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
**Note Prices/fees correct on 10/10/23 (limited time offers may be available)
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 all-rounder accounting software
QuickBooks | Typically £24 per month | Good all-round features including pay-enabled invoices
Best accounting software for ease of use
Clear Books | £13 - £34 per month | Excellent support and solid all-round features
Best accounting software for banking
Tide | £10 per month | Simple bookkeeping and accounting, linked with your business bank account
Best accounting software for freelancers
FreshBooks | Typically £22 per month | Powerful proposals, invoicing and project management
Best accounting software for services
Crunch | Typically £24.50 - £79.50 per month | Competitive packages combine software with accounting and tax services
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 expense receipts.
- Make sure you know what sort of tax functionality you require - for income or corporation tax returns, VAT and payroll (PAYE). Making Tax Digital (MTD) makes the ability to file returns online essential.
- The larger your business, the more likely it is that you will want sophisticated 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 so that it is easy to share financial information with them.
Find out more about these popular accounting software packages:
Probably the most widely-used accounting software for sole traders and very small businesses, QuickBooks is a strong all-rounder.
Best all-rounder accounting software:
Typically £24 per month | Good all-round features including pay-enabled invoices
- 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
- self employed package £10 per month
- business packages £14 - £70 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
- cash flow forecasting beyond one month ahead is an optional extra
- monthly plans £15 - £55 (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 accounting software for freelancers:
Typically £22 per month | Powerful proposals, invoicing and project management
- 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)
- £12 - £35 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 not included in entry-level package
- two months free, then £14 - £36 per month
- Auto-entry from £12 per month
Read more about Sage online accounting software for small businesses.
Unlike other providers, Crunch offers both software and accounting services. That can be an ideal solution, particularly for businesses that don’t have an accountant or aren’t happy with the service they currently get.
Best accounting software for services:
Typically £25.50 - £83.50 per month | Competitive packages combine software with accounting and tax services
- accountancy and tax support as well as accounting software
- range of packages to suit start-ups, sole traders and limited companies
- competitive pricing compared to standalone accountancy services
- software not as fully-featured as more advanced competitors
- won’t suit businesses that want face-to-face service from a local accountant
- free starter package (limited functionality)
- £25.50 per month sole trader package
- £83.50 - £127.50 per month packages for limited companies
- from £159.50 per month for ecommerce and growing businesses
- extra (paid-for) options include bookkeeping, payroll and pensions auto-enrolment
Read more about Crunch online accounting for small businesses.
Simple bookkeeping and accounting, linked with your business bank account.
Best for banking:
£10 per month | Simple bookkeeping and accounting, linked with your business bank account
- simplifies all-round bookkeeping, financial management and tax return preparation
- personalised invoices with payment links
- Connect your existing business bank account or open a Tide business account
- lacks the sophisticated features of more advanced packages
- £10 per month
Find out more about Tide.
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
- direct self assessment filing with HMRC
- 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 per month (sole trader) or then £29 per month (limited company)
- free for NatWest, RBS, Ulster Bank and Mettle 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 accounting software for ease of use:
Typically £28 per month | Excellent support and solid all-round features
- 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
- from £13 - £34 per month
- discounts for yearly subscriptions
- £5.40 per employee for optional payroll
Find out more about Clear Books small business online accounting software.
Powerful software used by ambitious businesses that want sophisticated financial management.
- feature-loaded Enterprise Resource Planning (ERP) software
- integration across NetSuite software for order and inventory management, CRM and ecommerce
- high cost and complexity; too much for most businesses
- From around $1,000 per month
Find out more about NetSuite.
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.
Common accounting software questions
- Do I need business accounting software?
- What are the benefits of using business accounting software?
- How much will accounting software cost?
- Is online accounting software secure?
- How can I check my accounting software HMRC-compliant?
1. Do I need business accounting software?
All businesses are legally required to keep accurate financial records. While you can keep manual accounts, you will probably benefit from using accounting software. It eliminates repetitive data entry, can be accessed anytime, anywhere and can be more secure.
2. What are the benefits of using business accounting software?
Accounting software offers several benefits over manual accounts:
- it eliminates repetitive data entry
- it automatically does all the calculations, eliminating the risk of errors
- it is more flexible - the information can be accessed securely wherever and whenever you (or your staff) need access
- you get real-time access to up-to-date financial information
- you can share access with your accountant, improving communication and saving time
Read our guide to using accounting software.
3. How much will accounting software cost?
Accounting software can cost as little as £10 per month but can cost a great deal more - depending on the functionality you require.
You should factor in any additional costs and compare initial lower monthly costs with annual fees.
Ask yourself these questions before you buy:
- Will expensive training be required to use the software?
- Do you have to pay for additional licenses for extra users?
- Does the software have the capacity to grow with your business?
- Can you upgrade the accounting software if required?
- Is it easy to transfer your data to a new system should you need to switch?
- Is the software compatible with your accountant's software?
- Can you easily cancel a long-term contract if your circumstances change?
Online accounting software helps limit upfront costs. Most online services do not tie you to a minimum contract either, so you can always cancel if it's not right for you. It is also easier to scale up as your business grows. You simply pay for the additional licenses as you need them.
What's more, the monthly fee usually includes all updates and upgrades - unlike traditional software where you may be forced to pay again when a newer version is released.
However, that doesn't mean online accounting software always cheaper in the long run.
Read our guide to choosing accounting software.
4. Is online accounting software secure?
When choosing an online accounting software provider, you should do your homework. Take the same security precautions you would for any cloud computing service.
Make sure your chosen online accounting software has a good track record of keeping data safe. Check online reviews as this will quickly reveal any potential issues.
Reputable suppliers should ensure that data is securely protected, and offer a very high level of online availability. If you have any doubts, check where and how your data will be stored and what arrangements are in place to protect it. You may also want to find out what options you have for exporting or backing up copies of your data.
It's worth comparing the risks of online accounting software with those of running software in-house. For instance, a fire, flood or server crash could cause serious disruption and employees can compromise your data deliberately or inadvertently. Generally speaking, using online accounting software will actually reduce the risks.
5. How can I check my accounting software HMRC-compliant?
Any accounting system you use must meet your legal obligations to hold records correctly. If you are registered for VAT, make sure that HMRC will accept forms and returns from your preferred business accounting software by finding software that is compatible with Making Tax Digital for VAT.