Why MYOB Software is Not Only For Small Companies

Brief History of MYOB

MYOB software had its origins in the late 1990s during the time when GST was about to place a huge administrative burden on small companies in Australia. The reporting requirements meant 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. Consequently, businesses moved into a new era of computerisation or upgraded their existing systems.

MYOB was at the forefront of this wave, having developed software for small Australian businesses. Not only was MYOB’s 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, MYOB was compliant with all taxation requirements, including GST.

Progression of MYOB software

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. They 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 regularly in touch and connected with their users. As users 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.

Software constraints were not going to prevent Australian entrepreneurs from growing. As businesses grew and became more complex, so did their software requirements. In 2004, MYOB acquired Solution 6. This was the start of its journey into software for larger, more complex organisations. The existing MYOB business software provided solutions for small to medium-sized businesses. The focus then expanded to include medium to large businesses which is where MYOB ERP came in. Enterprise Resource Planning (ERP) refers to software that organisations use to manage day-to-day business activities. Nowadays, a complete MYOB ERP suite includes enterprise performance management, software that helps; plan, budget, predict and report on an organisation’s financial results.

Transition Phases

As businesses grow, they go through several phases. We call the first phase the start-up phase. The accounting requirements in this phase are fairly basic. Following establishing a business, the accounting requirements need to cope with increasing 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.

When looking at MYOB’s portfolio for medium to larger businesses, you will find a range of MYOB ERP solutions that suits every business size and type.

which MYOB ERP software is right for my business?

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 cloud-based ERP, MYOB Advanced. An example is 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 with many segments to suit the requirements of every organisation. It allows multiple profit and loss statements and balance sheets at a branch or tenant level. This MYOB ERP can deal with both multiple entities and consolidation of these. Find out more about how MYOB Advanced can streamline your financials here.

This is true Tier 2 software and requires an experienced finance team to get the best out of it. It is software as a service (SaaS), browser-based, and sold on a subscription model with a monthly fee per user. MYOB Advanced has the benefit of MYOB’s heritage, localisation, backing and support and technical development. It is a strong contender for any larger company looking for a robust ERP or accounting solution.

MYOB Exo for medium to large companies

Having the vision to grow your business is one thing, but having the tools to do it is essential. If you are not ready for a cloud-based product or prefer to have your own system hosted, have a look at MYOB Exo, a highly configurable business management solution that allows you to centralise all your business processes in one place. MYOB Exo provides greater insight into all facets of your operations, along with more control. This MYOB ERP solution has the flexibility to grow with your business. You can view and analyse inventory management, job or projects costings, HR, Payroll and every other aspect of your operations, giving you the information required to make better business decisions.

Moving to MYOB ERP

As your company processes become more complex, you might feel as though your current accounting software is limiting your business.  Moving from off-the-shelf software such as MYOB AccountRight or similar accounting products is a fundamental step to take your business to the next level.

MYOB Exo is an ERP software for growing businesses. Its flexibility and SQL back-end allows it to be seamlessly integrated with other solution you might already have in your company. Your business can also connect with many Cloud-based add-on solutions. These products can easily expand the specific functionality your business need.

For more information, read the key differences between MYOB Exo and MYOB Advanced here.

If you want to know more about MYOB ERP, including MYOB Exo or MYOB Advanced and how it can help grow 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. To continue reading about the products, download the free PDF downloads below.

Making Your Way Through The ERP Selection Process

What is an ERP?

ERP is an abbreviation of Enterprise Resource Planning software. It evolved from accounting software and gives businesses the ability to measure and manage both financial and non-financial aspects of their organisation. A business may have an inventory system, a job/project costing system, a point-of-sale system, a fixed asset register, and a payroll system. An ERP system would combine all of these components and allow the business owner to extract reports that are accurate and balance with the general ledger. This makes the decision-making process easier and more transparent.

How do I know when I need an ERP?

As businesses grow, they become more complex. There are some common signs that appear which may indicate that you need an ERP. Typically, a business will start creating reports in Microsoft Excel and doing reconciliations to make sure that these reports tie back to the accounts. Therefore, manual processes start becoming cumbersome and taking up large amounts of time. The company starts looking for ways to become more efficient. The number of people requiring access to information increases. Access to real-time information across the organisation is a primary driving factor in moving to an ERP system.

Choosing the right ERP

Buying an ERP system is like buying a car. There is an enormous array to choose from. The best approach is to first define your requirements and then look for systems that meet those requirements. Buyers often get overwhelmed by enthusiastic salespeople telling them about all the bells and whistles. It is best to ignore this tactic and to focus on your core functionality requirements.

Stick to well-known brands and make sure that the implementing partner can support you for many years to come. Remember that an ERP has three components:

  1. The software
  2. The implementation (including training)
  3. The ongoing support and business process improvement

An ERP system cannot be implemented without a professional service provider. This is one of the main differences between an accounting system and an ERP system.

Hosted vs on-premise

Once you have found an ERP system that meets your requirements, you then need to decide how this will be deployed. If you have selected software that is only available as a service (SaaS), you will have no choice. With other software, you may have the choice between an on-premise server or a hosted server. Your choice, in this case, will be based on three factors:

  1. Internet connectivity and speed
  2. Cost
  3. Integration requirements

Software as a service (SaaS) configurability

SaaS systems tend to be “one size fits all” and has limited configuration options. You may be lucky and find a system that provides you with all the functionality that you require. Likewise, larger, more complex businesses are likely to require larger, more complex systems. Fortunately, there are now SaaS systems, like MYOB Advanced, that allow configuration and are suited to complex businesses.

What does it cost?

The cost of an ERP system is made up of 5 components:

  1. The initial cost of the licenses from the software vendor
  2. The annual license fee charged by the software vendor
  3. Hosting costs (if any)
  4. The consulting fees charged by the implementer, usually based on the number of hours it takes to implement the software
  5. Support fees and training costs, usually charged by the implementer

Software as a service (SaaS) comprises a monthly subscription. As you are not buying the software, there is no initial cost (point #1 above). The monthly subscription covers #2 and #3 above. On the other hand, for entry-level ERP systems, you could expect to pay approximately $100 per user per month. For more complex businesses, this could be as much as $300 per user per month.

If you are purchasing ERP licenses upfront (in other words, not SaaS), you are likely to be paying between $2000 – $3500/user upfront, with an annual license fee of approximately 20-25% of this.

Consulting Fees

Be very wary of implementers who claim that they can implement an ERP in less than 100 hours. Typically, you would be looking at between 120 – 200 hours for an entry-level implementation and up to 1000 hours for a larger, more complex implementation. Consulting rates will vary between $150/hour and $300/hour, depending on the complexity, implementer skills, and the charge-out rates of the implementing partner.

Budget

For a mid-sized company, transitioning from an accounting system like MYOB AccountRight or MYOB Premier to an ERP system, you should be prepared to spend in the region of $50, 000 to $100,000. This depends on your exact requirements, the complexity of your business and the amount of training required. Other factors such as integrations will increase your investment.

Taking the next step

Selecting an ERP system is not an easy task and advice from a trusted source will help you to make an informed decision. At Kilimanjaro Consulting we provide an initial, no-obligation, no-cost assessment and indicative budget. We are the largest and most experienced implementer of MYOB Enterprise Solutions and have helped many businesses over the last 11 years.

If you would like to discuss your options with us, please call on 1300 857 464 or email us for a consultation at [email protected]. If you think you’ve made your decision about an ERP system, the next step is to think about what you should expect from your implementing partner.