SMB Accounting

1. Introduction: Navigating Financial Management for Australian Sole Traders

For Australian sole traders and emerging small businesses, efficient financial management, invoicing, and tax compliance are crucial. Selecting the right financial tool can significantly reduce administrative burden, ensuring compliance and fostering growth. This report provides a factual comparison of four prominent solutions: Thriday, Hnry, MYOB, and Xero, detailing their core functionalities and pricing structures. The market is increasingly offering specialised tools tailored to the unique needs of individual entrepreneurs, emphasising simplicity, automation, and integrated services.

2. Thriday: The Integrated Banking & Accounting Solution

Thriday offers an all-in-one financial management platform, uniquely combining a business bank account with integrated accounting tools to centralise banking, invoicing, and tax management.

Core Features of Thriday

Thriday provides a business bank account with $0 monthly account keeping fees and $0 ATM withdrawal fees (within its network). Users can open up to 10 business bank accounts and receive complimentary Visa Debit cards, earning 2.85% p.a. interest on the account balance. Account setup is quick and online, with no paperwork.

The "Free plan" is comprehensive, including automated income/expense reconciliation, transaction categorisation, GST tracking, bookkeeping, tax calculation/forecasting, and real-time financial reports. Users can send unlimited invoices, accept card payments (via Stripe), schedule payments, and manage unlimited clients. Additional features across all plans include customisable branding, task tracking, automated cash flow reporting, business credit score viewing, unlimited transactions, BPAY, and cash deposits/withdrawals via Bank@Post. Automated bill capture, invoice fraud protection, and receipt scanning are also included.

Thriday's Pricing Structure

Thriday uses a tiered pricing model:

• Free Plan: $0 forever, offering core accounting and banking features

• Time-saver Plan: $29.95 per month ($299 annually), adding automated budgeting and enhanced expense management

• Done-for-you Tax Plan: $88 per month (billed annually), includes cash flow/tax planning and human accountant support for annual tax obligations

• Done-for-you BAS + Tax Plan: $119 per month (billed annually), offering full accountant support for both BAS and annual tax obligations

Thriday's integrated banking and interest-earning feature differentiate it from traditional models, directly impacting a sole trader's working capital and potentially offsetting subscription costs. The robust "Free Plan" aims to attract users by offering significant value without upfront commitment, encouraging upgrades to paid plans with human accountant support as businesses grow.

3. Hnry: Your Dedicated Tax & Accounting Partner

Hnry provides a comprehensive service bundling human accountant support for tax and compliance, operating on a "pay-as-you-earn" model.

Core Features of Hnry

Hnry charges a 1% + GST fee on income paid into its dedicated Hnry Bank Account, capped at $1,500 + GST annually. A minimum fee of $0.50 applies for payments under $50. Hnry automatically claims its fees as a business expense.

The platform automates tax and compliance by calculating and deducting all relevant taxes (income tax, GST, Medicare levy, student debts, ACC) as income is received, creating a PAYG-like system. Expert accountants file all tax returns (income tax, BAS statements) when due, even for complex cases. Hnry facilitates expense management, with accountants reviewing expenses in real-time for tax relief and advising on claims. The service includes tools for sending unlimited invoices and quotes, customising them, chasing late payments, and accepting various payment options (including credit card payments) at no extra cost. Premium support from expert accountants is available for complex tax questions. Users can also allocate money to savings and investments.

Income is initially paid into a dedicated Hnry trust account. Taxes are deducted, and the remainder is transferred to the sole trader's personal bank account, often within seconds. While this ensures tax liabilities are met, it means users only access a portion of their income immediately, which could pose cash flow challenges for larger businesses.

Hnry's "accountant-in-a-box" model, bundling human accountants into the fee, addresses tax complexity for sole traders by providing comprehensive compliance and expert guidance. This fundamentally differentiates Hnry from software-only solutions, offering a hands-off approach for a predictable cost, reducing administrative burden and compliance risk.

4. Established Contenders: MYOB & Xero for Small Business

MYOB and Xero are long-standing, comprehensive accounting software solutions widely adopted by Australian small to medium businesses, offering a broader range of features and integrations.

4. 1. 1. 1. MYOB for Sole Traders & Small Businesses
            MYOB offers "Solo" and "Lite" plans relevant for sole traders and emerging small businesses.

Relevant MYOB Plans & Features:

4. 1. 1. 1. • • MYOB Business Solo: A mobile app for sole operators, freelancers, and the self-employed. Features automated tax/GST tracking, unlimited invoices, in-person payments (fees apply: $0.30 + 1.6% of invoice), simple cash flow graphs, an in-app Solo Money Account (free business bank account), online payments acceptance (fees apply: $0.25 + 1.8% of invoice), connection to two existing bank accounts, and snap-and-track expense functionality. 24/7 in-app chat support is provided. Limitations include no data migration from other software and inability to change plans later. Payroll and inventory are not included. Pricing is $12 for the first 12 months, then $99 per year.

              • MYOB Business Lite: For sole traders and small businesses with up to two employees. Enables GST/BAS tracking and lodgement, inventory/order management, unlimited professional invoices/quotes, receipt scanning via MYOB Capture App, and online payment acceptance (fees apply). Assists with tax management and basic reports, tracks income/expenses, connects up to two existing bank accounts, and allows job tracking. Payroll can be added for up to two employees at an extra $2 per month per employee. It is 100% web-based. Pricing is $61.20 per year for the first 12 months, then $306 per year.

MYOB's distinct mobile-first "Solo" and web-based "Lite" plans cater to different preferences, but users must anticipate future needs as the Solo plan limits future flexibility. Add-on pricing for features like payroll can lead to higher total costs not immediately apparent from the base subscription.

4. 1. 1. Xero for Sole Traders & Small Businesses
         Xero is a popular cloud-based accounting software known for its user-friendly interface and integrations.
         
         Relevant Xero Plans & Features:

         2. • Xero Starter Plan: Entry-level for sole traders or micro-businesses. Limits users to 20 invoices/quotes and 5 bills, provides basic bank reconciliation, and includes GST reporting. Receipt capture via Hubdoc is available. Key limitations include strict transaction volume limits and no payroll functionality. Suitable for freelancers managing $50,000-$100,000 turnover. Pricing is approximately $29-$30 per month.

            • Xero Standard Plan: Suitable for growing domestic businesses , ideal for SMEs with 5-20 employees and over $200,000 revenue. Removes transaction limits for unlimited invoices/bills, offers full bank reconciliation, comprehensive GST reporting, and short-term cash flow projections. Does not include multi-currency support , and payroll remains an optional add-on. Pricing is around $60 per month.

Payroll is typically an extra cost (e.g., $10/month for the first employee, $5 for each additional). Hubdoc is also an add-on. Xero's cloud architecture ensures accessibility, and it integrates with over 160 financial institutions for real-time transaction imports, with AI categorising entries.

Xero's Starter plan's strict transaction limits often compel users to upgrade quickly, potentially doubling monthly costs. Its reliance on add-ons for features like payroll can fragment the user experience and lead to higher overall expenditure compared to bundled services.

5. Comparative Analysis: Choosing Your Ideal Financial Tool

The choice depends on a sole trader's income predictability, comfort with DIY accounting, desire for integrated banking, and willingness to pay for human support.

1. Pricing Models: Subscription vs. Percentage-Based

   • • Hnry: 1% income-based fee (capped at $1,500/year + GST), ideal for fluctuating incomes as payment aligns with earnings

     • Thriday: Offers a free banking/basic accounting plan, with paid subscriptions from $29.95/month to $119/month for "Done-for-you" services

     • MYOB & Xero: Primarily subscription-based with tiered plans, costs increasing with transaction volumes, users, or add-on features like payroll

The choice between Hnry's percentage-based fee and fixed subscriptions depends on income predictability. Hnry's "Only pay when you're earning!" model benefits those with unpredictable income, while fixed subscriptions might be more cost-effective for stable, high earners.

2. Core Functionality & Service Level

   • • Invoicing & Expense Management: All provide these. Thriday and Hnry emphasise automation and real-time expense review, with Hnry including human oversight.

     • Bank Integration & Cash Flow: Thriday uniquely integrates a business bank account with interest-earning capability. Hnry uses a trust account for income, deducting taxes before transferring funds. MYOB Solo offers an in-app bank account, while MYOB Lite and Xero connect to existing bank accounts via feeds.

     • Tax & BAS Support: Hnry excels with expert accountants filing all returns as part of the service. Thriday offers automated tax calculation/forecasting in its free plan, with human support in higher tiers. MYOB and Xero provide tools for GST/BAS but typically require users to manage filing or engage a separate accountant.

The level of human intervention varies significantly. Hnry fully outsources tax compliance, Thriday offers human support in higher tiers, while MYOB and Xero provide software tools, leaving filing responsibility to the user or a separate accountant.

3. Scalability & Growth Considerations

   • • Thriday: Offers a clear upgrade path from free tools to accountant-supported plans, supporting growth without platform changes. Multiple bank accounts aid internal organisation.

     • Hnry: The annual fee cap ($1,500 + GST) provides cost predictability for high earners, making it scalable up to a point where a dedicated accountant might be more cost-effective.

     • MYOB: Provides distinct plans (Solo, Lite, Pro, AccountRight) for increasing complexity and employee count. However, Solo has limitations on future plan changes and data migration.

     • Xero: Tiered plans (Starter, Standard, Premium, Ultimate) allow for growth, but Starter's transaction limits often necessitate quick upgrades, and add-ons increase costs.

Scalability involves both features and cost increases. Xero's hard limits and MYOB Solo's non-upgradable nature can lead to unexpected cost jumps or platform switches for growing businesses. Hnry's capped fee offers predictable maximum cost, while Thriday's free plan provides a low-cost entry with incremental upgrades.

6. Tables for Comparison