Guide: best accounting software for your business


Guide: best accounting software for your businessEvery sole trader, micro-business and small firm will need to use accounting software once Making Tax Digital arrives. Here's our guide to some of the top packages

Choosing accounting software can be daunting. It's important to find a solution that's the right fit for you and your business; it must have the features you need right now and be able to support you as your business grows and as tax self-assessment rules change.

Our guide to ten of the most popular accounting packages allows you to compare features, functionality and prices, all in one place. Key features you need to consider include VAT returns, PAYE and payroll solutions.

In time, Making Tax Digital is likely to apply to almost all freelancers and small businesses - even if you only need a simple spreadsheet, you'll eventually need a software-based accounting solution. The good news is that accounting software can save a lot of time and could even reduce the fees you have to pay to your business accountant.

No head for accounts?No head for accounts?

Is doing your books a task you'd rather avoid? Take the pain away with this free guide, packed with simple tips to help you save money, time and stress.

Find out more

Clear Books Large

Aimed at: SMEs; accountants and bookkeepers supporting SMEs.

Key features & USPs: CIS; fixed asset accounting; dividend calculation and distribution; project accounting; quotations and invoicing; stock lists and pricing; multi-currency; free email and telephone support.

Free trial? Yes.

VAT capabilities? Yes. Full VAT accounting, VAT return production and online submission to HMRC.

Works with multiple currencies? Yes.

Links to bank accounts? Yes, via CSV import or via third party product (Yodlee) provided free with Clear Books subscription.

Handles payroll? Via separate product.

Stock management? Can manage stock lists and selling/buying prices. No stock levels.

Mobile version? Quotation and invoicing app in development.

Any limit on number of users? No.

Costs: from £10.75 per month. Higher charges apply after three months.

Clear Books Micro

Aimed at: SMEs and micro-businesses.

Key features & USPs: Simple spreadsheet-based accounting data entry for micro-businesses; integrates with Clear Books Practice Edition, used by accountants to submit VAT returns and Making Tax Digital returns online; free email and telephone support.

Free trial? Yes.

VAT capabilities? Yes. Recording of VAT on sales and purchases.

Works with multiple currencies? No.

Links to bank accounts? No.

Handles payroll? No.

Stock management? No.

Mobile version? No.

Any limit on number of users? No.

Costs: Monthly from £5.00 for the small business plan. Higher charges apply after three months. 

FreeAgent

Aimed at: Freelancers, contractors and micro-businesses.

Key features & USPs: VAT filing; RTI-compliant payroll; overview screen bringing together invoices, expenses, bank accounts and cash flow tracking; Tax Timeline enabling users to see upcoming dates for self-assessment, VAT, corporation tax and payroll; powerful double-entry accounting engine; self-assessment filing for sole traders and limited company directors; free UK-based telephone and email support.

Free trial? Yes (30-day).

VAT capabilities? Yes.

Works with multiple currencies? Yes.

Links to bank accounts? Yes.

Handles payroll? Yes.

Stock management? Yes.

Mobile version? Yes (iOS and Android).

Any limit on number of users? No.

Costs: Monthly from £9.50 for sole traders; £12.00 for partnership/LLP; £14.50 for limited companies. Higher prices apply after the first six months.

FreshBooks

Aimed at: Service-based self-employed professionals and their teams.

Key features & USPs: Invoicing; expenses; time tracking; simple and intuitive accounting software for self-employed professionals and their teams; free support.

Free trial? Yes (30-day).

VAT capabilities? Yes.

Works with multiple currencies? Yes.

Links to bank accounts? Yes.

Handles payroll? No, but integrates with payroll solutions such as Gusto.

Stock management? No.

Mobile version? Yes, for iPhone, iPad and Android.

Any limit on number of users? No.

Costs: Starts at $15 per month for the Lite package increasing to $50 for the Premium package.

KashFlow

Aimed at: Sole traders and small businesses with up to 20 employees.

Key features & USPs: Cloud-based; intuitive interface; partners with WorldPay, GoCardless and others; flexible packages; bookkeeping; payroll; HR; compliant with HMRC.

Free trial? Yes (up to four months free).

VAT capabilities? Yes, KashFlow files your VAT returns and EC Sales list directly to HMRC. You can also change VAT rates, automatically add tax to your invoices if you’re VAT registered, and download historic VAT payments.

Works with multiple currencies? Yes.

Links to bank accounts? Yes.

Handles payroll? Yes, KashFlow Payroll offers full payroll functions including payslips and RTI submissions.

Stock management? Yes.

Mobile version? Yes, all software is cloud-based so you can access it on any device; there’s also the KashFlow Go app.

Any limit on number of users? The Starter plan is limited to a single user. All other plans are multi-user.

Costs: Monthly from £8.00 for the Starter plan, £15.00 for the Business plan, £21.00 for the Business plan and Payroll.

QuickBooks

Aimed at: Small businesses and the self-employed.

Key features & USPs: Tracks income and manages self-assessment for sole traders; invoicing; receipts; downloads bank transactions; payroll; manages CIS deductions; bills and payments.

Free trial? Yes (30-day).

VAT capabilities? Yes.

Works with multiple currencies? Yes.

Links to bank accounts? Yes.

Handles payroll? Yes.

Stock management? Yes.

Mobile version? Yes.

Any limit on number of users? From one to five, depending on package.

Costs: Self-employed from £2.00 a month; Essentials from £6.00 per month; Plus from £10 per month. Charges increase after six months.

Sage One

Aimed at: Entrepreneurs, start-ups and small businesses.

Key features: Free 24/7 telephone and email support 365 days a year; users can choose to take Payroll without an Accounting subscription.

Free trial? Yes (30-day, exclusive to Donut site users).

VAT capabilities? Yes, you can securely submit the VAT 100 form electronically directly to HMRC.

Works with multiple currencies? Yes (although currently does not support multi-currency bank accounts).

Links to bank accounts? Yes. Sage One offers Automated Bank Feeds via a third party (Yodlee) as well as Direct Bank Feeds with RBS, Nat West and Cashplus; more banks coming on board over the coming months.

Handles payroll? Yes, for up to 25 employees, including RTI and auto-enrolment compliance.

Stock management? Yes.

Mobile version? Yes. Sage Expenses and Invoices apps are free for IOS and Android.

Any limit on number of users? Sage One Start is for single users; Sage One Accounting is unlimited multi-user.

Costs: Monthly from £5.00 for Sage One Start; £11.00 for Sage One Accounting; Sage One Payroll: from £3.00 for up to five employees (higher prices apply for additional employees).

Wave

Aimed at: Micro-businesses and SME owners; freelancers; entrepreneurs; contractors.

Key features & USPs: Accounting; receipt scanning; personal finance; invoicing (including automatic reminders, recurring invoices and automatic billing); easy to use with natural workflows and less jargon.

Free trial? Accounting software, invoicing and receipt scanning is free. Online payments are charged per transaction and start from 1.4% + 20p.

VAT capabilities? Yes.

Works with multiple currencies? Yes.

Links to bank accounts? Yes.

Payroll? Not in UK.

Stock management? No.

Mobile version? Wave has mobile apps (iOS and Android) for invoicing and receipt scanning.

Any limit on number of users? No.

Costs: Free for invoicing, accounting, receipt scanning and personal finance. Fees for credit card processing.

Xero

Aimed at: Small business owners and their accountants.

Key features & USPs: Direct bank feeds; easy invoicing, expenses, stock control and bill paying; you can submit VAT and payroll to HMRC online directly; payroll; easy to use dashboard to see how your business is doing; mobile apps for invoicing, expenses and bank transactions; updates and new features released every three to six weeks; unlimited user access.

Free trial? Yes.

VAT capabilities? Yes. Xero calculates your VAT and lets you file VAT returns online directly.

Works with multiple currencies? Premium plan only.

Links to bank accounts? Yes.

Handles payroll? Yes. Three months free and then £5 per month for up to five employees and £1 for each additional employee. Stock management? Yes.

Mobile version? Yes.

Any limit on number of users? No.

Costs: Monthly currently £10 for the Starter plan, £22 for the Standard plan and £27.50 for the Premium plan.

Zoho Books

Aimed at: SMEs and freelancers.

Key features & USPs: Double entry accounting software with financial reports including profit & loss, balance sheet and cash flow statement; business transactions including quotes, invoices, bills, expenses, credit and debit notes, recurring invoices, PO, SO and more; project billing and time tracking for service-based businesses; automation and customisation capabilities; integrates with Zoho apps including Zoho CRM, Zoho Projects, Zoho Expense, Zoho Inventory, Zoho Subscriptions and Zoho People.

Free trial? Yes (14-day).

VAT capabilities? Yes. UK businesses can collect and record VAT on transactions and produce VAT reports including VAT MOSS for EU transactions and allows you to enable the flat-rate VAT option.

Works with multiple currencies? Yes.

Links to bank accounts? Yes.

Handles payroll? No.

Stock management? Yes.

Mobile version? Available on iOS, Android and Windows; native apps for Apple Watch and iPad.

Any limit on number of users? Pricing plans are based on user numbers. Basic supports two users; Standard supports three; Professional supports ten users.

Costs: Monthly from £6.00 for the Basic plan; £12.00 for the Standard plan; £18.00 for the Professional plan. Annual plans cost £60, £120 and £180 respectively.

Dod-dle

Aimed at: SMEs and freelancers.

Key features & USPs: Dod-dle's simplicity is its main USP. However, it also offers automatic calculation of CIS tax, pre-set expense categories and lots of other features, such as the ability to upload a photograph of an expense invoice directly from your smartphone, printing of simple sales invoices and no restriction on the number of users.

Free trial? Yes.

VAT capabilities? Coming soon.

Works with multiple currencies? No.

Links to bank accounts? No.

Handles payroll? No.

Stock management? No.

Mobile version? Yes.

Any limit on number of users? No.

Costs: Monthly currently £10.00 for "dod-dle cash" and £20.00 for "dod-dle". Free version coming soon.

What does the * mean?

If a link has a * this means it is an affiliate link. To find out more, see our FAQs.