History and Progression
MYOB software had its origins in the late 1990s when the impending advent of GST was about to place a huge administrative burden on small companies in Australia. The reporting requirements were such that without accurate accounts, a company would not be able to comply with the GST legislation. This encouraged large numbers of small businesses to move from paper-based systems to computerised accounting. This coincided with the fear of the Y2K bug, so businesses upgraded their hardware and moved into a new era of computerisation.
MYOB was at the forefront of this wave, having developed software for small Australian businesses. Not only was the software easy to use, but it cut through accounting jargon by converting debtors and creditors to “spend money” and “receive money”. This meant that you no longer had to be an accountant to keep books for your small business. MYOB developed a deep understanding of how small Australian businesses work. The software was localised, meaning that the language and the business processes used were in line with conventional Australian practices. Because their products were tailored to an Australian market, they were compliant with all taxation requirements, including GST.
MYOB continued to develop the software and a pathway evolved for businesses to easily migrate from the basic versions to the more complex versions of MYOB. A business would be able to move from MYOB Business Basics to Account Right Standard, Account Right Premier and Account Right Enterprise. As internet connectivity and speeds improved, MYOB took advantage of this and developed products that leveraged off the power of the cloud. Products such as Live Accounts and Account Right Live were introduced into the market.
MYOB is in touch and connected with their clients. As clients requested more functionality, the products became more complex and robust. The “top of the range” product became MYOB Account Right Enterprise which allowed multiple users to access the software at the same time.
Australian entrepreneurs were not going to be prevented from growing because of software constraints. As businesses grew and became more complex, so did their software requirements. In 2004, MYOB acquired Solution 6 and this was the start of its journey into software for larger, more complex organisations. The existing business software provided solutions for small to medium-sized businesses. The focus then expanded to include medium to large businesses.
Software as a Service
The advent of software as a service (SaaS) has provided MYOB with a similar opportunity to again broaden its target to include much larger businesses. MYOB acquired the rights to distribute Acumatica in Asia-Pacific. This is done under the name MYOB Advanced (discussed below).
As businesses grow, they go through several phases. The first phase can be called the start-up phase. The accounting requirements in this phase are fairly basic. Once the business is better established, the accounting requirements would need to cope with increased transactional volumes and provide reporting to management for decision-making purposes. Tax compliance is essential in all phases of a business’ growth.
Once a business reaches a turnover of about $6m a year, or about 20 employees, it undergoes quite a dramatic transition. In this first transition, reporting and financial control become important (as opposed to bookkeeping or accounting). As soon as a financial controller or finance manager is appointed to the team, the nature of the software used needs to change. Not only is the business looking at their financials, but they are also looking at non-financial indicators. Directors or managers need to understand the financial impact of their actions and at the same time, legal compliance must be maintained. It is at about this point that companies would look for an ERP system as opposed to an accounting system.
The second major transition is when the company has grown to the point where multiple people are doing multiple tasks. There is a separation or segregation of duties. For example, the accounts function now splits into Accounts Payable and Accounts Receivable. A person may be responsible for raising purchase orders, but another person would be responsible for approving them, and a third person responsible for receipting them. This segregation of duties and responsibilities is embedded in larger software systems. Small companies cannot operate using these systems as one person is still performing multiple functions.
MYOB Advanced for Larger Companies
Companies that are moving towards, or have moved into this separation or segregation of duties phase, would be well advised to look at MYOB Advanced, like our client Museum of Australian Democracy, who found the system to be the perfect fit for them. MYOB Advanced has a sophisticated general ledger system which can be segmented to suit the requirements of the individual company. It allows multiple profit and loss statements and balance sheets at a branch level and it can deal with multiple entities and consolidation of these. This is true Tier 2 software and requires an experienced finance team to get the best out of it. In addition, it is software as a service (SaaS), browser-based, and is sold on a subscription model with a monthly fee per user. MYOB Advanced has the benefit of MYOB’s heritage, backing and support and technical development and is a strong contender for any larger company looking for a robust ERP or accounting solution.
If you want to know more about MYOB Exo or MYOB Advanced and how it can help growth in your business, call us on 1300 857 464 or simply fill out the contact form below and we will have one of our MYOB Specialists have a chat with you.