Choosing the right accounting software can be overwhelming for small business owners and entrepreneurs. With so many platforms available—each with its own set of features, pricing, and integrations—making the wrong choice could cost you time, money, and accuracy in your financial reporting.
In this guide, we’ll walk you through a comprehensive, step-by-step approach to selecting the best accounting software for your business, with a focus on the top platforms: xero accounting, myob accounting, and Quickbooks Accounting. Whether you’re a startup founder, a solo freelancer, or an experienced accountant advising clients, this guide will help you make a confident and informed decision.
1. Understand Your Business Needs
Before diving into software demos or free trials, take a step back and evaluate your business’s core accounting requirements. Choosing the wrong software may result in paying for features you never use—or worse, lacking essential tools that hinder your operations.
Key Questions to Ask:
- What is the size of your business and how many employees do you have?
- Do you require payroll integration or will you outsource payroll?
- How frequently do you invoice clients or customers?
- Are you registered for GST and need BAS reports?
- Do you manage inventory or sell physical products?
- Do you operate in multiple currencies or countries?
- Do you have an accountant or bookkeeper who needs access?
For example, a retail store may prioritise inventory management, while a freelance designer may only need simple invoicing and expense tracking. Understanding these nuances will save you countless hours of trial and error later on.
Pro Tip: Interview your bookkeeper or accountant to ask what systems they are most comfortable with and how your business needs align with their workflow.
2. Compare the Top Accounting Platforms
Let’s examine the key differences between the three most widely-used accounting software options for small businesses in Australia: Xero, MYOB, and QuickBooks. Each offers unique benefits depending on your business model.
Xero Accounting
- Strengths: Intuitive interface, seamless bank feeds, mobile-first experience, robust third-party integrations.
- Ideal For: Tech-savvy business owners, startups, and service-based businesses looking for scalable, cloud-native tools.
- Standout Features: Automatic bank reconciliation, real-time financial dashboards, built-in project tracking.
Xero also offers features that simplify compliance with ATO reporting requirements, such as STP (Single Touch Payroll) and BAS submissions, making it a smart choice for businesses that need to stay on top of changing tax laws.
MYOB Accounting
- Strengths: Local compliance support, hybrid online/desktop functionality, strong payroll capabilities.
- Ideal For: More traditional businesses that want desktop stability with cloud flexibility.
- Standout Features: Superannuation payments, job tracking, purchase order management.
MYOB is especially popular among accounting firms and established SMEs. Its detailed chart of accounts and granular reporting give greater control over financial data for accountants.
QuickBooks Accounting
- Strengths: User-friendly for sole traders and freelancers, cost-effective, excellent invoicing features.
- Ideal For: Small businesses looking for basic but professional accounting tools on a budget.
- Standout Features: Time tracking, mileage tracking, estimate-to-invoice conversion.
QuickBooks shines with its automation capabilities and user-friendly mobile app, making it a go-to choice for small service-based businesses and gig workers.
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3. Evaluate Features That Matter Most
Beyond basic invoicing and reconciliation, today’s accounting tools come with a range of features that can automate operations, reduce human error, and provide real-time insights.
Essential Features:
- Automatic bank feeds and reconciliation
- Invoicing with custom branding and payment links
- Expense categorisation and receipt scanning
- Payroll and superannuation compliance
- Financial reports (profit & loss, balance sheet, cash flow)
Advanced Features:
- Project tracking and profitability analysis
- Inventory tracking with reorder alerts
- Multi-user access with permission controls
- GST/BAS reporting for the ATO
- Job costing and timesheet integration
Don’t Miss This: Some features are only available in premium tiers. Don’t assume payroll or multi-currency support is included in entry-level plans—read the fine print!
4. Test the Software with Free Trials
Testing before committing is crucial. All three platforms offer free trials (usually 30 days). Use this time wisely to explore real use cases within your business.
During the Trial, Be Sure To:
- Enter sample clients and suppliers
- Create real invoices and set payment reminders
- Upload and categorise real expenses
- Connect your bank account for live feed testing
- Use the mobile app to test access on the go
Don’t forget to explore the support resources—does the platform offer live chat, video tutorials, or access to a user community? A responsive support team can make a huge difference when you’re facing issues close to BAS time.
5. Get Feedback and Make a Confident Decision
Before finalising your choice, discuss your findings with your accountant, bookkeeper, or business mentor. They may highlight red flags or suggest alternatives based on years of experience.
- Ask for feedback on the trial experience from everyone who will use the system.
- Read user reviews on platforms like Canstar, ProductReview, or Capterra.
- Ensure scalability by confirming that your plan can accommodate future growth.
Also, be wary of software that requires too much customisation or ongoing IT support. Ideally, your solution should be plug-and-play with intuitive updates and self-service options.
Quick Recap: Choosing the Best Accounting Software
- Assess your business needs — Know what problems you’re solving
- Compare Xero, MYOB, and QuickBooks — Focus on strengths and limitations
- Evaluate features — From core tools to advanced automation
- Use trial periods effectively — Simulate real workflows
- Consult experts — Get feedback from advisors and real users
Ready to Take the Next Step?
Still unsure? Book a free consultation with one of our experienced business advisors who can guide you through selecting the right accounting solution tailored to your operations and industry.
Download our free side-by-side comparison checklist of Xero, MYOB, and QuickBooks to help you evaluate features, pricing, and support levels in one place.
Want to get your business books sorted fast? Read our complete guide to starting a small business in Australia for a full checklist from ABN registration to bookkeeping basics.