Accounting Software FAQs

For small businesses in NZ (1-50 employees), Xero is often the top choice due to its user-friendly interface, comprehensive GST compliance, and seamless integration with New Zealand banks. It was founded in Wellington and is specifically designed for the NZ market. QuickBooks Online and FreshBooks are also excellent options, particularly for service-based businesses. The best choice depends on your specific needs - Xero excels at overall functionality, QuickBooks offers great value for money, and FreshBooks is ideal for invoicing-heavy businesses.

Accounting software in NZ typically ranges from $25 to $200 per month. Entry-level plans like Xero Starter ($25/month) or FreshBooks Lite ($19/month) suit sole traders and very small businesses. Mid-tier options like Xero Standard ($65/month) or QuickBooks Plus ($110/month) work for most small to medium businesses. Enterprise solutions like MYOB Advanced ($139-189/month) or AccountsIQ ($89-179/month) cater to larger businesses with complex needs. Most providers offer free trials, and costs can increase with add-ons like payroll integration or additional users.

Yes, absolutely. NZ businesses must choose accounting software with built-in GST compliance features. This includes accurate GST calculations (15%), automatic GST return preparation, support for different GST rates (standard, zero-rated, exempt), mixed supply handling, and IRD integration. All major providers like Xero, MYOB, QuickBooks Online, and Sage offer NZ-specific GST features. Using software without proper NZ GST support can lead to costly errors, compliance issues, and time-consuming manual adjustments during tax time.

Yes, all reputable NZ accounting software providers offer automatic bank feeds with major New Zealand banks including ANZ, ASB, BNZ, Westpac, Kiwibank, and TSB. Bank feeds automatically import your transactions daily, making reconciliation faster and more accurate. Xero, MYOB, QuickBooks Online, and other leading platforms have established secure connections with NZ banks. This automation can save 5-10 hours per month on manual data entry and significantly reduces the risk of errors in your financial records.

Cloud-based accounting software is generally better for most NZ businesses in 2025. Cloud solutions like Xero, QuickBooks Online, and MYOB Business offer advantages including access from anywhere, automatic backups, real-time collaboration with accountants, automatic updates, mobile apps for on-the-go management, and lower upfront costs. Desktop software (like MYOB AccountRight Desktop) may suit businesses with limited internet, specific security requirements, or those preferring one-time purchases. However, 85% of NZ businesses now use cloud accounting due to its flexibility and modern features.

Basic setup of cloud accounting software typically takes 2-5 hours for a small business, covering account creation, bank connections, chart of accounts configuration, and basic customization. However, full implementation including historical data migration, team training, workflow optimization, and integration setup can take 1-4 weeks. Simple businesses with straightforward needs might be operational within a day, while complex businesses with inventory, multiple locations, or custom requirements may need 4-12 weeks. Most providers offer onboarding support, and many NZ accounting firms provide setup services for $500-2,000.

Yes, you can switch accounting software, and most providers offer data migration tools or services. However, the ease of migration varies. Most software can export data to CSV or Excel files that can be imported into your new system. Key considerations include: historical transaction data (usually 7 years for NZ tax purposes), chart of accounts mapping, customer and supplier records, open invoices and bills, and bank reconciliation status. Many businesses use their financial year-end as the ideal switching point. Professional migration services (typically $500-5,000 depending on complexity) can ensure a smooth transition and data integrity.

Some accounting software includes payroll features, while others require separate payroll software or add-ons. Xero Payroll (additional $10/month + $2/employee) handles NZ payroll including PAYE, KiwiSaver, student loan deductions, and leave management. MYOB includes payroll in most plans with full NZ compliance. QuickBooks Online requires QuickBooks Payroll as an add-on ($10-25/month). Alternatively, specialized NZ payroll software like PayHero, iPayroll, or Smartly can integrate with most accounting platforms. For businesses with 5+ employees, dedicated payroll features or integration is highly recommended for compliance and efficiency.

Priority features for NZ businesses include: 1) GST compliance and IRD integration for accurate tax reporting, 2) Automatic bank feeds with NZ banks for efficient reconciliation, 3) Invoice creation and payment processing to improve cash flow, 4) Financial reporting (P&L, balance sheet, cash flow) for business insights, 5) Multi-user access if you have a team or accountant, 6) Mobile app for on-the-go management, 7) Integration capabilities with existing tools (CRM, e-commerce, payroll), 8) Inventory management if you sell products, 9) Expense tracking and receipt capture, and 10) Strong customer support in NZ time zones. Prioritize based on your specific business model and pain points.

Yes, modern accounting software significantly simplifies IRD tax filing for NZ businesses. Most platforms offer GST return preparation with automatic calculations and online filing directly to IRD through their gateway services. Features include automatic GST calculation on all transactions, digital GST return forms pre-populated with your data, electronic filing to IRD (for GST registered businesses), provisional tax calculation assistance, and integration with myIR for seamless communication. While software handles GST returns well, other tax obligations like income tax returns typically still require an accountant's input, though your accounting software provides the necessary financial data.

Absolutely! Sole traders and freelancers benefit greatly from accounting software, even simple entry-level plans. Solutions like Xero Starter ($25/month), QuickBooks Simple Start ($30/month), or FreshBooks Lite ($19/month) are specifically designed for solo operators. Benefits include professional invoice creation, expense tracking via mobile apps, GST compliance and reporting, bank reconciliation, financial reporting for tax time, and time saved compared to spreadsheets. For freelancers earning over $60,000/year or registered for GST, accounting software typically pays for itself through time savings, reduced accountant fees, and improved cash flow from faster invoicing and payment tracking.

Reputable cloud accounting software providers offer enterprise-level security that typically exceeds what most small businesses could implement themselves. Security features include 256-bit SSL encryption for data transmission, bank-level encryption for stored data, multi-factor authentication (MFA), regular automatic backups, SOC 2 Type II and ISO 27001 certifications, data centers with physical security, user access controls and audit trails, and compliance with Privacy Act requirements. Providers like Xero, MYOB, and QuickBooks invest millions in security infrastructure. For NZ businesses, check that providers offer Australian or NZ data hosting for added compliance and performance benefits.

Yes, but inventory capabilities vary significantly between providers. MYOB offers the strongest inventory features with advanced stock control, multiple warehouses, serial number tracking, and automated reordering. Xero Standard and Premium include basic to advanced inventory tracking with stock levels, COGS calculation, and purchase order management. QuickBooks Plus includes good inventory features suitable for most retailers. For advanced needs like manufacturing or complex warehousing, you may need specialized inventory software (like Unleashed, Cin7, or TradeGecko) that integrates with your accounting platform. E-commerce businesses should prioritize software with Shopify, WooCommerce, or Trade Me integration.

Yes, most NZ businesses still benefit from an accountant even with accounting software. While software handles day-to-day bookkeeping, accountants provide valuable services including annual financial statement preparation, tax strategy and planning, compliance advice for complex situations, business financial advice and forecasting, audit support, and complex transaction handling. Modern accounting software actually makes accountants more efficient - they can access your data in real-time (most charge less for 'clean' books), focus on strategic advice rather than data entry, and provide faster insights. Expect to save 30-50% on accounting fees with good software, while still retaining professional expertise for year-end and strategic matters.

Data retention policies vary by provider, but most follow similar practices. Typically, when you stop paying: 1) You immediately lose the ability to create new transactions but retain read-only access for 30-90 days, 2) You can export your data during this grace period (usually to CSV, Excel, or PDF formats), 3) After the grace period (typically 90 days to 12 months), accounts are archived, 4) Some providers maintain archived data for 7 years (matching NZ tax record requirements), while others delete after 12-24 months. Best practice: Always maintain local backups by regularly exporting data. Most providers offer easy export tools. Before canceling, export all transactions, reports, contacts, and invoices. For critical business data, don't rely solely on the provider's retention policies.