Accounting software designed for small businesses is low-cost and easy to use. The right package will save you time on routine bookkeeping, improve control of your cash flow and make it easier to file tax returns
Here’s our quick guide to what to look for in small business accounting software, and our review of the UK’s most popular accounting software packages to help you choose what’s best for your business.
Best for freelancers
Best for ease of use
Your accounting software needs
The first step to choosing the right accounting software is to understand what your needs are, so that you can assess what different solutions offer.
- Any of the leading packages will make it easier to automate routine bookkeeping tasks and prepare for your accounts. Accounting software providers are continually developing new, clever features like automated bank reconciliation and the ability to scan expenses receipts.
- Make sure you know what sort of tax functionality you require - for income or corporation tax returns, VAT and payroll (PAYE). With the HMRC rollout of Making Tax Digital (MTD), being able to file returns online is essential.
- The larger your business, the more likely it is that you will want sophisticted management reporting features and software that allows multiple users.
Other practical considerations include how easy the software is to set up and use, integration with your other systems and cost. It's worth asking your accountants which software they recommend to make it easy to share financial information with them.
Probably the most widely-used accounting software for sole traders and very small businesses, QuickBooks is a strong all-rounder.
Typically £20 per month | Good all-round features including pay-enabled invoices | Go to website
- send ‘pay-enabled’ invoices, making it easier for customers to pay
- links with almost all leading UK banks, plus PayPal, Payoneer and Wise
- business mileage tracking feature
- low-cost starter plan lacks features – but can be a good option for sole traders who aren’t registered for VAT
- limited range of optional features, but a wide range of add-on apps are available in the QuickBooks app store
- £12-£30 monthly
Find out more about QuickBooks small business accounting software.
Xero’s popular online accounting software covers all the basics, and offers some great time-saving tools.
- take photos or scan bills and receipts to automatically extract data
- intelligent transaction-matching helps with bank reconciliation
- large marketplace of apps you can connect to add extra functionality
- basic starter plan is restricted to very limited numbers of monthly invoices and purchases
- cannot yet automatically link with bank accounts at several UK banks
- cash flow forecasting beyond one month ahead is an optional extra
- monthly plans £10-£30 (plus VAT) per month
- add-ons like payroll or project tracking typically £5 per month
Find out more about Xero online accounting software for small businesses.
With a focus on easy invoicing, FreshBooks is a good choice for freelancers and small businesses who want to impress their clients – and get paid quickly.
Best for freelancers:
Typically £19 per month | Powerful proposals, invoicing and project management | Go to website
- produce estimates and proposals from within FreshBooks using built-in tools
- invoice generator for creating customised, professional-looking invoices – with option to build in direct debit or credit card payments
- time-tracking and project management features
- entry-level plan limited to five clients and excludes automated bank reconciliation and accountant access
- lacks features for businesses selling physical products (eg manufacturers and retailers) or contractors/subcontractors using the Construction Industry Scheme (CIS)
- £11-£30 per month
- higher cost, customised ‘Select’ package available with advanced payments and other features
Get more information on FreshBooks invoice and accounting software for small businesses.
With a long-established track record and reputation, particularly for larger businesses, Sage was a little slower than some other providers in offering user-friendly, online accounting software for smaller businesses but now has a solid offering.
- above average reporting tools and dashboards
- good range of bank connections with efficient transaction matching
- clear upgrade path to more sophisticated packages for larger businesses
- receipts auto-entry is an optional (paid) extra
- quotes and estimates only included in more expensive ‘Plus’ package
- £12-£36 per month
- Auto-entry from £9 per month Read more about Sage online accounting software for small businesses.
Read more about Sage online accounting software for small businesses.
Award-winning software now owned by the NatWest Group.
- high quality, user-friendly design and quick access to a financial overview of the business with the FreeAgent dashboard
- payroll included at no extra cost
- free for customers with a business account with NatWest, Royal Bank of Scotland or Ulster Bank
- ease of use comes at the cost of slightly restricted functionality
- entry-level package relatively expensive
- £19-£29 per month, or £190-£290 per year for annual subscriptions
- free for NatWest, RBS and Ulster Bank business account customers
Find out more about FreeAgent simple accounting software for UK small businesses.
Designed for ease of use, and with plenty of support on offer, Clear Books can be an excellent choice for business owners who want accounting to be as easy as possible.
Best for ease of use:
Typically £24 per month | Excellent support and solid all-round features | Go to website
- good all-round features, even on entry level package
- strong support through online guides and videos, plus free email/phone helplines
- optional payroll software can become expensive with more employees
- £12 per month for non-VAT businesses, £24 per month for VAT and multi-currency functionality
- discounts for yearly subscriptions and for Metro Bank and Revolut Business customers
- £2.70 per employee for optional payroll
Find out more about Clear Books small business online accounting software.
Accounting software providers may introduce new features or change their prices at any time, so it’s worth checking the latest information before making a decision. The pricing details in this guide do not include VAT or any introductory discounts or free trials.