Best Accounting Software for Small Business Australia | Xero, MYOB, Excel Compared

What’s the Best Accounting Software for Small Business in Australia?

Choosing the right accounting software can make a major difference to your business operations — not just for staying compliant with the ATO, but also for saving time and making better financial decisions.

So what’s the best accounting software for small businesses in Australia? The answer depends on your size, industry, budget, and whether you’re doing your own bookkeeping or working with a bookkeeper.

Here’s a breakdown of the top options and how to choose the right fit.

1. Xero: The Leading Choice for Small Businesses

Is it worth getting Xero?
For most small businesses in Australia — yes. Xero is built with business owners in mind and is widely used by accountants and bookkeepers.

Key benefits of Xero:

• Live bank feeds for easy reconciliation

• Invoice creation and tracking

• Payroll, GST, and BAS functionality

• Access anywhere via the cloud

• Seamless collaboration with your accountant or bookkeeper

Best for:
Sole traders, service businesses, consultants, e-commerce, and those who want a scalable solution.

2. MYOB: Trusted Legacy Software with Strong Payroll Features

Why choose MYOB over Xero?
While Xero is the newer player, MYOB still has a strong hold on the Australian market, particularly in industries like construction, manufacturing, and retail.

Advantages of MYOB:

• Robust payroll tools

• Industry-specific features (especially for inventory-heavy businesses)

• In-house support based in Australia

• Offline access options (with MYOB AccountRight)

Best for:
Businesses with complex payroll, inventory, or those already familiar with the MYOB environment.

3. Excel: Budget Option for Micro Businesses

For start-ups or sole traders on a tight budget, Excel remains a low-cost option for basic bookkeeping. It’s flexible, customisable, and requires no monthly fees — but it does require discipline.

Limitations of Excel include:

• No automatic bank feeds

• No built-in tax or compliance functions

• High risk of manual errors

• No collaboration features with bookkeepers or accountants

Best for:
Freelancers or hobby businesses with very few transactions per month.

What Are the Weaknesses of Xero?

While Xero is powerful, it’s not perfect. Some of the common complaints include:

• Cost: Monthly subscriptions can add up as you grow

• Learning curve: Some users need time to become comfortable

• Limited offline access: It’s cloud-based only

• Complex setup for industry-specific workflows

That said, many of these weaknesses can be mitigated with the help of a professional bookkeeper during setup and training.

How Do You Decide Which Account to Set Up in Accounting Software?

This decision depends on:

• Your business structure (sole trader vs company)

• The type of income and expenses you generate

• Your tax obligations (GST-registered, employing staff, etc.)

• Whether you or your bookkeeper is maintaining the system

Most software comes with default chart of accounts templates. However, these often need to be tailored — especially if you want accurate financial reports or to prepare for tax time.

At Justwise Accounting, we guide clients on which accounts to use or customise based on their industry, goals, and ATO reporting needs.