Cloud-Based Accounting for Australian SMBs: Making the Right Choice
If your Australian business is still running desktop accounting software—or worse, managing finances with spreadsheets—you’re likely spending more time on bookkeeping than necessary and missing out on real-time financial visibility that could improve your decision-making.
Cloud-based accounting has become the standard for Australian SMBs, and for good reason. Automatic bank feeds, real-time collaboration with your accountant, mobile access, and seamless integration with other business tools make cloud accounting vastly more efficient than traditional alternatives.
But choosing between the major platforms isn’t straightforward. Xero, MYOB, and QuickBooks Online all serve the Australian market, each with different strengths. This guide helps you make an informed choice based on your specific business needs.
Why Cloud Accounting Makes Sense
Before comparing platforms, let’s establish why cloud accounting is the right direction:
Real-Time Bank Feeds
Cloud accounting platforms connect directly to your Australian bank accounts, automatically importing transactions. What used to require manual data entry or desktop bank feed downloads now happens automatically, usually within 24 hours.
For a busy business owner, this means reconciliation becomes a quick daily task rather than an end-of-month marathon.
Anywhere Access
Access your books from your office, home, or a client site. Your accountant can access the same data without you sending files back and forth. During tax time or BAS preparation, this collaboration is invaluable.
Automatic Updates
Software updates happen automatically in the cloud. When tax rates change, when new features launch, when the ATO changes reporting requirements—your software updates without you doing anything. No more annual upgrade purchases or installation hassles.
Integration Ecosystem
Cloud accounting platforms integrate with hundreds of other business tools: point-of-sale systems, e-commerce platforms, inventory management, job costing, time tracking, and more. This creates a connected business system rather than isolated data silos.
Automatic Backups
Your data is automatically backed up and protected. No more worrying about backing up your accounting file or losing data if your computer fails.
The Major Players in Australia
Three platforms dominate the Australian cloud accounting market:
Xero
New Zealand-founded Xero has become the leading cloud accounting platform in Australia, with over 2 million subscribers locally. Known for its clean interface and strong ecosystem.
MYOB
Australia’s traditional accounting software leader has transitioned to cloud with MYOB Essentials and MYOB Business. Strong brand recognition and deep Australian tax compliance features.
QuickBooks Online
Intuit’s QuickBooks Online entered Australia several years ago and has been gaining market share, particularly with businesses that have US connections or experience with QuickBooks from other countries.
Detailed Platform Comparison
Xero
Pricing (as of May 2021):
- Starter: $27/month (limited invoices and bills)
- Standard: $52/month (unlimited invoices and bills)
- Premium: $70/month (adds multi-currency and projects)
Strengths:
User Interface: Xero’s interface is widely considered the cleanest and most intuitive. If you’re not an accountant, Xero feels most approachable.
Ecosystem: Xero has the largest third-party app marketplace with over 800 integrations. Whatever business tool you use, there’s likely a Xero integration.
Accountant Network: Most Australian accountants support Xero, and many prefer it. Finding a Xero-savvy accountant is easy.
Bank Feeds: Reliable direct bank feeds with most major Australian banks, with good categorisation suggestions.
Mobile Apps: Well-designed iOS and Android apps for invoicing, expense capture, and basic bookkeeping on the go.
Considerations:
Cost: Xero isn’t the cheapest option, especially if you need Premium features.
Inventory: Basic inventory tracking is included, but businesses with complex inventory needs may need add-ons.
Payroll: Australian payroll is available as an add-on at additional cost.
Best For: Service businesses, professional services, small retail, businesses wanting the broadest integration options.
MYOB
Pricing (as of May 2021):
- MYOB Essentials: From $25/month
- MYOB Business: From $60/month (includes payroll and inventory)
Strengths:
Australian Tax Compliance: MYOB has the deepest history with Australian tax requirements. If you have complex tax situations, MYOB handles them well.
Payroll: MYOB’s payroll is comprehensive and included in MYOB Business plans. For businesses with employees, this can represent better value than Xero plus payroll add-ons.
Inventory: Stronger inventory management than base Xero, making it suitable for product-based businesses.
AccountRight Upgrade Path: Businesses with complex requirements can upgrade to MYOB AccountRight for advanced features while maintaining the same ecosystem.
Local Support: Australian-based support with good understanding of local business requirements.
Considerations:
Interface: MYOB’s interface has improved but isn’t as polished as Xero’s.
Integrations: The app ecosystem is smaller than Xero’s, though major integrations exist.
Learning Curve: If you’re coming from desktop MYOB, the cloud versions work somewhat differently.
Best For: Businesses with employees, product-based businesses, those with complex Australian tax requirements, MYOB desktop users migrating to cloud.
QuickBooks Online
Pricing (as of May 2021):
- Simple Start: $15/month (basic features, 1 user)
- Essentials: $28/month (adds bills and more users)
- Plus: $42/month (adds inventory and projects)
Strengths:
Pricing: QuickBooks Online is generally the most affordable option, especially at entry level.
Global Consistency: If you have operations in multiple countries or staff familiar with QuickBooks from overseas, the consistent experience helps.
Reports: Strong reporting capabilities, especially for businesses wanting detailed financial analysis.
Regular Updates: Intuit invests heavily in QuickBooks development; new features arrive frequently.
Considerations:
Australian Market Share: Lower market share in Australia means fewer accountants are QuickBooks experts.
Bank Feeds: Bank feed coverage has improved but occasionally lags behind Xero with newer Australian banks.
Integrations: Growing ecosystem but smaller than Xero’s in the Australian market.
Payroll: Available as add-on but not as mature as MYOB’s payroll.
Best For: Budget-conscious businesses, companies with international operations, businesses prioritising cost over ecosystem.
Choosing the Right Platform
Your choice should depend on several factors:
Business Type
Service Businesses (consultants, trades, professionals): Xero’s simplicity and strong ecosystem make it the default choice. QuickBooks Online is a good budget alternative.
Retail/Product Businesses: MYOB’s inventory capabilities or Xero Premium with inventory add-ons. Consider your point-of-sale system’s integrations.
Businesses with Employees: MYOB Business includes payroll; with Xero, payroll adds cost. Factor this into your comparison.
Construction/Job Costing: Xero Projects or MYOB Business with job tracking. Specialised add-ons available for both.
Your Accountant
Talk to your accountant or bookkeeper before choosing. If they specialise in one platform, using it will streamline your collaboration. Most accountants support multiple platforms, but they’ll have preferences.
Integration Requirements
What other tools does your business use?
- E-commerce (Shopify, WooCommerce): Check integration quality with each platform
- Point-of-sale: Verify your POS integrates with your preferred accounting platform
- CRM: Check if integration exists or if manual export/import is required
- Industry-specific software: Some vertical software only integrates with certain accounting platforms
Budget
For a small business with straightforward needs:
- QuickBooks Simple Start: $15/month
- MYOB Essentials: ~$25/month
- Xero Starter: $27/month
The differences seem minor monthly but add up annually. However, don’t choose purely on price—the right platform saves time that’s worth more than the price difference.
Migration Considerations
Moving to cloud accounting requires planning:
Data Migration
All platforms offer migration tools and support:
- Historical data can typically be imported
- Opening balances are set at migration date
- Transaction history may have limited import options
Many businesses use migration as an opportunity to start fresh with a clean file, bringing over only opening balances and essential historical data.
Bank Feed Setup
After choosing your platform:
- Connect your bank accounts via direct feed
- Set up matching rules for recurring transactions
- Allow time to “train” the system’s categorisation
Training
Budget time for learning the new system:
- Vendor training webinars (usually free)
- Accountant-provided training
- Self-directed learning with help documentation
Most users become comfortable within 2-4 weeks of regular use.
Parallel Running
Consider running your old and new systems in parallel briefly to ensure accuracy. This is especially important if migrating mid-financial year.
Getting the Most from Cloud Accounting
Whichever platform you choose, maximise your investment:
Use Bank Rules
Set up rules to automatically categorise recurring transactions. A subscription payment to Telstra can automatically be coded to Phone Expenses every month without manual intervention.
Reconcile Regularly
Daily or weekly reconciliation is far easier than monthly. Cloud accounting makes this quick—five minutes a day is often sufficient.
Use the Mobile Apps
Capture expenses with photos of receipts while you’re on the go. Create and send invoices from your phone immediately after completing work.
Enable Integrations
Connect your other business tools to create automatic data flows. Manual double-entry between systems is error-prone and wastes time.
Set Up Reporting Dashboards
Create custom reports for the metrics you actually need. Review them regularly—cloud accounting provides real-time data; use it for real-time decisions.
Involve Your Accountant
Give your accountant advisor access to your file. They can review your bookkeeping, provide guidance, and prepare for tax time without you sending files.
Australian Compliance Features
All three platforms handle Australian tax requirements, but verify:
GST
- BAS preparation and lodgement support
- GST tracking and reporting
- Instalment activity statement support
Payroll Tax
If applicable in your state, ensure payroll handles state payroll tax calculations.
Super Guarantee
Single Touch Payroll compliance for superannuation reporting. All platforms support STP.
PAYG
Employee PAYG withholding calculations and reporting.
FBT
If you have fringe benefits obligations, check for appropriate tracking features.
Costs Beyond the Subscription
Budget for additional costs:
Add-ons: Payroll (if not included), inventory management, project tracking, and other add-ons add to monthly costs.
Integrations: Some third-party integrations have their own subscription costs.
Migration: Professional migration assistance if needed.
Training: Formal training if self-directed learning isn’t sufficient.
Accountant Time: Initial setup review and ongoing advisory time.
A realistic total cost for a small business might be:
- Platform: $50/month
- Payroll add-on: $10-20/month (if applicable)
- Key integrations: $20-50/month
- Total: $80-120/month
Compare this to the time value of automated bank feeds, real-time visibility, and streamlined accountant collaboration. For most businesses, cloud accounting pays for itself in time savings alone.
Making Your Decision
Here’s a practical decision framework:
- Talk to your accountant first—their preference matters
- List your must-have integrations—verify they work with candidate platforms
- Start a trial—all platforms offer free trials
- Process a week’s worth of transactions—experience the daily workflow
- Evaluate the mobile apps—if you’ll use them
- Check reporting—can you get the insights you need?
- Compare total cost—including add-ons you’ll need
If you’re still undecided after trials:
- Xero is the safe default for most Australian SMBs
- MYOB is the choice for businesses with employees and inventory
- QuickBooks Online is the value choice for simpler requirements
Taking the Next Step
Cloud accounting is a foundational business decision that affects your daily operations, financial visibility, and accountant relationships. Take time to choose wisely—it’s a decision you’ll live with for years.
Start with free trials of the platforms that seem most suitable. Process real transactions, generate real reports, and involve your accountant in the evaluation. The right choice will become clear through hands-on experience.
Need help migrating to cloud accounting or optimising your existing setup? We assist Australian SMBs with accounting system selection, migration, and integration. Reach out to discuss your needs.