Review Criteria
The Big Issues when Choosing an Alternative to MYOB
Here we have the results of Our Review of Alternatives to MYOB (pdf, 3MB).
We have considered how each program performs against a number of features that we consider as important.
A discussion of each of these features follows. The letters relate to left hand column of the review spreadsheets.
A) Amendability
B) Year End Rollback
C) Interchange between Mac and PC
D) MultiUser
E) Tax Compliance
F) Payroll
G) How the Software is Paid for
H) Drill Down
I) Ledger Based Bookkeeping
J) Networkable
K) Hosted version
L) Import/Export
M) Multi-currency
N) Work from a template
O) Links to other software
P) Moving datafile
Q) Datafile usable offsite
R) Helpdesk
S) Partner Scheme
T) Advantages
U) Disadvantages
A) Amendability
The most important feature of MYOB is that transactions you enter can be changed. If you are moving from MYOB our strongest advice is to pick software that is as amendable as MYOB.
Why is this important? Simple Accounting considers that the most important use of the system is not the accountant, but it is the bookkeeper. The amendability of transactions allows the bookkeeper to make errors. Bookkeepers are free to try their best and not worry whether the transactions they enter are perfect. They can make them more accurate later on. Amendable transactions means a bookkeeper who is experienced and productive.
We even insist on the transactions being amendable after ‘posting’. This is because it empowers the bookkeeper. They can approach job in stages. For instance, they can first concentrate on getting banking transactions in and get the bank reconciliation correct. This allows simple sales accounts to be prepared and debts chased. Secondly the transactions needs to be checked that they have roughly the correct VAT coding. This will allow a VAT Return to be compiled on time. Thirdly, the bookkeeper can ensure that the nominal accounts are accurately accrued. This allows management accounts to be run.
Amendability is important for tax returns to be prepared using the correct assumptions. Being able to make amendments allows you to amend journals, and change timings. You can make a different assumptions and see what the effect might be. We can also make large retrospective amends for VAT on expenses that you may not have claimed at the time.
In MYOB nearly everything is amendable. On exception is a deposit on a crystallised sales order. On other transactions it is restricted to deletion and re-entry (eg payroll payments). There tends to be a good reason why deletion is imposed on these transactions. However the vast bulk of other transactions are directly amendable including those that have been reconciled at the bank.
Providing this level of amendability is an anathema to most software writers. For example, only modest amendability is allowed in the latest version of Mamut’s PC products.
Accountants that advise on software parameters are more concerned about fraud detection and individual accountability than ease of use. They also believe that any amendments for different tax assumptions should be made in their software, not yours.
We are more concerned that the bookkeeper is empowered and we get accurate and consistent justifications of tax declarations. Therefore this proactive will not work with clients whose software prevents amendments to their transactions. Sorry, but the way we work precludes it.
B) Year End RollBack
The year end is often done in more than one stage. The bookkeeper will prepare the books, there will be an initial exploration of the figures by the accountant. There will be amendments made by the bookkeeper. There will then be a year end visit by the accountant to finalise the figures. The figures will then be taken away and used to calculate things like corporation tax, various year end provisions and depreciation. Finally the year figures will be matched to the final accounts.
In a conventional accounting system at any one of these stages a user may inadvertently close the year end. However if the figures in the year end are then locked by the year end process, it will not be possible to get the final figures to agree to the books. This in turn means the comparatives will be misstated in the accounting books for the following year.
The answer is simple. You need to be able to reopen the previous year, make adjustments and close this year again. MYOB is one of the very few systems that allow this. It allows the bookkeeper to remain in control of her own figures. It also allows the work over many years to be restored to calculate VAT misdeclarations or corrections of past profits for business tax records. This is only possible if the transactions are amendable, including in closed VAT quarters.
C) Interchange between Mac and PC
It has been tremendously useful that MYOB works on both Mac and PC. It allows the advantages of both operating systems when they are required. For example multiple accesses to the same datafile and easy short cut keys are an advantage on the PC. General stability is usually better on the Macs.
Ideally you should get a replacement for MYOB which continues to allow this flexibility. We should be able to use the datafile on either platform without the use of an emulator.
It is tough to retain this feature within old MYOB licensed software or the new Mamut AE upgrades. Only those MYOB products before version 13 will retain this feature, so here is a concrete reason to move to a different program. Note that we have found those software that will work on a Mac, and those that will work on a PC. There are some products that work on both. There are very few products (E.g. Express Accounts) where a file created on a Mac will work on a PC and vice versa.
D) Multi User
It may be important for several users to be able to use software at the same time. This is particularly important for larger small businesses, who need Customer Relationship Management and stock control functions while other people are doing the bookkeeping at different times.
The multi user versions of MYOB versions 17/18 for the Mac had very poor performance. Unfortunately existing multi user accounting systems are only effective on PC networks.
E) Tax Compliance
Online filing for the HMRC and Companies House will become compulsory for many more companies for more taxes, in the near future. The cost of non-compliance is increasing – fines are being routinely imposed for late returns. So it may be important that the system you choose can do much of the work of online filing for you. VAT online filing is going to be particularly important, especially if you are on quarterly rather than annual VAT accounting.
Some software has carefully worked year-end processes. This includes 13 periods (e.g. MYOB) or Accountant versions (e.g. Quickbooks). Other systems provide calculations of tax liability (e.g. FreeAgent Central) or a draft final accounts ready for submission to the Companies House.
F) Payroll
Most Simple Accounting clients do not need to be worried if there is no payroll function. Many larger small business clients outsource their payroll. This part of accounts software can be very complicated. It has to deal with legal aspects such as Statutory Sick Pay and Statutory Maternity Pay and tax rates which change twice a year. It is often more cost effective to pay external accountants to handle this relatively minor problem.
G) How the software is paid for
Open Source
One option is open source software. This is software which is provided free. All the money is focussed on improvements, tailoring and upgrades. Unfortunately we haven’t been able to find an obvious solution. We need to see sufficient investment of time and energy by software houses serious enough to invest in overcoming the technical challenges necessary.
Proprietary software
I believe accounting software is different than other software. It is vital it works properly. Therefore it is important that a business which could lose income and reputation if their software is poor quality. Professional Indemnity Insurance is not a sufficient guarantee. Even the risk that a company could lose its reputation is insufficient.
I think many small businesses would still like to have their key software run from their own machines. Software that is locally hosted is more flexible, it can be tailored and used uniquely in line with a customer’s key business processes. It can be configured with data fields for specific parts of a transaction unique to that client.
Licence Only
Proprietary software is usually owned by licence, like a Microsoft © Excel licence. There is a one off fee. The software is yours to use indefinately. With proprietary software there is a possibility that clients will sue a company for poor quality software. If clients are successful then the software manufacturer will be as well. This is our favoured model of ownership.
Software plus service – licence plus rental
Mamut software is usually sold subject to a compulsory rental. Mamut has committed to a ‘Five-year reconfirmation agreement’ on its new Mac AccountEdge products. Mamut products are generally subject to upgrade fees and a compulsory service agreement.
Some MYOB clients have objected to Mamut’s offering because they didn’t trust an alternative where they were being asked to pay again for things the client has already bought. Mamut’s offering to PC users represents increased cost for those clients that do not need ongoing support. Simple Accounting could not currently recommend Mamut’s PC offering. Although there will be significant extra costs involved I think MYOB clients should not reject software as a service or rental models out of hand.
Software as a Service: Rental
One option is paying for accountancy software on a rental basis rather than buying the software outright. The advantage of this model is that the manufacturer is encouraged to invest money in technical support and innovation to keep its clients happy. Where software is bought outright, money will be used for promotion and marketing to get new sales. The huge disadvantage for the client is one of cost. The basic software tends to be more expensive this way. There are a growing number of bookkeeping solutions written specifically for the web. Their functionality is becoming a serious rival to many of the lower grade functions of MYOB and similar packages.
Simultaneously at the top end, processes such as sales order processing, stock control, and project control systems and certain specialised trades are now dominated by web-based applications. There is a dearth of midrange packages for the web. These systems have the huge advantage of being instantly upgraded to the latest version: there is relatively little problem about version tracking. With multi access versions, access is available from anywhere including small remote laptops and hand held devices. Salesmen on the road can log in and receive and post information. Online systems allow remote access by an external accountant or a staff member working from home.
The differences between web-based and locally held software will start to become more marginal as some businesses move to enterprise solutions on a wide area network.
A Robust Company
In business it is vital that you look after your suppliers. Your success feeds your customers’ success. Similarly your success depends on the quality and workmanship of their supplies to your own business.
We saw this with MYOB. The software in the UK was not allowed to grow alongside its competitors. The marketing failed as the economy faltered. With no new customers there were only small profits; the money for improvements therefore dried up. However the customers that have suffered have been the existing MYOB users.
MYOB clients have not been able to support their supplier. MYOB in the UK was never very profitable. This was partly because MYOB (UK) made some poor decisions. SAL considered that MYOB made poor decisions on marketing, staffing and strategic acquisitions. MYOB was unable to sell significant numbers of new licences to businesses in a market dominated by the advertising of Quickbooks and the connections of Sage. Because of its technological edge, MYOB users ended up getting a very powerful product for a very reasonable price.
I would advise MYOB clients to pick software from a robust company, which is not only selling new licences, but also has enduring revenues from existing clients.
H) Drill Down
Many accounts systems have the feature of Drill down, but not generally as fully exploited as in the MYOB system. By hitting the little white arrows anywhere in MYOB you will to get the source transaction. From inquiry screens or high level screen reports you can get to the source transactions, screen by screen very intuitively.
This is very helpful for auditing. You also see the transaction in the same way irrespective of the enquiry screen that you used to find it. It is helpful to the user to see the transaction in a familiar way each time.
I) Ledger Based Bookkeeping
Ledger Based Bookkeeping
J) Networkable
This feature very much relates to part D) Multi User. Many of our clients often require multiple users to access the same datafile and work on creating invoices or entering purchases simultaneously.
K) Hosted version
This is an optional feature which we think is great to have for clients who are looking to overcome the mac and windows interchangeability problem. Allowing the software to be hosted on a server allows access to the core functions of the accounting software without compromising overall performance and features.
L) Import/Export
Having the ability to import and export data between different accounting systems is great for those who are on the verge of moving to an alternative piece of software. It means that valuable data from your previous system is preserved and can be accessed via your new system, or via a usable format such as Excel.
M) Multi-currency
With a growing number of international transactions being performed by firms this feature is a must have in order to create regional specific sales e.g. creating invoices denominated in a foreign currency. This can also then allow the firm to better realise the costs attached to foreign transactions and plan cashflows.
N) Work from a template
The ability to use a template system within the accounts package means there is less work attached for new startups who can use a predefined and configurable nominal accounts list to get started.
O) Links to other software
Being able to use your accounts data with other packages and software such as Excel and CRM software reduces duplication of tasks and means your able to create meaningful reports and analysis in a number of different software packages.
P) Moving datafile
Often we as accountants require access to your accounts datafile. Being able to transfer the file (over an online storage site) with ease means this can be carried out by any member of staff without having to create a manual backup to a CD or having to move entire software folders which maybe stored in a number of different folders.
Q) Datafile usable offsite
Using your datafile away from the main office file means your accountants can carryout necessary amends without disrupting your working day, or without coming onsite.
R) Helpdesk
An important part of the software offering is the ability to access help from the software provider when things aren’t going to plan or the datafile experiences glitches. Ideally we look for both email and telephone support, but depending on the location of the software provider this can often mean certain contact methods may not be available.
S) Partner Scheme
A strong partner scheme ensures that the software is well supported. Active supporters such as SAL can therefore provide bespoke training and assistance to wide range of businesses.
T) Advantages
A quick list of the main advantages of going for a particular software.
U) Disadvantages
A quick list of the main disadvantages and deficiencies we’ve found while undertaking the review.