

The Summary

a) the core accounting functionality of cloud packages does not yet rival mature packages in some areas which may be important. However, functionality gaps are likely to be solvable by integrating another package. But complex, multiple-legal entity structures are not supported.

b) the ecosystem of connected applications is a key reason to make the move (CRMs, business intelligence, etc). 

c) For more complex businesses, Xero must be on the shortlist. Xero has the best ecosystem by far. In Australia, there is no compelling reason to consider Xero's competitors.

d) Businesses using traditional ERP packages can save a lot of money and dramatically modernise their IT with cloud ERP


Since Xero has won the cloud accounting market in Australia, it has dropped out of fighting with low prices. MYOB, Saasu and QuickBooks still have cheap pricing for reduced functionality. For Xero, the dominant driver of pricing is how many active payroll employees your process; monthly costs are in the range of $60 to $90 for most GrowthPath Xero clients. 

Inventory: Perpetual vs Periodic

Saasu has Perpetual Inventory in all plans. Quickbooks Online offers it in the "Plus" plan. In March 2015, Xero added perpetual inventory (a basic module; no API yet so it is not used by any third party apps). Quickbooks offers perpetual as well, but only in the highest plan. Perpetual is much better if you have stock.

The inventory modules of Saasu, Xero and QuickBooks are basic: they don't allow backorders, for example. 

So you may need to integrate with an advanced package. GrowthPath follows three such systems (Stitch, Unleashed and TradeGecko) and we are able to advise on an integrated solution for more sophisticated supply chain requirements. 

Learn more about choosing an inventory approach: You need to use Perpetual to understand what's going on in your business if you move stock.

Saasu has the most sophisticated inventory features in its Large plan. In this plan, you get customised attributes associated with items, which are then used on sales orders and purchase orders. Saasu defaults one of these attributes to location, for example. They can also cope with variants, such as size, colour or style. This feature is not very usable at present because the interface is clumsy and I hesitate to recommend it, but the necessary user-interface improvements are on the way.


Payroll is a complicated part of business. While these systems support payroll, it is basic and requires the use of skilled personnel. Payroll is an area where a small business should use a qualified bookkeeper, even if they have software that offers "payroll". Businesses with complex payroll should still consider outsourcing it or use dedicated software. Even clients with "big" ERP systems go down this path.

(This may be out of date) A note about QuickBooks Online: It is now delivered to the Australian market by its US parent, after many years of localisation by Reckon, an Australian business. Quickbooks Online uses a third-party payroll provider. The pricing tiers don't include many employees, and the prices rise fast. Also, the pricing agreement from QuickBooks says it can't guarantee what the payroll pricing will be in future. Xero and Saasu have their own payroll modules, and are much better value for money for businesses with more than around 20 employees. 


I am still looking for a good intercompany solution with cloud packages... this means an extension that automatically keeps inter-company accounts balanced. None of the packages here offers that, including the traditional versions. This is almost the last frontier of the cloud-based accounting packages for privately-owned SME needs. MYOB doesn't offer it either.

Saasu's Large plan at least offers a "consolidated P&L", which can combine the P&Ls of separate companies under the same subscription. I haven't used this. There are plenty of Excel solutions that are fairly easy to adapt to Xero, and no doubt there are plug-ins as well.

The real win for multi-entity businesses is automatic balancing entries for multi-entity entries (e.g. booking a rent expense into an administrative entity, and have it automatically split the expense to other entities, all the while creating balancing intercompany loan accounts). None of these packages offers that and I'm not aware of any third party solutions. Xero's API is good enough for this to be coded. Perhaps a project for me on a rainy weekend. 

The best solution, in this case, is to run multiple files and use a consolidation reporting tool. There are some options: there are third party apps which do this for Xero, and the advisor versions of Xero have consolidation options. But it means extra cost, although if you have a parent entity which has no payroll and does little trading (transactions with third parties) you can probably get by with a lower-cost plan.

Xero has some assistance: you can route a PO from one entity to appear as a SO in another entity, and the other way around. This removes some of the data entry.

Fathom is a cloud app which consolidates multiple files (Xero & others), as well as adding some more advanced reporting. It has some multi-currency capabilities. Also, Zoho Reports has builit-in Xero integration and is another path for advanced reporting. 

Multiple profit centres via sub-accoounts

QuickBooks and Xero have options to link transactions to "categories"; (these are sub-accounts in traditional terminology), to identify divisions, profit centres or cost centres. Xero calls these "tracking categories" and QuickBooks has classes. They are not a bad solution although they do require coding in some detail when doing data entry. You could set up a three-dimensional chart, eg acct, profit centre and cost centre. 

Historical Data

Data storage and processing of thousands of records are what computers should be good at, so it seems odd to focus on "historical data" ... except that MYOB, a big historical player in Australia, doesn't do history. Instead, it offers you "last year", "this year" and "next year". Data older than "last year" needs to be purged, and accessed by opening older versions of your company data. 

None of the other systems discussed here have such a limit. Oddly, MYOB's only competitor in this space, AccountRight Live, still shares this legacy, probably because MYOB has not yet changed the very old database engine.

Importing historical transactional data into a new system is trickier than it seems, but it is possible (if you are not using MYOB). Options are to build a basic data warehouse and fill it with historical transactional data as well as a feed from the new system.


Accounting reports are pretty useless for the decisions which help a business grow. The traditional reports are out of date and offer little to no insight into how you get sales, or what drives your profit. (The Profit and Loss and Balance Sheet are designed for outsiders like minority shareholders, banks and tax authorities). The only traditional report which I have much time for is the cash flow reconciliation (and in 2016 I say "hooray" to Xero, which now offers this report, called "Statement of Cashflows").

Analytics refers to software which lets you get closer to an up-to-date analysis of what you need to be focusing on. Regarding user experience, this is browser-based software that is heavily graphical and lets you "drill down" to see details, and "drill up" to keep a big-picture view. And so on. Getting good analytics is how small businesses become profitable bigger businesses, not just bigger businesses. 

None of these systems includes much in the way of analytics, although Xero has a report writer. There are a few cloud packages which serve as decent "business intelligence" packages. I am a fan of analytics and dashboards, which are a crucial tool of GrowthPath's profit engineering approach. GrowthPath has recently decided to make Zoho Reports our preferred solution. For more advanced businesses, the enterprise-class tool Pentaho has an open-source solution.

We shouldn't get carried away by the technology, though. Eighty percent of a good analytics implementation is carefully designing a handful of key business drivers specific for your business in the context of its competitors and its market. The software aspect is 20%. You don't need 50 KPIs with very cool charts. You need less than ten or otherwise, you can't focus. 

Business Control. Audit Trail and Lock Dates

MYOB is mostly used with no audit trail, because it is an optional setting, and nearly everyone turns it off. 

You should not be able to turn it off. In any case, you can't with Xero. Below is a screen shot of the log of changes to an invoice Xero has recorded. This is a very useful audit trail.

Other aspects of business control are enforcing separation of duties, which a system can do through its permissions module. The packages reviewed here have roughly equivalent roles, which I would describe as adequate for a small team.

Lock dates are another aspect of business control. Xero has a lock date for normal users and a special lock date for privileged users. This means normal users, and API users such as integrated ERP system can be blocked from entering transactions into last month, while the GL accountant or bookkeeper can still post month-end journals. This is an approximation of the feature of large systems which lets you lock AR & AP while keeping GL open. 


MYOB Essentials (formerly MYOB LiveAccounts) 

MYOB Essentials is a reboot, the second generation of its pure cloud bookkeeping package. It keeps the simplicity of the former LiveAccounts but offers a good API. MYOB lost years, and it suffers by being late to the market. However, MYOB itself appears to be resourcing integration with some well-known cloud packages, and the use of a web-based API means that building your own integration is easy (or cheap).

  • MYOB Essentials is well supported, with very helpful live support included in the subscription.
  • It's a real double entry accounting system with real live feeds from bank accounts (but it doesn't have Perpetual Inventory).
  • Given it's a real accounting system, it's not complex. It's fast to get started.
  • MYOB Essentials has some big functional gaps. No inventory, no support for different credit terms or even rudimentary job costing. It now has payroll, at least.
  • Reporting is basic. Almost no support for cash flow forecasting. Virtually no export to Excel.
  • LiveAccounts looks quite close to MYOB. The default chart of accounts follows the same numbers. The BAS report looks like BAS Link.

While Essentials is a big improvement from MYOB LiveAccounts, MYOB clearly does not expect it to appeal to "larger businesses" (which it defines as > $3m). MYOB points people to a hybrid-web version of its traditional MYOB product, AccountRight, and from there it offers MYOB Exo, a traditional (and not very impressive) ERP package. MYOB is steadily adjusting to the new world; it remains to be seen what happens to its market share. 

MYOB AccountRight Live

Most of MYOB's customer base is using AccountRight Premier, the traditional MYOB product. It is a technological dinosaur -- a slow, crash-prone non-server backend with a limit of three years of data and idiosyncratic user-interface which hasn't changed much. Although recently MYOB has made the interface look more modern, and MYOB has used a much better database file format for the .myox files of recent versions. Reports from businesses I work with tell me this doesn't help when more than a few users are active, and reporting is still as slow as ever. 

MYOB has two cloud solutions: MYOB Essentials, targeted at the low-end of the MYOB customer base, and the only hybrid product on the market, AccountRight Live. Hybrid means it is possible to keep the data in the cloud, allowing easy remote access. The software normally used to access cloud software is a browser, but in the case of AccountRightLive, it's a Windows-only package (even when using the data 'in the cloud'. So you still need Windows and all that entails. No OS X, Chromebook, Linux, iOS or Android access. 

AccountRight Live is a new product despite the familiar name. The latest pricing options have higher-end plans which offer stock and payroll; the functionality may not be exactly the same as AccountRight Premier but it's close (on the more expensive plans). It's not multi-currency has it's inventory module is weaker. It doesn't support the ODBC driver, which is bad news for businesses which use add-on software for MYOB, but it has an API. Accessing AccountRight Live requires use of AccountRight installed on a Windows PC. It is has two modes of operation. In "cloud" mode, users are accessing a MYOB file on the cloud. No one can use local data in this mode.

The main missing functionality of MYOB AR Live compared to traditional desktop MYOB is (a) Live is not multi-currency and (b) it does not have location tracking for stock. AccountRight Live will refuse to convert a desktop MYOB file that has either of these features in use (as of May 2016 this has not been addressed).

If someone wants to use it locally, the system goes into single user mode. Cloud access is now read-only. Apparently, this means that somewhat paradoxically, you need to have internet access to go offline (or how else does the cloud file know a user wants to checkout the file to go offline?). MYOB warns that cloud mode may be slow compared to the "fast" desktop version, and the desktop version is not fast to start with. Note that this also means you need to resume access to the internet to unlock the cloud file so that other people can update MYOB.

The API seems complete; it is a layer on top of the old product (it seems), so I expect it is slow.

Please note that there is some support for integration of cloud apps with AccountRight Live ... but mostly this will only work when you are using the cloud data option (OneSaas, for example, has some integrations with AccountRight Live, but they only work when using cloud data mode). The cloud option is slow. This is because when in local mode, cloud integrations would require you to install some fairly complex software on a server in your network ... and developers are unlikely to do this because it is expensive to support.

From the user's point of view, there is one benefit to compensate for the lack of a true cloud solution:

  • access to data offline (but this locks all cloud users out), which can also be viewed as a very easy way to take your data with your when you end a subscription.

There are lots of disadvantages, though.

For users or small businesses who are looking for a mobile-device approach to business, AccountRightLive requires a Windows laptop, although basic functions are available from an iOS/Android app.

AccountRightLive also has a purely local data share model, which seems very similar to traditional AccountRight. That is, the database is simply a file shared among users, who contend for it (only one user can have it open for writing). Hence the crashing as the file gets larger, which happens despite the attempt to limit data by allowing only three years of information. MYOB says that the local data sharing works for up to five users. This is the same as the practical limit of the old software, which I suppose means all the old problems remain. Performance can be abysmal ... importing a simple product updates CSV into AccountRightLive takes about three seconds per row (not 3 per second). Admittedly this is while others are using the system, but this is extraordinarily slow. AccountRightLive is apparently not a performance solution for problems with traditional MYOB, which is an alarming thing to say.

MYOB's other products

MYOB has a range of other products. For many years, its strategy to upsize businesses was to move them to new products, like MYOB EXO, a traditional ERP. I don't think it works very well, in general, I am not with Exo. MYOB has a new product for larger businesses, MYOB Advanced, which is a cloud ERP bundling the usual suspects (such as a CRM). I know little about it as this stage: It is a localised version of Accumatica, which looks like a very good product in the larger enterprise niche. Localisation was not complete as of mid 2015: last time I checked in, it was still missing bank feeds and Australian payroll. It is a serious, complex and expensive product, for businesses with more complex legal and business control requirements. It is also sold via a fairly traditional 'middle-man' sales channel, with expensive implementation services and expensive recurring charges; as such it weighted to the monolithic model where you buys lots of bundled functionality. 

The contrast with the promise of Open API-based products is stark: with those, you grow by integrating functionality, not by changing platforms. This gives you the chance to choose the best CRM for your industry, for example. It is interesting that few vendors attempt to bundle online stores anymore: the stand-alone products quickly became overwhelmingly superior. This is true of other modules as well, in my opinion.


The elephant in the room, at least in Australia/New Zealand, is Xero. Xero is a genuine disruptor. Xero launched later than Saasu. With a crystal-clear understanding of their market and what a cloud-solution should offer, Xero looks like a winner. Its user growth continues to be extraordinary, and there is a lot of product development. Almost every third party product integrates first with Xero; it is the iOS of the cloud accounting market.

Xero is a good accounting package. Australian localisation is second to none. It has an excellent and well-tested API. It has promoted a good certification program to develop skills among bookkeepers, and there is a lot of community support. Functionality improvements are constant. Our clients are quite simple delighted with Xero, and it's my default recommendation.

In March 2015, Xero addressed one of its biggest problems, by finally adding inventory. But it's a basic stock module. For more sophisticated requirements, Xero defers to other cloud-players, which use Xero's API to integrate easily. This offers some surprisingly powerful cloud ERP/supply chain solutions. There are cloud providers who offer inventory management solutions approaching the capabilities of respectable ERPs with licence fees above $50K. These packages provide multi-site inventory management, purchase orders and sophisticated sales order systems. And of course, integration with online stores like Shopify is supported "out of the box". 

Note that QuickBooks Online also has integration with some advanced supply chain cloud packages, but Xero's integration choice is wider. There are some notes here about integration, but please contact GrowthPath for more information.

Regarding core accounting functionality, Xero has emerged as the best of the packages here. There are still some gaps compared with the old MYOB desktop product, but there are gains as well (Fixed Assets, much better bank feeds, much better payroll, auto-reversing journals, segments).

With Xero, extending capabilities is easier than any of the competition, and the rate of development is the fastest, although that is a subjective comment. No package has a better API, and Xero also has the largest developer mind-share. 

I think most medium-sized businesses will find Xero's payroll, basic reporting and GST functionality fine. Like QuickBooks, AccountRight and Saasu,  Xero requires that you understand bookkeeping. MYOB Essentials reduces functionality and makes interface choices to be more accessible for one-person businesses. For bookkeepers, here's a shout-out to Xero: it supports auto-reversing journals, which is a nice touch, greatly appreciated by people using accruals to get good profit figures per month. MYOB and Saasu don't do this; some versions of QuickBooks do but not the cloud versions. 

Xero offers tracking categories to support segmenting your business. This is a great feature. Tracking categories are what more traditional systems call sub-accounts. It means that you can have up to three dimensions of reporting in the chart of accounts (e.g. a P&L or Balance Sheet by profit centre and cost centre). This becomes very useful when a module such as a supply chain system maps to it. Dear and TradeGecko do this. 

Xero shines as part of a cloud-based workflow. Here it is well ahead of its competition. Export of reports into Google Drive is native, for example. Images and notes can be attached to most records. Saasu is making some recent strides in this direction, and its use of tags is becoming sophisticated.

Xero support if you run into difficulties is unfortunately basic. Xero expects that you get support from your bookkeeper or accountant. The amount of online help is copious, at least. In practice, GrowthPath clients become self-sufficient in Xero very quickly.

Xero's transaction limits: This is a confusing picture, partly because the internet never forgets. Xero has been around for a while, and the business was unwilling to overcommit, leading to the infamous "1000 transactions a month" rule, a statement which is at least five years old. In the meantime, Xero's backend resources have increased enormously. However, the problem we have is that Xero will not commit to anything above this old limit, and there is no good way to size in advance. Transactions are not very well defined: is it a bank statement line, an invoice line, an invoice ....? Xero is vague. A bit like Captain Barbosa, these are now "guidelines" rather than actual rules, and Xero support invites users experiencing problems to get in touch with support. It is clear from forum discussions that performance degrades at some point, and this point is easily reached if Xero is treated as a retail POS, which can generate many customers and many invoices. For medium sized businesses, treat Xero as a back end and take only consolidated figures. In fact, if you use a cloud POS like Kounta, this is what happens in the integration to Xero. If the integration you use doesn't do it, an option may be to consolidate transactions after they arrive in Xero. 

However, consolidation is not a good option for open documents (unpaid invoices), so consolidation is an option for retail, but not for complex wholesalers. 

To try to bring some certainty to this (and comfort for our clients), GrowthPath conducts stress testing. Some of GrowthPath's generic Xero stress test results are published here. In our testing, Xero performs better than you would expect if you were guided by the "1000 transactions" rule. 

Xero is the "gold medallist" cloud accounting app. However, some things can get slow with large transactions, such as detailed GST reporting.



I still come across people who don't know Saasu. Saasu is older than Xero, and it's Australian. So why is it relatively obscure?

For strategic reasons. The founders of Saasu have chosen not to raise millions and burn it on marketing. I'm not sure that was the correct decision, but it's the main reason Xero is more well known. And Xero is still not cashflow positive (as of early 2015).

As a product viewed on its own merits, Saasu is good. Saasu is a bit better value for money than Xero, and it does more in some areas. Because it was designed to explicitly win business from MYOB's desktop software, it offers a perpetual stock module with features which at least equal MYOB AccountRight and in some cases exceed it, a sales order module which includes quotes, and a workable Purchase Order module. 

The stock module has expanded and maintains a clear lead over competitors, particularly in the large plan, which allows "attributes" to be added to stock. You can customise these: they can be used for multi-location, or for variants (size, color etc).

The stock module (standard and large) lets you set reorder points and will generate replenishments orders in a semi-automatic process. Costing is via the average cost method, which is in my opinion the best choice if you are limited to only one method. It has kits ("combo-items"), this includes creating kits which consume the component items.

More about inventory attributes and the Large plan: As of February 2015, this feature is not adding much value. While you can add items to Saasu via a spreadsheet import, attributes are not supported in this mechanism. Instead, you need to make a Purchase Order. Saasu points out that when importing opening stock balances, you have to use a PO anyway, which is fair enough, but the rest of the "Items" features support non-inventory items, such as service items, which don't need an opening balance. As well, if you're entering opening balances under the standard inventory functionality, you can define the items in advance which makes data entry of the opening stock much faster, since you only enter quantities.

Worse, accessing the Attributes definition screen is a separate click to access a pop-up (or modal) window. You can't validate the data entered into attributes: you may wish to ensure that values entered as a Location are from a well-defined list to avoid typos, but you can't. Saasu requires you to enter a quantity on the PO line, which implies that attributes are limited to inventoried items (not virtual or service items), although I suspect you can work around this. After you close the modal window to add another line, you lose any insight into what attributes you chose; it is not displayed anywhere on the PO screen. It's the same on the Sales Order screen. So it's cumbersome to setup, cumbersome to use and the possibility of data entry error is too high. Attributes are supported by the new API, so if you have the skills to use the API you can do a data conversion much more easily, but for the average user this is a disappointing feature. As well, the "transfer" function doesn't work with attributes. If you want to move stock from one type to another at the attribute level, you need to use POs and Sales Orders to buy & sell to a dummy contact. I like Saasu, but this feature is not ready for live use. Many customers who use attributes, like location or size, are probably better off sticking to the standard module and coding the attributes into the item code (e.g. "t-shirt/Yellow/M"). Hopefully, the next release will let the front end catch up with the change Saasu has built into the back-end.  

For a long, long time, Saasu's API was incomplete. After a lot of promises, a modern API now exists, but it is still only partially complete. The old API was good enough for some success with third-party providers. The new API is promised to be on par with Xero, but Saasu is slow at delivering on this promise. Frankly, this is the greatest weakness of Saasu. The product started with a vision to win MYOB customers with a cloud offer, but they didn't really get the importance of APIs (so it seems to me). Personally, as a Saasu user, I am looking forward to API support for bank-reconciliations ... but I'm told this is unlikely to happen. The other gaping gap in the API is access to summary data, such as account balances. This is a priority for Saasu, I'm told. 

By combining both old and new, we can say there is a basic API, and the superior functionality of the core product cf Xero makes Saasu a strong contender. I tend to recommend for smaller businesses more often than Xero, although the larger the business and the more important the API is, the more the scales tip back for Xero. 

Saasu support can be quite good. Email and phone response are usually helpful and fast. 

Saasu transaction limits: Saasu is willing to support high transaction businesses. 

There is one specific situation which gives Saasu a strong advantage: its integration with Neto. Neto is a very good wholesale/retail online store (for single currency businesses). It will use Saasu's inventory and purchasing backend. Neto does not do this with Xero: Neto + Xero also requires an inventory system such as Dear Inventory or Unleashed. As the moment, Neto does not use Xero's stock module and there seem to be no plans to do so any time soon (as of April 2016).  

Apart from being simpler, there are other advantages of the Saasu/Neto integration; in particular, you can use Neto's very good shipment module. As a general purpose package, on balance I would rate Saasu as a contender for bronze or silver. Note that as of June 2016, Saasu has official Zapier support which opens up a lot more non-coded integration with other cloud apps, although an extra cost per month 

Quickbooks Online

The licence model is based on the number of simultaneous users, which is better than its old per-user model but still worse then Xero or Saasu. There are three price plans, often heavily discounted for the first year. Quickbooks is a good-looking package and offers similar functionality to Xero and Saasu (It has a stock module, at least in QuickBooks' top pricing tier). The online version does a good job of importing data from a traditional Quickbooks application. It is fairly fast, but in general it is noticeably slower than Xero. It has a good set of reports. It looks very much like a desktop app ported to the web, but it's a decent browser interface, although at the time of writing in won't run in Chrome on my Mac. I have done some limited stress testing, including loading it with 12K SKUs; data entry hardly slowed down at all (using a good but not great internet connection). 

I tested product support, and it was impressive. Via an offshore call centre, the tech support did a remote screen share into my Mac and helped me diagnose the problem. The problem indicated a lack of maturity in the product; payroll reports can't be run from the general reports section, which is confusing. However, the support was the most effective I have received from any of the cloud products. 

Quickbooks Online does have inventory in the higher plans, but it is minimal (although better than Xero). For example, it doesn't provide any insights into available stock during order entry and does not object to invoices which send stock levels negative. It does have basic location tracking (which goes all the way through the financial accounts so it can be used to generate P&L per location). Transferring stock between locations probably requires manual adjustments. There is no assistance with automatic reordering.

Like Xero, it offers the ability to segment transactions. There are two dimensions, called "classes", and the functionality extends to budgeting. You can also budget per customer. 

I think it is likely that this product will keep some Quickbooks users in the Quickbooks camp and if I were a small business already using QuickBooks, I would look first at QuickBooks online. The importance of cloud ecosystem (i.e. easy expansion via third party products) is the main weakness compared with Xero. Evaluating this means some vision for your company and the role of cloud-based IT.

Quickbooks Online feels less fully featured than Xero on the 'edges'. For example, it has no way to import sales orders from a CSV, requiring use of a third party solution. This is amazingly bad. It does let you import products via CSV, but the process is slow and fragile. Xero is in a completely different league with it comes to import/export, both in capabilities and robustness. At the time of writing, the product simply refuses to work in Chrome on my OS X ... and this has been the case for a few days. That is not a good look.

The traditional version of QuickBooks is well regarded by bookkeepers, who in my experience universally prefer it to MYOB AccountRight. 

I find that Quickbooks Online is a very good product. It is arguably better supported than Xero, at least by the vendor. Substantially offsetting that advantage is that Xero has massively more market share in many places, particularly in Australia, NZ and the UK, so it's easy to find people who know Xero. Quickbooks has some very cheap plans if you trade off functionality. Inventory is a bit better than Xero but not adequate for anything but basic needs. Payroll is not as impressive as Xero. It has no fixed assets module. It doesn't have the ecosystem reach of Xero, but it is in a solid second place. That probably sums it up: a solid second place.


Reckon is an Australian company. For more than 20 years, Reckon had the local licence for Quickbooks. Reckon didn't simply resell Quickbooks; it added all the Australian localisation that gave Quickbooks such a stellar reputation among small business accountants and bookkeepers. However, Intuit, the US owner of Quickbooks, terminated the agreement and Reckon needed to transition to its own products. ReckonOne is that independent product. 

There's an entry level pure cloud package, ReckonOne (with prices starting at $5 a month), and a "hosted" version of a traditional desktop package (which is still very similar to QuickBooks). I haave not paid much attention to ReckonOne. I have not come across a GrowthPath client or potential client using it, and it doesn't appear very often as a product supported in the growing cloud ecosystem. I have no experience with ReckonOne and I haven't made the time to review it, so until I do, I advise you to look elsewhere for information on this product.

In November 2017, the most profitable parts of Reckon were acquired by MYOB (products serving large accounting firms). Reckon announced the proceeds will be used to pay down debt and as a special dividend (so not R&D). The CEO announced that Reckon would focus on micro-business clients (sole-traders). Given this development, GrowthPath feels that Reckon products are not really a very sound approach for larger SMEs to consider.

And don't forget cloud productivity solutions

Such as Google Apps, Office 365, Infusionsoft ...

In their own right, cloud-based accounting systems offer a lot of benefits. You can magnify it by moving to cloud-based collaboration tools.

The main players are Google Apps for Business and Office 365. This is not the place for a comparison, but I prefer Google's solution since it offers a clean break from desktop software, is much easier to manage, works well from Chromebooks (which are a Very Good Thing) and it's cheaper to boot.

Microsoft has a cloud offer as well (Office 365), reluctantly at first but now that it sees the writing on the wall, it's taking it more seriously, although the total offer still appears designed to be anchored to desktop users. 

I have no doubt that Xero, Quickbooks Online and all serious players will support both Google and Microsoft, plus Dropbox, Box and Slack won't be far away.

Xero at this stage is clearly leading when it comes to integrations. It has offered Google Apps integration for perhaps two years at least, and now has some Office 365 support and Box. There is a clear pattern that Xero is always ahead of its competitors when it comes to cloud integration. Generally speaking, the first movers (Xero and Google) have kept their advantage via a fearsome pace of new features. 


When are cloud accounting solutions not right for your business?

I don't pay any heed to objections to cloud technology as such. Yes, cloud packages require you to be online.  That's about as useful as telling someone that a phone requires a mobile network. It's true, but business needs to be online now. I also dismiss data security concerns. There are more risks with a hard drive in your office. 

You lose access to data when you stop paying: this is a more serious concern for small businesses.  I could argue that your $900 phone is useless when you stop paying for network access, but people have expectations of a permanent licence. As I've said elsewhere, a good compromise is to offer read-only access, but this feature is not widespread yet. 

Moving to cloud accounting may not be right for your business. The pros and cons roughly speaking look like this:

  • You will lose core functionality if you come from a mature ERP
  • You will save a lot of money.
  • You will open the door to much better collaboration, remote access, mobile-device use, and workflows which deliver higher levels of productivity
  • You will better integrate peripheral IT systems such as online stores, business analytics (such as the open source Pentaho), CRM and helpdesk software, Google Analytics, marketing automation tools (Infusionsoft, for example) and so on.  
  • New employees get up to speed faster

Only the first point is a step backwards, but it may be significant. To address it, you need to carefully consider the best cloud packages to supplement the functional gaps of your cloud-accounting choice, and see what functional gap remains. The real gap between traditional ERP's and cloud accounting packages is in supply chain management: good movement, warehousing, backorders and returns, etc. There are now at least three good cloud packages which offer a very good set of supply chain functionality. However, the integration is not as "rich" or seamless as it is in monolithic software. For example, to see the details of a customer order taken in Unleashed when using Xero, Xero shows the amount owed but you need to click through to Unleashed in a second browser screen to see products ordered.

Cloud software is a long way ahead of traditional ERP software when it comes to online commerce, CRM and marketing automation. For business analytics, it's a draw. 

Increasingly, the advantages of going to the cloud outweigh the disadvantage. Three years ago, in the first version of this document, I said that medium-sized businesses probably faced one more one five-year cycle on a traditional ERP. Half way through that period, I am confident that cloud solutions are starting to appeal to businesses looking to exit the traditional approach. 

Xero, Saasu, Quickbooks Online and MYOB Essentials, in more depth...


In the past, I went into a deep discussion of the functional differences between the packages.

This is a now a bit beyond the point, since integration is more important than core functionality. Businesses should consider their accounting package as part of their "software stack". 

Xero is the purest player and with the additional of inventory, it is now a very well balanced offer, easy to recommend for many businesses. It offers the best API, the best interface and the best third-party developer support. It has the worst support, though.

Saasu and Quickbooks Online have good and perhaps better "out of the box functionality" although I now doubt that this can outweigh Xero's advantages.

MYOB Essentials is basic with seemingly no ambition to be anything more. 

Integrations and market share

At this stage (March 2015), Xero is the system everyone supports first with out of the box integration. For example, three leading cloud-based supply chain packages are Unleashed, TradeGecko and Stitch. They all support Xero. Only Stitch supports QuickBooks Online, and both Unleashed and TradeGecko are in the final stages of beta-testing their integration; both should be ready by June 2015 (they both make it available already to interested evaluators). 

Vendors have voted with their feet: the other accounting packages are down the pecking order when it comes to prioritisation of "click-and-go" integration functionality.

Xero is innovative, has a mature API and great mind-share as a disruptor spending heavily on marketing, and QuickBooks Online is backed by a large business which is visibly moving its legacy customers to a cloud-solution. I believe that Saasu is unlikely to achieve critical marketshare, plus it makes life difficult for third party developers by not have a complete API, and MYOB has a confused approach which is not effectively moving its customer base to the cloud (from what I see), and forces third party vendors to consider that clients of AccountRight Live may be running locally, disabling web-based APIs.

Note that as long as a package supports REST-based APIs, custom integration can be built quite easily. I have built custom interfaces for a few apps in a day or two. Out-of-the-box integration is not superior to this approach, since it uses exactly the same techniques, but it's cheaper. 

As mentioned above in the section on Saasu, the strong integration between Saasu and Neto is an interesting exception to the general rule that Xero wins at integration choices.

Apart from "out of the box" integrations, there are two other ways of integrating cloud apps. The first is to write integration code using using APIs; this is obviously a technical task, but not very complex. Having done integrations for many years, cloud API integration is probably 10 to 100 times easier than traditional approaches.

The second approach is to use a commercial intermediary, such as OneSaas or Zapier. These services charge, usually around $50 a month, and let you 'build' integrations by going through a web-based process of several steps. You choose the two apps you want to integrate, and you get various ways to connect them. This only works if the apps you want to use are supported. Xero and QuickBooks have very good support, and Saasu does now as well. This is a mildly technical task. 

What you get before you look at integrating with third party packages

If you want to focus on out-of-the-box functionality, you need to answer these questions first:

Do you need inventory management? If yes, you have to consider if the the minimal functionality of the Saasu, Xero or QuickBooks Online with suffice. 

Do you need foreign currency? If Yes, MYOB Essentials is eliminated.

But if you need online sales, good inventory management (backorders, variants etc) then consider Unleashed, TradeGecko or Stitch ... this handicaps Saasu, and gives a lead to Xero. At this point, they support Xero better than QuickBooks Online. GrowthPath has assisted several clients choose and implement these integrated cloud solutions.

There are products which provide integrations where none are officially supported. A simple example is Zapier, a more complex approach is OneSaas.



I will now summarise in a simple table. To represent the traditional world of mid-tier ERPs, I choose Sage ERP (accpac), a very traditional system (which I quite like). 

Module  MYOB Essentials (was LiveAccounts)  Xero Saasu  QuickBooks Online Sage ERP (Accpac)
 Sales  Very minimal.

 Minimal, but improving. Quotes are now possible. Pricing and credit terms are very minimal.

Third party options are very strong.

OK. Third party options are strong. Support quotes, sales orders and invoices. Doesn't do backorders but demand on sales orders is reflected on inventory reports. Pricing and credit terms are very minimal.  OK, similar to Xero & Saasu.  Very sophisticated. Backorders, partial payments, complex payment terms. Returns, under payments and over payments are well handled. The interface is dated and the system is batch based, meaning careful attention to routine processing is required. 
 Purchasing  No Basic. Receipt & invoicing is the same step.  Basic to good. Can make back-to-back orders, and will generate replenishment POs when stock reaches certain points. Receipt and invoices is the same step.   Basic.  Strong but bureaucratic
 GST  Excellent  Excellent  Excellent Excellent  Poorly localised. 
Payroll  OK for small payrolls  Very good. Xero's subscription includes web-based employee self-help and apps for easy phone-based expense claim submissions (snap a receipt). Xero is pushing ahead in this area, and has increasingly strong differentiation (plus good third party modules for more complex situations). Xero is confident to offer solutions of 100 staff, plans go beyond that.    OK (plus good third party modules for more complex situations) OK  No Australian localisation. Requires third party modules.
Perpetual Inventory (i.e. "real" inventory)  No  Yes, as of March 2015 . As of October 2015, the API fully supports 'tracked inventory', as Xero calls it. Single location. No batch or serial.

Yes in all plans. Including kits, reordering and non-inventory items.

More inventory features in the Large plan, which cover multi-locations and variants (size/color etc).

Some third party choices offer excellent functionality. 

In the top-tier, there is  basic Perpetual Inventory. Saasu's is better.  Outstanding. Multiple sites, multiple stock-take procedures, multiple valuation methods. 
Job costing basic. Accountants are supported by MYOB's practice management software 3rd party solutions, including Workflow Max, bought by Xero. Accountants are supported by Xero's practice management version. Using tracking categories to do this is unsatisfactory; there is not really native support for job costing. However, there is support for tracking expenses to be recovered from clients.

limited; tagging.

limited. Like Xero, you can track expenses to be billed to clients as recovery (you can assign a default mark-up too) optional modules.
Intercompany (auto-balancing entries)  No  No  No No  3rd party solutions are very good.
Segmenting the business No Yes (tracking categories, two dimensions, like having acct + two segments). 'New' reporting module allows consolidation of a subset of tracking categories.  via tags (informal but flexible, but not as good as Xero) Yes (classes). Similar to Xero. Yes, via account structure. Very good.
Budgeting    Budgets per account. Can upload from spreadsheet, but no breakdown features. Multiple bugdets. Budgets by tracking category.  Account level budgets, but not by tag. However, you can make a dedicated budget for a tag, and select that budget that in reporting  Can budget by 'class' (segment) and/or by customer.   
Securing Access to functions, period locking OK   Good: 'advisor' user can continue entry in a date period locked to ordinary users (e.g. for month end processing)  OK To be assessed  Very strong controls over functionality. Locking is sophisticated: submodules like AR can be locked while still allowing GL postings. 
Cashflow management OK OK Includes an interactive drag and drop cashflow forecaster which is actually useful. To be assessed OK. Lots of potential insight, but hard to use.
Analytics and Dashboard Not really Not really. But it has the best report writing tool, even though that just lets you customise traditional accounting reports. Integration with 3rd party.

Not really.

Integration with 3rd party.

To be assessed No (comes with a one-user Excel tool)
Audit trail Not enterprise class.   Not enterprise class, but deleted transactions are mostly viewable. The audit trail features have been improving, and they are now become good to very good.  Not enterprise class but deleted transactions are mostly viewable To be assessed  Very good.
Multi-currency  No  Optional. Basic.  Optional. Basic. To be assessed  Very strong, world-class. 
Third-party integration


Kounta POS: Yes (Native). 

Unleashed sales and inventory: No

DIY: Easy.



Kounta POS: Yes (Native). 

Unleashed sales and inventory: Yes (Native)

 DIY: Easy

Shopify: yes
Best in class Zapier and OneSaas support

Example: Kounta POS: Yes (Native)

Unleashed sales and inventory: Yes (third party)

 DIY: Easy. Shopify: via third party.

Very good integration with Neto; possibly avoiding the need for an inventory system.

To be assessed. No CSV import of sales.

Effectively none.

DIY: Possible. Talent is rare (although GrowthPath has expertise). Requires use of old technologies, and limited to Windows.

online payment integration To be assessed Yes Yes To be assessed No. Needs custom coding.
API & integration

API is satisfactory, after years of no API. Not much out-of-the box support, but possibly growing.

 Outstanding, best in class and with momentum. Every cloud package offered to the Australian market will offer Xero integration, and the API makes it cheap to build your own integration.  API has only recently become  satisfactory, and Saasu is paying the penalty for taking so long. 
Very good Zapier support. Limited out of the box API support, although many core extension directions are covered (e.g. online commerce, CRM).

Very good API. 'Out of the box' integrations are very good, close to Xero.
Zapier and OneSaas support is almost as good as Xero.

Possible via use of Win32 COM (GrowthPath is experienced in using Python to drive Accpac ERP and we have interfaced Accpac to Shopify, Infusionsoft and Pracsoft). But it is much more cumbersome than Web APIs. Third party integration is poor. The vendor has online , CRM and business analytics packages which are classic examples of the "jack of all trades" problem: they are ok.

Raw data is stored in SQL, which is easy to access and for reporting, an alternative to using an API.

Costs Somewhere between 10 and 100 times cheaper than a traditional solution  Somewhere between 10 and 100 times cheaper than a traditional solution   Somewhere between 10 and 100 times cheaper than a traditional solution  Somewhere between 10 and 100 times cheaper than a traditional solution  Expensive to buy. Expensive to implement. Expensive to keep. Productivity payoffs in high-volume manual data entry.
High volume manual data entry Not really expected Some optimisation has been made, but browsers are not ideal for this. High volume data entry should be done via the API. The API is mature. Some optimisation has been made, but browsers are not ideal for this. High volume data entry should be done via the API. The Saasu API is not yet fully mature.  Same as Xero/Saasu. Outstanding. This software comes from the era of manual data processing.
User training requirements (e.g. new staff) (assuming the user has basics GST and double-entry bookkeeping) Very minimal Very minimal, although non-standard events like customer overpayments are not obvious. There are plenty of YouTube videos and help documents. There are many certified book-keepers Very minimal, although non-standard events like customer overpayments are not obvious. There are plenty of YouTube videos and help documents. Saasu provides telephone help. Same as Xero/Saasu.  You need formal training because the software is complicated and mistakes are hard to correct.
Transaction limits (sales) [these are rough estimates, not official vendor numbers, and this is an uncertain science] Unknown 2000 to 4000 invoice lines a month (probably). 5000 customers max. Consolidation via the API may be a fall-back. Stress testing indicates that it performs well above claimed limits.  See here for test results High limits, probably 10x Xero, possibly more.  Similar to Xero Very high (50 x Xero to ballpark it)
User support Good online chat support I used to rate Xero as having the worst support. However, things have changed for the better. Firstly, there is now live chat. Secondly, the community documentation is the best by far. Thirdly, the "Xero University" training portal is outstanding. And finally, Xero has the most users and it's easier to find bookkeepers who know how to use it. So I give Xero a pass on support now.  Quite easy to get authoritative help on the phone. The support winner: fast access to a helpdesk supported by screen sharing which is extremely effective. Contact reseller at $1000 per day.
Recruitment for specific package skills Rare reasonably easy rare possible possible but not common


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