How to Setup Accounting Software in Australia (Xero, MYOB, QuickBooks)

Your Startup Resource to Setting Up Your Accounting Software

Every founder hits a moment when their financial reality needs more than good intentions and a spreadsheet. You can hustle, sell, and build momentum — but if you can’t see your numbers clearly, you’re guessing. And guessing is a luxury no growing business can afford.

That’s where accounting software changes everything.

It’s not just a tool. It’s your financial nerve centre — the place where your cash flow, invoices, payroll, GST, and tax obligations speak the same language. When it’s set up well, you feel in control. When it’s set up poorly, you spend hours fixing what should never have broken.

I’ve seen founders wait until a BAS deadline or tax lodgement forces them into panic mode. By then, transactions are missing, GST is wrong, payroll doesn't match the ATO (Australian Taxation Office), and the “quick fix” turns into a costly clean-up.

Setting up your accounting software properly from day one isn’t just smart — it’s one of the simplest ways to protect your business, reduce stress, and make confident financial decisions.

This guide walks you through exactly how to set up accounting software in Australia — without overwhelm, jargon, or assumptions that you already know what you’re doing.

What Is Accounting Software and Why It Matters

Accounting software is a digital system that records, tracks, and organises your business finances automatically. It removes the manual data entry found in spreadsheets and replaces it with live financial information.

Most Australian businesses use platforms like Xero, MYOB, QuickBooks, or Reckon because they are ATO-compliant and integrate with tools you may already use (eCommerce, payments, payroll, or POS).

Common features include:

• Bank feeds: Your transactions flow into the system automatically

• Invoicing: Send branded invoices and manage payments

• GST tracking: Code income and expenses correctly for BAS

• Payroll + STP: Pay staff and submit Single Touch Payroll to the ATO

• Reporting: Cash flow, profit & loss, balance sheet

• Receipts: Upload or photograph receipts for easy record-keeping

Put simply:Good software replaces guesswork with clarity.

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Why Setting up Accounting Software Right Matters

Setting up your software correctly isn’t the same as “just getting it working.” Proper setup affects:

Compliance

GST errors, incorrect BAS reporting, or payroll mistakes can trigger penalties.

Time

Automation saves hours of reconciliation and admin each month.

Visibility

You can see exactly what’s happening in your business — not just what you think is happening.

Better decision-making

When your numbers are clean, you can confidently plan for hiring, pricing, inventory, and growth.

Growth readiness

As your business scales, your system scales with you.

Real talk:Your accounting software isn’t for your accountant — it’s for you, the founder. It’s your scoreboard.

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What You Need Before You Start

Gather these before signing up:

• Your ABN (Australian Business Number)

  
  

• Business structure (sole trader, company, partnership, trust)

  
  

• A dedicated business bank account

  
  

• Any past financial data (spreadsheets, invoices, receipts)

  
  

• Your chart of accounts(This is a list of categories — e.g., sales, subscriptions, travel — your software uses to organise transactions.)

  
  

• Decision: DIY or accountant/bookkeeper support?

Mentor Tip:

If you want long-term financial stability, match your accounting software with what your accountant uses. It reduces friction and saves hours every year.

How to Setup Accounting Software in Australia:

Step-by-Step

Step 1: Choose the Right Software

Your choice depends on your business model, integrations, and future plans.

Compare these common platforms:

Platform	Best For	Why People Choose It
Xero	Startups, growing SMEs	Clean interface, best app ecosystem, advisor friendly
MYOB	Payroll-heavy businesses	Strong local compliance, good for complex payroll
QuickBooks	Service-based	Easy invoicing + mileage tracking
Reckon	Lean budgets	Simple and affordable

Consider:

• Do you need payroll?

• Do you sell online? (Check Shopify or WooCommerce integrations.)

• Do you need job costing, projects, time tracking, or inventory?

• Does your accountant prefer a specific system?

Outcome:

You select software that fits your model today and supports where you want the business to go.

Step 2: Set Up Your Account

Once you’ve signed up:

• Enter your business name

• Add your ABN

• Select your financial year start (Australia uses 1 July–30 June)

• Choose cash or accrual accounting

  • Cash basis: You recognise income/expenses when money moves

  • Accrual basis: You recognise income/expenses when invoices are issued

Most early-stage businesses use cash basis.

• Choose or customise your chart of accounts

Outcome:

Your accounting file is matched to Australian tax rules and your business model.

Step 3: Connect Your Bank Feeds

This step saves you hours every week.

• Link your business bank accounts

• Link credit cards

• Link payment platforms (Stripe, PayPal, Square)

• Enable automatic transaction import

Then set up bank rules for recurring transactions, e.g.:

• Stripe fees

• Software subscriptions

• Loan repayments

• Merchant fees

Bank feeds remove manual entry, reduce errors, and keep your cash flow accurate.

Step 4: Set Up Invoicing and Payments

Brand your invoices and get paid faster:

• Add logo, brand colours, payment terms

• Enable online card payments (Stripe, PayPal)

• Set automated reminders for overdue invoices

• Save common items/products

• Add tracking categories (projects, locations, departments)

Outcome:

You get paid sooner — without chasing invoices manually.

Step 5: Configure GST & BAS (ATO-Ready)

This part needs to be done correctly to avoid BAS errors.

• Confirm your GST registration

• Select your BAS frequency (monthly or quarterly)

• Choose cash vs accrual reporting

• Apply correct GST tax codes to sales and expense categories

• Run a test BAS in the software to confirm everything matches

Your software now becomes your central tool for BAS preparation.

Step 6: Enable Payroll & STP (If Employing)

Australia requires all employers to use STP (Single Touch Payroll), where payroll information is sent to the ATO every pay run.

In your software:

• Add employees

• Add their TFN (Tax File Number) declarations

• Set up their superannuation fund

• Configure pay items (ordinary hours, overtime, allowances)

• Set up leave rules (annual, personal/carer’s, long service)

• Activate STP

• Run a test pay event

Outcome:

Your payroll is ATO-compliant, on time, and accurate.

Step 7: Import / Migrate Past Data (Optional)

If you have previous records:

• Import invoices, bills, and receipts

• Upload CSV bank statements

• Bring over opening balances

• Map your old categories to your new chart of accounts

If your data is messy or you’re switching from another system, ask a bookkeeper or accountant to help. It's faster and prevents errors.

Xero Setup Steps (Australia)

1. Create org: Business name, ABN, financial year, GST settings

2. Chart of accounts: Start with a template; add industry accounts (COGS, merchant fees)

3. Bank feeds: Connect accounts; set bank rules; reconcile daily

4. Invoices: Brand your template; enable Stripe/PayPal; set reminders

5. GST & BAS: Select cash/accrual; verify BAS period; review Activity Statement

6. Payroll/STP: Employees, pay items, super, leave; enable STP; test a pay run

7. Apps: Add Dext/Hubdoc (receipts), ApprovalMax (approvals), Float/Fathom (forecasting)

Configure GST & BAS (Checklist)

•  Confirm GST registration and BAS frequency

•  Set default GST codes on accounts and items

•  Choose cash vs accrual for BAS alignment

•  Enable rounding and check tax-exclusive vs inclusive defaults

•  Run a draft BAS to validate mappings and figures

Payroll Software Australia: STP Setup

•  Add employees & TFN details

•  Create pay items (ordinary time, allowances, deductions)

•  Set superannuation funds and rates

•  Configure leave and award entitlements (if applicable)

•  Connect STP and lodge a test/event

•  Lock payroll calendars & user permissions

Best Accounting Software for Small Business

(Quick Comparison)

Platform	Best For	Standout Features	App Ecosystem	Pricing (AUD)
Xero	Startups/SMEs, advisors’ favourite	Bank rules, Projects, superior app marketplace	Excellent (Dext, ApprovalMax, Float, Fathom)	$32–$85/mo
MYOB	Payroll-heavy, local compliance	STP, inventory, jobs	Good (native + 3rd party)	$30–$100/mo
Quick Books	Service-based SMEs	Easy invoicing, mileage, reports	Good	$25–$70/mo
Reckon	Budget-conscious, simple needs	Core accounting, BAS	Limited	$12–$45/mo

Tip: Match your industry, required integrations (e.g., Shopify, Cin7, Vend/Lightspeed), and your advisor’s certification (Xero/MYOB partner).

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Common Mistakes Business Owners Make

Skipping setup and using spreadsheets

Manual systems break fast. You're flying blind without live data.

Choosing the wrong software

Cheap now can mean expensive fixes later. Get the right tool from the start.

Not setting up GST/BAS correctly

Incorrect settings = reporting errors and ATO penalties. 

Ignoring payroll ruleIf you have employees, STP isn’t optional. Fines apply for non-compliance.

No backup or access control

Not everyone on your team should have full access. Set roles and keep data secure.

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What to Do Right Now

✅ Speak to your Accountant about which software they suggest / recommend.

✅ Just starting? Get the StartUp Deck — Inside you’ll find real-world templates, tactical videos, expanded frameworks, and bonus tools we’ve used to build, scale, and exit real businesses [thestartupdeck.com].

✅ Want it done for you? Book a consult with [Noize.com.au] and set your payment terms up the right way.

FAQs

Do I need accounting software as a sole trader?

If you want to stay compliant and save time at tax time, yes. Even simple plans work.

Which is better: Xero or MYOB?

It depends on your industry, features, and integrations. Xero is popular for startups due to ecosystem; MYOB suits payroll-heavy use cases.

Can I do this myself or should I hire someone?

You can do the basics, but a certified bookkeeper can configure GST/BAS, bank rules, and STP correctly to avoid errors and penalties.

What if I already use spreadsheets?

You can import your data. Upgrading sooner reduces admin and improves accuracy immediately.

Does accounting software track GST?

Yes. Most platforms track GST on income/expenses and generate BAS reports.