The best accounting software for small businesses 2024

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QuickBooks – best overall accounting software

4.7

Try QuickBooks

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Xero – perfect for hospitality businesses

4.6

Try Xero

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Clear Books – great software for stores and shops

4.2

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Our expert research team has found that QuickBooks is the best overall small business accounting software for 2024. It’s an affordable option for SMEs, with regular deals and discounts, plus first-class tax and forecasting features for simplified cash flow management.

But in today’s tight economy, you don’t want to be stuck in the wrong, potentially years-long, software contract. Migrating financial data is also a huge undertaking for busy entrepreneurs. It’s best to be certain about a brand before you invest precious time and money.

For a quick overview of the best-performing brands available on the market (including their cost and top features) use our handy 🔍accounting software deals finder. Or, read on for a longer, detailed breakdown of the results of our extensive research and user testing.

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BEST OVERALL
QuickBooks	Xero	Clear Books	Zoho Books	FreshBooks
Price From £10 per month 90% off for 7 months	Price From £16 per month (excl. VAT) 75% off for 6 months	Price From £13.50/mo £6.75/mo *first 3 months (excl. VAT)	Price From Free, or £10 per month (excl. VAT)	Price From £15 per month
Rating 4.7	Rating 4.6	Rating 4.2	Rating 4.0	Rating 4.0
Free Trial	Free Trial	Free Trial	Free Trial	Free Trial
Visit Quickbooks	Visit Xero	Compare Deals	Compare Deals	Compare Deals

1.🥇 QuickBooks: best for forecasting cash flow

Quickbooks allows users to track and review cash flow over several months to create a future forecast. Image source: quickbooks.intuit.com

QuickBooks came out top in our testing for two key reasons. Firstly, it’s affordable. The platform’s cheapest tier costs £10 per month, per user, and QuickBooks offers regular deals and discounts for entrepreneurs; a vital perk in today’s cost of living crisis. You can currently purchase a QuickBooks plan for 90% off for 7 months.

As part of your subscription, you’ll also get an extensive feature offering that answers small business owners’ big software concerns. There’s live chat support if you run into trouble, an intuitive mobile app for on-the-go expense tracking, plus integrations with over 700 apps.

Crucially, however, QuickBooks was one of only three platforms we tested that permits cash flow forecasting on its cheapest plan. Cash flow forecasting involves estimating your future sales and expenses. It’s a must-have if you plan on adopting a lean business model to save on costs (as almost every company today does).

What are QuickBooks’ drawbacks?

QuickBooks is an excellent, broad option. However, businesses based in certain industries might want to prioritise more specialist features. For example, retailers will want to make use of inventory management tools to track stock levels and sales targets.

QuickBooks does not offer either budget planning features nor inventory management on its two cheapest paid-for tiers. Brands requiring these features, such as project management teams, will find rival software, FreshBooks, more suitable as it offers both functions in its cheapest package at £15 per month.

QuickBooks’ pricing

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	BEST VALUE
Plan Self Employed	Plan Simple Start	Plan Essentials	Plan Plus	Plan Advanced
Cost £10 per month (excl. VAT) 90% off for 7 months	Cost £14 per month (excl. VAT) 90% off for 7 months	Cost £28 per month (excl. VAT) 90% off for 7 months	Cost £38 per month (excl. VAT) 90% off for 7 months	Cost £90 per month (excl. VAT) 90% off for 7 months

QuickBooks is one of the few accounting software providers to offer a dedicated Self Employed plan (costing £10 per user, per month), which has all the core functions for an individual just starting out. However, this tier is almost exclusively designed for submitting a self-assessment tax return, and SMEs will find it severely limiting.

Small businesses should instead begin with the QuickBooks Simple Start plan (£14 per user, per month). This adds income tax estimates, phone support, and pay-enabled invoices. For a full overview, check out our guide to QuickBooks’ pricing.

Who do we recommend Quickbooks for?

In truth, QuickBooks is a great all-around software, but it particularly excels at forecasting cash flow, a critical feature for firms in today’s economy. We’d recommend it to budget–minded businesses and startups just starting with financial planning.

2. Xero: best for hospitality businesses

The Xero dashboard gives you an at-a-glance view of your finances, invoices, and even business performance for informed budget planning. Image source: xero.com/uk

Xero stands out as a premier accounting software solution for pubs, restaurants, and bars. Unlike QuickBooks, its easy-to-use budget creator is available on every pricing tier, empowering users to create and manage budgets with ease. This is invaluable for hospitality businesses that often operate on tight margins and require meticulous planning.

Moreover, Xero excels in asset management. Its ability to record fixed assets on all plans is a big advantage, simplifying the tracking of valuable equipment that’s essential to the hospitality sector. For example, if you’re renting expensive fridge equipment or air conditioning units.

To streamline operations, Xero seamlessly integrates with leading hospitality point-of-sale (POS) systems such as Square, EPOS Now, and Lightspeed. This joined-up approach allows restaurant owners to sync their accounts; simpifying data entry and reduce errors.

What are Xero’s drawbacks?

Xero claims its support channels are open 24/7, but you’ll have a hard time getting advice from a human. Xero does not have a support phoneline or live chat (unlike QuickBooks). Instead, users must submit a query via an online webform, or rely on online guides and videos. Some disgruntled customers report waiting several hours for a response.

Xero is also missing some sophisticated accounting features, which may hinder users based in professional service sectors. Agencies, or those planning campaigns, will have to fork out for Xero’s most expensive plan to access its Project Budgeting features, for example.

Xero’s pricing

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Plan Ignite	Plan Grow	Plan Comprehensive	Plan Ultimate
Cost £16 per month (plus VAT) 75% off for 6 months	Cost £33 per month (plus VAT) 75% off for 6 months	Cost £47 per month (plus VAT) 75% off for 6 months	Cost £59 per month (plus VAT) 75% off for 6 months

Xero’s Ignite plan (£16 per user, per month) offers businesses access to top features, such as the ability to create invoices and quotes and reconcile bank transactions. Crucially, you’ll also be able to submit VAT returns to HMRC – which, in comparison, you can’t do on QuickBooks’ cheapest tier.

However, this plan does also come with some strict usage limits – you can only send 20 invoices and quotes, and enter five bills per month. Go above this, and you’ll need to start paying for the Grow plan (£33 per user, per month). It’s a steep increase, especially given that the Grow plan offers no other extra features.

Who do we recommend Xero for?

Pubs, restaurants, bars should install Xero. Unlike QuickBooks, every Xero plan offers a user-friendly budget creator. This is crucial in the hospitality industry, where margins are tight. Xero can also integrate with hospitality POS systems, minimising bookkeeping errors.

3. Clear Books: best for brick-and-mortar businesses

Clear Books’ simiplified layout gives brick-and-mortar businesses an easy, spreadsheet-style layout to input finances into. Image source: clearbooks.co.uk

Clear Books prioritises simplicity. Its intuitive design allows users to quickly and easily enter data, such as sales, purchases, and expenses, for bookkeeping that you don’t need a maths degree to understand. This is particularly beneficial for brick-and-mortar stores that need to handle a high volume of transactions.

Another feature we liked was the bank feed. With this feature, the software can connect with all major banks, automatically importing transactions that come into your business account. As well as ensuring accuracy, this also speeds up the fiddly process of bank reconciliation (comparing transactions and accounting records to check for discrepancies).

In fact, even on its cheapest plan, Clear Books boasts impressive functions instead of emulating Xero and gatekeeping them behind higher tiers. For instance, it provides an accounts payable functionality to help you keep track of what you owe vendors; handy for retailers or food store owners who take regular deliveries.

What are Clear Books’ drawbacks?

As you’d expect from a basic accounting tool, Clear Books is limited on advanced features. Its cheapest plan does not permit third-party integrations, or provide budgeting and cash flow tools, so scaling businesses might struggle to set growth and profits targets.

Another, less forgivable criticism of Clear Books – and what our expert researchers found themselves while testing the software – is that it tends to have a steeper learning curve compared to rivals.

Some users told us that it can take some time to get used to the software’s interface and functionality, which can be more complex than other options on the market. However, once you’ve got to grips with it, Clear Books proves to be a robust and effective accounting solution.

Clear Books’ pricing

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Plan Small	Plan Medium	Plan Large
Cost £13.50 per month (excl. VAT) 50% off for 3 months	Cost £29 per month (excl. VAT) 50% off for 3 months	Cost £36 per month (excl. VAT) 50% off for 3 months

At £13.50 per user, per month, Clear Books Small is a wallet-friendly package for small businesses. For brick-and-mortar firms that aren’t looking to expand, it will do nicely. However, scaling businesses might want to find an accounting software that’s more smartly paced when it comes to pricing.

Clear Books’ next tier up,  Clear Books Medium, jumps up to £29 per user, per month. It also doesn’t provide a convincing enough package compared to QuickBooks or Xero to justify the cost, with only a few added benefits (budgeting tools) on offer.

Who do we recommend Clear Books for?

4. Zoho Books: best for professional service teams

Zoho Books’ dashboard provides a transparent look at your project progress and budget for the entire team to view. Image source: zoho.com/uk

Unlike many competitors, Zoho Books offers robust project accounting features even on its entry-level plans. Our expert researchers found that Zoho Books makes it possible for you to oversee multiple projects, including the ability to assign specific tasks to employees.

This is superb for consultancy firms or agencies who bring multiple team members together to fulfil one project goal. Within the project, businesses can manage expenses, track the time an employee has spent working on specific client tasks, and calculate profitability for each completed campaign.

Furthermore, Zoho Books boasts an impressive suite of accounts receivable tools, even on its lowest-priced tier. Users have the ability to send up to 5,000 invoices annually to an unlimited number of clients, while the software’s integration with various payment processors empowers firms to offer clients flexible payment options.

Basically, Zoho Books makes it easy to manage projects and be paid on time, all without spending a fortune; a promise that professional firms would otherwise have had to pay a premium for.

What are the drawbacks of Zoho Books?

There are some important features that Zoho Books is missing from its library. It doesn’t have bank feeds, which means a member of your team will likely need to spend one day per month copying your bank statement into the platform (bagsy not us). It also only offers user support via email, which is marginally better than Xero’s contact form.

Zoho Books integrates well with the entire Zoho business product ecosystem, and its project tools will do the trick for very small professional service teams (Zoho Standard has a user cap of three). But if you’re a business with bigger aspirations, you will need to upgrade to the next payment tier up to access timesheets and manage retainers.

Zoho Books’ pricing

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Plan Free	Plan Standard	Plan Professional	Plan Premium
Cost Free	Cost £10 a month (excl. VAT)	Cost £20 per month (excl. VAT)	Cost £25 per month (excl. VAT)

After Zoho Books’ free plan, which we made our number one free accounting software pick, Zoho Standard costs £10+VAT per user, per month. It allows up to three users to track, reconcile, and budget with ease, from a smartphone or computer. You can stay on top of your projects and timesheets, and manage up to 5,000 invoices.

Zoho Professional costs double this amount (£20 per user, per month), caters to up to five users and adds more complex functions such as multi-currency handling. However, Standard is a perfectly acceptable option for SMEs with fewer than three employees who are willing to forego expensive features to save money in the meantime.

Who do we recommend Zoho Books for?

5. FreshBooks: best for service businesses selling add-ons

FreshBooks makes it simple to add new billable items to your inventory, and track them across invoices. Image source: freshbooks.com

FreshBooks is a fantastic accounting tool that stands out for its inventory tracking features. Unlike Zoho Books, Xero, QuickBooks, and Clear Books, FreshBooks includes inventory management in even its most basic package, so sellers can effortlessly monitor their stock levels and avoid those dreaded out-of-stock moments.

Naturally, retailers or dropshippers will want a specialist inventory tool for their product list. But FreshBooks is a smart option for anyone selling limited ‘run-on’ items, such as a hairdresser flogging shampoo with every sale. FreshBooks will even send an automated warning if a user tries to add too many items to an invoice.

It’s also super easy to connect your online store to FreshBooks, thanks to its in-built integrations with popular ecommerce builders. Whether you use Shopify, Squarespace, or BigCommerce, you can effortlessly sync your stock data – rather than keeping a note of it on your phone – to get an instant understanding of how each sale impacts your inventory.

What are the drawbacks of FreshBooks?

FreshBooks doesn’t offer tools that help you plan for the future, like budgeting or cash flow forecasts, so we don’t recommend it to companies with multiple departments, locations, or product lines that may need sophisticated financial support (QuickBooks is the best alternative).

It’s a good option for small, localised businesses. However, if you have a lot of clients – or you’re a startup hoping to take on a lot of new business this year – you’ll need to pay for the most expensive plan, as the FreshBooks Lite tier is limited to just five billable clients.

FreshBooks’ pricing

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50% OFF DEAL
Plan Lite	Plan Plus	Plan Premium
Cost £15 per month 50% off for 3 months	Cost £25 per month 50% off for 3 months	Cost £35 per month 50% off for 3 months

FreshBooks’ basic plan, Lite (£15 per user, per month), is one of the most generous we’ve come across… however, you’re limited to five billable clients only. Upgrading to Plus (£25 per user, per month) adds unlimited proposals, and allows you to automate recurring invoices and late payment reminders. It also extends your client limit to 50.

Adding extra team members costs £7 per person, per month – so we don’t recommend it for larger teams. FreshBooks’ more advanced payment features will also incur a fee of £15 per month. For a further breakdown, visit our guide to FreshBooks’ pricing.

Who do we recommend FreshBooks for?

Service businesses selling add-ons will get the most out of FreshBooks. FreshBooks boasts inventory management and integrates with popular ecommerce apps — though it is expensive for those with scaling client bases (its basic plan restricts you to five billable clients).

Buying guide: How to choose the right accounting software for your small business

Here’s an in-depth look at the key factors and features small businesses should consider when choosing accounting software:

1. Pricing: consider your budget and the scalability of the software as your business grows. Ensure the chosen plan aligns with your financial goals.

2. Bookkeeping capability: the core function of any accounting software is efficient bookkeeping. Look for software that simplifies the recording and categorisation of transactions.

3. Accounts payable: managing payments is crucial for SMEs. Look for features that streamline invoice processing, support timely payments, and provide insights into cash flow.

4. Accounts receivable: opt for accounting software that facilitates smooth invoicing, helps track customer payments, and provides reminders for overdue invoices.

5. Financial reporting: choose software that offers a range of customisable reports. Access to real-time insights empowers informed decision-making and strategic financial planning.

6. Integrations: seamless integration with banking, payment gateways, and CRM systems enhances efficiency as you can share relevant information across multiple systems.

7. Mobile capabilities: a user-friendly app lets you access key financial information and perform essential tasks anywhere; valuable for SME owners on the move.

8. Help and support: live chat, phone or email support, and forums help you and your team to more quickly find solutions to software issues or queries.

How we test accounting software for UK small businesses

At Startups, it's important to us that the product recommendations we make to small UK businesses are useful, accurate, and based on thorough product testing.

We tested ten market-leading accounting software platforms across four main categories of investigation and 24 subcategories – all in all, we covered 111 areas of investigation. Next, we gave a ‘relevance weighting' to the final product category scores - this ensures the products' final ratings perfectly reflect the specific needs and requirements of Startups readers.

Our main testing categories for accounting software are:

Help and Support: Help and support refer to the assistance and resources available to users when they encounter issues or need guidance while using the accounting software.

Pricing: Pricing refers to the cost associated with using the accounting software. It includes factors such as licensing fees and subscription plans.

Main functions: This represents the key areas of accounting that the software focuses on. This includes functionalities such as financial statement preparation, income and expense tracking, and managing vendor and customer accounts.

Software Functionality: Refers to the software capabilities such as integrations, mobile capability, and confirming any additional features outside of accounting.

The Startups product testing process

Key takeaways

• QuickBooks is our best overall choice. It offers a balance of affordability, features, and ease of use, and is particularly valuable for cash flow forecasting.
• Specialised industries may require more tailored software. Xero excels for hospitality, while FreshBooks is ideal for inventory management.

January marks the start of the tax filing season for entrepreneurs. It might seem far away, but getting your accounting software in order now will streamline the process of gathering and organising your financial records, ensuring a smooth tax return filing.

We always recommend you avoid being trapped in a bad contract by thoroughly researching and comparing software before making a decision. Our free cost comparison tool can help. Or, you can download any of our listed systems to start a free trial today.