We review the best small business and investing books
Mind Your Own Businss (MYOB)
MYOB is an excellent program for smaller service businesses and product-based businesses which track inventory on a average-cost basis. However, if you operate a product-based business which must track inventory on a LIFO basis, you won't be happy with the inventory-management features of this program.
MYOB doesn't support LIFO or FIFO. It can only track inventory on a rolling average cost basis (Quickbooks is similarly limited. Peachtree Complete Accounting has LIFO as an option.). While average cost inventory isn't bad, if you want/need LIFO, you're SOL with MYOB. MYOB help doesn't even mention the concept of LIFO!
(As an aside: LIFO, FIFO, and specific cost valuation methods are approved by the IRS under Regulations 1.471-3, where inventory is valued at cost. Average cost is probably approved for most businesses, as long as average cost is acceptable within your industry and as long as it fairly states a company's income. In cases where a company has aging inventory (such as wine, I suppose), average-cost might not be acceptable for IRS taxation purposes. But, if you're dealing with inventory that must be aged, you probably have a custom inventory program. Check with your accountant if you're unsure if you can use average cost for taxation reporting purposes.)
An annoying aspect of the program is the convenient list of drop down names for customers that is provided when entering sales. This works great if you have only a few key customers, but if you serve many, many different customers, you'll find the drop down list far too long to be able to quickly locate your most common sales accounts. It would be nice is there were some classification, categorization, or nesting of customers, so that only key accounts would display when adding sales. (Maybe there is, but I haven't found it yet.)
I tried creating a "customer" named "individual sale" and using it for multiple customers. But this method is inherently dangerous, because payments could be attributed to the wrong customer. So, you're stuck with long drop down lists.
Also if you're entering customer payments, there's no button to easily add a customer credit. (You can do it elsewhere.) If payments are made in excess of money owed, MYOB chalks it up to "Finance Charges," if you aren't careful. A button "create customer credit" would be nice. (For prepaid orders, when a payment is entered along with the sale, you're given the ability to immediately issue a refund or else create a credit. "Issue Refund" immediately opens your checkbook to write the check, which is handy. But, if customers overpay after being invoiced, it's a bit less convenient.)
Other than that, I like the layout of this program. There's a "bank" feature that allows you to "spend money" which mimics your checkbook. You can "make deposits" of "undeposited" funds, which essentially mimics holding checks and then depositing them. "Receive cash" is handy for entering revenue you want to match with a particular income account, but that doesn't relate to a customer payment for a product or service. (For example, if you're an Amazon associate, you might have an income account "Amazon Associate Income." Then, when you receive your Associate payment, you can use "receive money" to attribute this money to that income account.)
Sales are easily entered, as are customer payments. Payments for sales should be entered under the "Sales" section. And, you're allowed to allocate payments to multiple invoices in any way you desire. However, while your own invoice number is listed as you're allocating payments, the PO of the company making the purchase isn't available. You'll need to go to another window to get it. So, if a payment received only has the other company's PO number and not your invoice number, you'd need to do some clicking around to attribute the payment properly. It would be nice to show the customer's PO when allocating payments to various invoices.
Of course, you can create your own accounts, delete accounts you don't need, and examine balances in your accounts. When in doubt, for those who are more familiar with accounting, under "Accounts" there is a place to record journal entries directly. For example, if you must deduct $4 as a bank service fee and aren't sure where else to do it, you could manually credit your checking account $4 and debit the expense account "bank charges." (And, you could examine your balances in the expense account and checking account to be sure you entered it correctly.) You can create templates of frequently used journal entries. You can always delete a journal entry and start over or reverse transactions to maintain an audit trail. And, you can examine the transactions you've made.
For your starting set of accounts, MYOB allows you to import a set, create your own set, or start with a template set of accounts appropriate to various types of businesses, such as newspaper publishers, etc.
Overall, this is a very good program. You're asked to pay about $200 for annual support. You get 30 days of support free.
If you don't need LIFO and you're comfortable with basic double-entry bookkeeping, MYOB might be right for you.Review by Peter Hupalo