Choosing accounting software should be a boring, practical decision. Instead, it’s become a minefield of subscription tiers, feature creep, annual price increases, and vendor lock-in. I’ve helped dozens of small businesses select and implement accounting systems over the past five years, and the number one mistake I see is choosing based on the sales demo rather than the day-to-day reality.

Here’s what you actually need to consider, minus the hype.

The Big Three in Australia

For Australian small businesses, the market effectively comes down to three platforms:

Xero — the dominant player in Australia and New Zealand. Cloud-native, clean interface, enormous ecosystem of add-on integrations. Pricing starts at $29/month (Starter, limited to 20 invoices/month) and goes to $78/month (Premium) before any add-ons. Used by roughly 60% of Australian small businesses with cloud accounting.

MYOB — the legacy player that’s been modernising. Originally desktop software, now fully cloud-based with MYOB Business. Pricing ranges from $26/month to $70/month. Stronger in payroll and compliance for businesses with employees. Used extensively by businesses that have been around long enough to remember MYOB AccountRight.

QuickBooks Online — Intuit’s global platform. Well-known internationally, smaller market share in Australia but growing. Pricing from $15/month to $60/month (before promotions expire). Strong reporting, decent payroll, weaker third-party ecosystem in Australia compared to Xero.

What the Sales Demos Don’t Show You

Price increases. All three platforms have increased prices annually for the past several years. Xero’s prices have roughly doubled since 2019. MYOB’s have increased similarly. QuickBooks uses aggressive introductory pricing ($7.50/month for the first year becomes $30/month in year two). When evaluating cost, look at the full published price, not the promotional rate.

The add-on cost trap. Base subscription prices are deceptive because most businesses need add-ons. Payroll, inventory management, time tracking, project management, multi-currency — features that seem like they should be included often require either a higher subscription tier or a separate add-on product.

A Xero subscription at $78/month sounds reasonable until you add Xero Payroll for employees (included, but only basic), an inventory management tool like Cin7 ($349/month), time tracking via Harvest ($12/user/month), and an expense management tool. Your $78/month “accounting software” is suddenly $500+/month of interconnected subscriptions.

Bank feed reliability. All three platforms advertise automatic bank feeds — your transactions appear in the accounting software for categorisation. In practice, bank feeds break. Regularly. A bank changes its API, or a security update disrupts the connection, and suddenly you’ve got two weeks of missing transactions that need manual import. This isn’t a deal-breaker, but it’s not the “fully automated bookkeeping” the marketing implies.

BAS lodgement isn’t magic. The platforms can generate BAS (Business Activity Statement) data, but the accuracy depends entirely on your transaction categorisation being correct. If you’ve been miscategorising GST-free items as GST-inclusive all quarter, the generated BAS will be wrong — and neither the software nor the ATO will catch it until a review or audit.

What Actually Matters for Selection

After helping dozens of businesses through this decision, here’s what I’ve found genuinely matters:

Accountant/bookkeeper compatibility. Your accountant almost certainly has a preference, and that preference should carry significant weight. If your accountant is a Xero partner and you choose QuickBooks, you’ll pay for the friction in higher bookkeeping costs and slower year-end processing. Ask your accountant what they recommend before shopping.

Industry-specific needs. Hospitality businesses need POS integration. Tradies need job costing. Retail needs inventory. Professional services need time tracking and project billing. The “best” software is the one that handles your specific workflows without excessive add-ons.

Payroll complexity. If you have employees — especially casual employees, shift workers, or employees across multiple award rates — payroll capability should be your primary selection criterion. Getting payroll wrong has real penalties: the Fair Work Ombudsman doesn’t care that your software miscalculated overtime. MYOB’s payroll is generally stronger for complex Australian award interpretation. Xero has improved but still struggles with some edge cases.

Migration effort. Switching accounting software mid-stream is painful. Chart of accounts needs rebuilding, historical data needs importing, bank feeds need reconnecting, and integrations need reconfiguring. The typical migration takes 2-4 weeks of active effort. This means your initial choice carries more weight than you might expect — the switching cost acts as lock-in.

The Newcomers Worth Watching

Beyond the big three, some newer platforms are worth awareness:

Rounded — designed specifically for sole traders and freelancers in Australia. Much simpler than Xero or MYOB, with pricing from $15/month. If you’re a one-person business without employees or inventory, it might be all you need.

FreshBooks — strong for service-based businesses with excellent time tracking and invoicing. Less capable for product-based businesses or those needing full double-entry accounting.

Wave — free accounting software that’s genuinely free (not freemium). Paid features include payroll and payments processing. The trade-off is less Australian-specific compliance support and a smaller integration ecosystem.

My Honest Recommendations

Sole traders and freelancers: Start with Rounded or Wave. You don’t need Xero’s full feature set, and paying $78/month for features you’ll never use is waste.

Small businesses with 1-10 employees: Xero (Growing plan) or MYOB (Growing plan). Both handle this size well. Let your accountant’s preference be the tiebreaker.

Businesses with complex payroll: MYOB. Its payroll engine handles Australian award complexity better than Xero in most scenarios.

Businesses heavily dependent on integrations: Xero. Its third-party app marketplace is significantly larger than MYOB’s or QuickBooks’ in the Australian market. If you need your accounting software to talk to your CRM, inventory system, project management tool, and e-commerce platform, Xero has the most connection points.

The Thing Nobody Talks About

No accounting software will fix bad bookkeeping habits. If you’re not categorising transactions regularly, not reconciling bank feeds weekly, and not reviewing reports monthly, the most expensive platform in the world won’t give you accurate financial data.

I’ve seen businesses on $78/month Xero plans with 6 months of uncategorised transactions, and businesses on free Wave plans with immaculate books. The software is a tool. The discipline of using it consistently is what actually produces useful financial information.

Before agonising over which platform to choose, ask yourself honestly: will I (or someone on my team) actually use this regularly? If the answer is no, the platform choice is irrelevant. Hire a bookkeeper first, then let them choose the software.

The best accounting software is the one that gets used. Everything else is secondary.