Cash or Accrual Accounting for Management Reporting?

In Australia, you have a choice to remain on a cash basis for lodging your BAS while your Turnover remains under the $2M threshold. The advantages of this are if you have outstanding debtors you do not have to pay GST on those sales until the cash is actually received. The problem is that cash reports are meaningless if you are trying to monitor the performance of your company. If you incurred wages to provide a service in period 1 then you want the revenue to appear in that period, not in the period the money was actually received. This is called the Matching Principal in Accounting. Luckily, bookkeeping software such as Xero, MYOB and Quickbooks allow you to remain on Cash for your BAS reporting while running Accrual based reporting for your Management Reports.

Hybrid Basis

The Hybrid basis of Management Reporting allows you to capture all of your costs and revenue in the same period to get a true measure of how you are performing each month. You just need to be sure that all of your Suppliers Invoices and Sales Invoices are entered in the month that the transaction took place and be sure to run all of your Management Reports on an Accrual basis while leaving our GST Reports on a Cash basis.

3rd Party Add-ons

In specialist industries such as Legal, Property or Healthcare, there are many 3rd Party Add-ons integrate with your Accounting Software to provide you with Industry Specific requirements that your standard Software can’t provide. While most of these applications claim to have a “seamless Integration” with your bookkeeping software, you will find that the integration is actually driven by exporting General Journals. The problem with this is that many of these products are unable to differentiate between Cash or Accrual on a General Journal which makes it very difficult to produce both Cash and Accrual Reports on a Hybrid basis.

Our Reader Score
[Total: 2 Average: 3]

Bookkeeping on the Cloud – MYOB AccountRight Live, QuickBooks Hosted, Xero and Saasu Comparison

After a couple of years delay, myob are nearly ready to go live with their full cloud product. MYOB have taken a different cloud strategy to it’s competitors which you need to comprehend when comparing the different cloud options. Each product has it’s strengths and weaknesses in which I’ve summarised below.

Quickbooks Hosted, Xero and Saasu are a fully cloud based product. This means that your data file is stored securely and fully encrypted on the cloud and you can only work on the file while you have the internet connected. MYOB AccountRight Live enables you to have the data file sored both online and locally at the same time. If the internet goes down or if you want to work on the file on a plane for example, you just work on the local file and the cloud version will be updated when you next go online. Here’s the basic monthly fees including GST and major product differences for each of the cloud based bookkeeping software :

Bookkeeping SoftwareMYOB Account Right LiveQuickBooks HostedXEROSAASU
 Simultaneous Users51UnlimitedUnlimited
Basic Monthly Package (No Payroll)$23$25.83$29$20
Medium Monthly Package$59.50$36.25$49$35
Premium Monthly Package$59.50$36.25 $64$60
 Feature Differentials:
 Purchase Orders YYNY
 Detailed Job Costing YYYN
 Detailed Budgeting YYNY
 Time Billing YYNN
 Inventory YYNY
 Offline-Online Synchronisation YNNN
 Pay Suppliers and Payroll directly from software YNNN

As you can see features offered by each product vary across the range. If your main criteria is ease of use and functionality then Xero may have the edge- it just lacks the power and scope for growth of some of the other providers. A major point of difference that is unique to MYOB AccountRight Live is the ability to pay third parties such as suppliers and staff directly from the software. This allows your bookkeeper to setup all of your payments without the need to be given access to your online banking. You just need to login and complete a simple one-step authorisation process to approve the payments. Of course price is just one factor to consider when deciding which bookkeeping software to go with. Each has it’s own functionality and user interface which you can sample by signing up to a free trial or just give us a call to discuss.

Our Reader Score
[Total: 2 Average: 3]

MYOB Add-on – Money Manager

MYOB and Quickbooks now dominate the SME market for bookkeeping and accounting software in Australia. As a result there is a whole industry of add-on products that enhance the reporting capabilities and functionality of the software.

One of the products that we utilise for many of our clients is Money Manager.

If you use jobs within MYOB to report on the profitability of different profit centres within MYOB, you will find that there are some limitations with setting budgets for these different profit centres. Money Manager overcomes these limitations and allows you to set detailed budgets for all of your profit centres and then consolidate them to form the company budget. It gives you many more options when viewing reports for actuals v budgeted figures.

Money Manager also provides a fantastic cashflow forecasting tool. It integrates with your MYOB data file to combine your actual YTD result with your latest forecast in Money Manager to produce cashflow forecasts years in advance. Not only is this a great management tool but banks love it if you need to apply for finance.

Our Reader Score
[Total: 0 Average: 0]

Quickbooks v MYOB

We are commonly asked which version of bookkeeping software is superior when considering MYOB versus Quickbooks. One of the first things I say when asked this question is not to change from one product to the other just because they have been told the other is better. They are both fantastic products and in the hands of an experienced bookkeeper, they both provide comparable levels of financial analysis and functionality.

One of the questions I always ask when interviewing potential bookkeepers is “Which software do you prefer?” I usually find that they either love or hate one system or the other. Further inquiry often reveals there bias is based on which system they have had more experience with. Similarly if you ask a Windows user to rate an Apple Mac, they will be unable to fairly judge the other system as they have not reached a level of application to allow them to get the most out of the alternative system.

We are Professional Partners with both MYOB and Quickbooks so we try to remain unbiased when comparing the 2 products, however they both have their advantages and disadvantages and we have summarized some of these below:

  • Operating System – MYOB offers a product that works on the Apple Mac platform. Quickbooks only has Windows based products in Australia.
  • Credit Cards – Quickbooks has a separately identifiable menu option for entering and reconciling credit cards. MYOB requires you to use the banking menu and manually change the bank account to the credit card account.
  • General Journals – The general journal menu option in Quickbooks lies strangely in the Banking menu. It also lacks the ability for you to enter GST inclusive amounts which can be problematic if you need to use a journal for something like entering an expense claim form.
  • Inventory – MYOB Enterprise offers the ability to have multiple locations for inventory. Quickbooks is unable to handle multiple location.
  • Credit Notes- When receiving a credit note from a supplier, Quickbooks has a specific menu option for entering credit notes. In MYOB you are required to enter a negative invoice.
  • Multiple Company Files– Quickbooks only allows you to have one company file open at a time. MYOB allows multiple company fiiles to be open which is handy when you are working with a group or companies with intercompany transactions.
  • Multiple Windows Open– MYOB only allows you to have a maximum of 9 windows open within one company file, wheras Quickbooks allows unlimited windows open within one file.
  • Year End Procedures– The year end rollover in MYOB is cumbersome and potentially catastrophic for an inexperienced bookkeeper. Quickbooks does not require a “hard close” of the payroll and financial year, making it much easier to manage the year end processes.

As you can see, there are advantages and disadvantages with both systems. There are also many add-on products that can extend the capability of both products which are worth considering if you think you have reached the limit of capability of MYOB or Quickbooks.

Our Reader Score
[Total: 15 Average: 2.8]