Best free accounting software for UK small businesses 2024

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QuickBooks – free trial available

4.7

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Zoho Books - best fully free software

4

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Xero - free trial available

4.6

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Our expert research shows that the best free accounting software in 2024 is Zoho Books. For zero charge, you’re able to track spending, build customised sales invoices, and — rarely for free accounting platforms — submit a customised VAT return at the end of the tax year.

April might mark the end of the financial year, but there are still plenty of key tax dates sprinkled throughout the year that can trip business owners up. That includes the upcoming October 5 deadline to register for self-assessment tax return for FY2023/24.

Downloading accounting software is the best way to stay prepared; but the idea of forking out for new technology is daunting in today’s economy. That’s why more people are turning to free software as a smart way to keep costs down while your cash flow feels more volatile.

Below, we’ve listed the pros and cons of the best completely free accounting systems for SMEs, so you can DIY your bookkeeping without a costly subscription. We’ve also outlined the best platforms with a free trial for budget-conscious users who want to try before they buy.

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FEATURED	BEST - FREE TRIAL	BEST - FREE
Xero	QuickBooks	Zoho Books	QuickFile	FreeAgent	GnuCash	VT Cashbook
Price From £16 per month (excl. VAT) 75% off for 6 months	Price From £10 per month 90% off for 7 months	Price From Free	Price From Free	Price From Free (for Natwest/RBS business banking customers)	Price From Free	Price From Free
Key Benefits Slick design Insightful reporting 24/7 online support	Key Benefits Free trial available Self-employed plan Income tax estimate tool Plans have no usage limits	Key Benefits Top-tier customisation tools MTD VAT filing Customer portal	Key Benefits Bank feed integration MTD VAT filing Customer portal	Key Benefits Mobile app Project tracking Time tracking tools	Key Benefits Generates PDF invoices Checkbook-style interface Open-source desktop software	Key Benefits Fast data entry with autocomplete Cash-basis accounting method Produce basic reports
Visit Xero	Visit Quickbooks	Compare Deals	Compare Deals	Compare Deals	Compare Deals	Compare Deals

1. 🥇 Zoho Books: best for scaling businesses or those with unique accounting needs

Zoho Books’ cash flow dashboard

What is Zoho Books?

Zoho made its name with its CRM systems (check out our Zoho CRM review to learn more) but it has offered accounting software since 2011. From our research and user testing, Zoho Books’ free plan is the top free system overall, though its premium tier is the real steal.

Zoho offers many business products, all of which excel at customisation. Zoho Books is no different. Even on the free plan, users can design invoices and create custom ‘views’ to analyse transactions based on specific criteria. For example, if you’re a craft brewery that needs to track specific ingredients and production costs.

Most excitingly, you can also use Zoho Books to make bespoke email templates. If you’re sending an invoice (Zoho Books lets you create up to 1,000 per year on its free plan) to a supplier or client, you’ll be able to apply your own branding and even add a payment link, so you can settle payments much faster and with a professional-looking design.

What do I get on the Zoho Books free plan?

As well as being an excellent customisation tool, Zoho Books is also fully Make Tax Digital compliant, which means it can be used to submit a VAT return to HMRC. These need to be sent every three months and they can be a pain to build, so it’s incredibly handy that Zoho Books permits this as part of its platform. You can also:

• Automate payment reminders
• Set up a customer portal for clients to view invoices
• Create business reports
• Produce (and schedule) recurring invoices

Zoho Books’ free plan is ideal for firms just starting out, but there are some convincing reasons to sign up for Zoho Standard (£10 per user, per month). Standard lets you create up to 5,000 invoices per year, while you’re limited to 1,000 on the free plan. This makes it more suitable for businesses with high transaction volumes, and SMEs with serious growth plans.

Another point is that Zoho Standard comes with bank feed integration. Once you’ve linked your business bank account, all transactions will automatically appear in Zoho Books. This is opposed to Zoho Free, where you have to download and import bank transactions manually: a time-consuming task that’s better avoided.

What support does Zoho Books offer?

✔️Online forum and FAQs
✔️Online manual
✔️ Email support
❌ Phone support
❌ Live chat support

2. QuickFile: best for freelancers sending many invoices

Quickfile’s dashboard for invoicing, banking and important notes

What is QuickFile?

Founded in 2010, QuickFile is accounting software that’s specifically aimed at freelancers and self-employed workers. It’s a simple and intuitive cloud-based solution that helps entrepreneurs who are short on time to automatically chase and secure payments from slow clients.

Like Zoho Books, QuickFile offers a customer portal. Clients can use this to manage subscriptions, accept quotes, and pay invoices through a range of online payment systems like PayPal and Stripe, drastically reducing the risk of payment delays.

Going one step further than Zoho, QuickFile also has a mobile app, which allows multi-tasking side hustlers to create invoices and snap expenses receipts on the go. It also automates with your bank feed (Zoho, in comparison, charges for this feature) so you can easily separate personal finances from revenues if you’re operating without a business bank account.

What do I get with QuickFile?

QuickFile offers a good range of advanced accounting functions, on top of its USP of payment features. I particularly like that it can be used to create estimates, purchase orders, and delivery notes, making it a great option for dropshipping firms.

However, it is lacking certain key capabilities. FreeAgent, for example, includes features that are designed to help freelancers manage their workload; such as time tracking and project management. It also offers self-assessment tax return filing, which QuickFile does not.

QuickFile is also only free for accounts of a certain size. You’re limited to 1,000 ledger entries (encompassing invoices, purchases and bank transactions). Once you go over this limit, you pay a set fee of £45+VAT per year.  Moreover, its free platform is full of annoying and unattractive adverts that can take up a lot of the desktop.

This means that QuickFile is definitely not free forever. However, it still offers a decent pricing structure for startups – who can upgrade as their business grows – and means that you can easily try QuickFile for free to see if it’s the right fit for your business.

What support does QuickFile offer?

✔️Online forum
✔️ Email support
❌ Phone support
❌ Live chat support
❌ Online manual

3. FreeAgent: best for consultants or agencies working to short-term contracts

FreeAgent’s cash flow dashboard

What is FreeAgent?

Set up in 2007, FreeAgent is now used by over 90,000 small businesses across the UK. It boasts some great advanced features that dramatically simplify the process of paying tax; like automatically generated VAT returns and corporation tax forecasts.

FreeAgent’s biggest benefit is its self-assessment tools that automatically fill in up to 90% of the self employment tax return form. Plus, unlike any other provider on this list, you can also use FreeAgent to pay employees, as the platform allows users to file auto-calculated PAYE and National Insurance directly to HMRC.

🚩 Despite the name, FreeAgent is not free for everyone. Only sole traders who have a business current account with NatWest, Royal Bank of Scotland, or Ulster Bank will qualify. For everyone else, FreeAgent costs £19 per month (or £9.50 for the first six months).

What can FreeAgent do?

FreeAgent has all of the core accounting features that Zoho Books and QuickFile offer. Interestingly, it also boasts time tracking tools, so you can easily view timesheets, which makes billing clients much simpler as you’ll know exactly how many hours you’ve completed on an account each month.

On top of this, FreeAgent has a projects view that clearly shows the income, time, and expenses associated with each project, and whether it’s making a profit or loss. Plus, a mobile app lets you view all of this data from your pocket.

Combined with its payroll and self-assessment features, all this makes FreeAgent a good option for small business agencies working on short-term contracts. You’ll be able to pay any freelancers you work with and see where all your hours were spent within a set time period.

As flagged above, FreeAgent is only free for certain business banking customers. Paid plans start a £19+VAT per month. All tiers have a 30-day free trial. This is one big prerequisite that the other software such as Zoho Books, Wave Accounting and GnuCash does not have – instead, anyone can sign up to these platforms instantly without barriers to entry.

What support does FreeAgent offer?

FreeAgent offers excellent customer service. It is the only brand on this list to offer both phone and email support channels during business hours (9am-5pm Monday to Friday).

✔️ Online manual
✔️ Online forum
✔️ Email support
✔️ Phone support
❌ Live chat support

4. GnuCash: best for micro-businesses with low transaction volumes

GnuCash is a strong, completely free option for basic data entry and tracking your income and expenses.

What is GnuCash?

GnuCash is an open-source accounting software. That means anyone can download and edit the actual code that makes up the program in order to add extra functionality and fix errors.

However, unless you’re a software whizz with a coding background, you won’t get much out of GnuCash. Unlike VT Cashbook, it’s not particularly tailored to the needs of SMEs (there’s no open banking integration or mobile app, for example). It also does not support payroll, so you won’t be able to pay employees through the software.

Plus, GnuCash works in accrual-mode. That means it records expenses and sales when they take place, instead of when an invoice is actually settled. This is a smarter way of tracking transactions for businesses, but potentially a drawback for freelancers and gig workers, who will need to make fiddly manual edits if a payment is late.

What do I get with GnuCash?

GnuCash is best used for basic data entry. If you’re a micro-business with a limited number of transactions each month then you can use GnuCash to efficiently manage your finances while avoiding the complexity of feature-rich software that you might not fully utilise.

GnuCash boasts a checkbook-style interface that allows you to record transactions via double entry accounting (where every transaction is recorded as a debit to one account and a credit to another). You’ll be able to register incoming bills or import your downloaded bank statements, and GnuCash can then:

• Automatically add VAT to sales invoices
• Add tax information to sales invoices (including for abroad clients)
• Generate a PDF invoice to send to clients
• Build reports to track profits and losses, or business overheads

What support does GnuCash offer?

✔️Online forum and FAQs
✔️Online manual
❌ Email support
❌ Phone support
❌ Live chat support

What is VT Cash Book?

VT Software was founded in 1997, and its professional products (VT Accounts and VT Transaction+) are popular with small firms. VT Cash Book is its free starter product.

Cash Book is a straightforward, easy-to-use desktop accounting software that is most suitable for firms that want to manage their firms on a cash basis, rather than invoices (also known as accrual).

Because of this cash basis, the software only tracks income that’s been received and expenses that have been paid. This eliminates the need to chase outstanding invoices or account for pre-paid expenses, making bookkeeping more manageable. It’s also a more accurate reflection of your current cash situation.

However, this method can make it more challenging to forecast future income, so it’s not ideal for firms with big sales volumes, as it can lead to mismatched revenue and expense recognition.

What do I get with VT Cash Book?

VT Cash Book is best thought of as a solid way to record your payments and receipts. It is short on advanced features, but you’ll be able to run limited reports on profit and loss, balance sheets, ledger activity, and transaction lists.

It’s designed to take manually inputted data from your bank and reconcile these statements with your accounts so you can correct simple mistakes. Once you have your final profits, however, you won’t be able to submit a VAT return; you’ll have to register with HMRC to do this separately yourself.

Crucially, VT Cash Book is unsuitable for professional service or B2B firms. Because it is entirely focused on managing businesses on a cash basis, VT Cash Book’s free plan has no invoicing features for overseeing payments from or to customers and suppliers.

This is a big limitation. Like Zoho, VT clearly wants to encourage business owners to upgrade to its advanced paid versions. Cash Book’s cheapest plan is VT Transaction+, which costs £75+VAT per year for a single user, and is MTD compliant and has invoicing features.

What support does VT Cash Book offer?

VT Cash Book is the worst performer on this list for support features. Its only help channel is an online manual, compared to FreeAgent which offers both phone and email support during business hours.

✔️ Online manual
❌ Online forum
❌ Email support
❌ Phone support
❌ Live chat support

Best accounting software with a free trial

All free accounting software comes with caveats and drawbacks, which is why it might be worth the extra few pounds to find an affordable, paid-for accounting software for your firm.

That’s why as well as free software, we also looked at paid accounting systems (the best self-employed accounting software as well) and the top contenders in both categories, so you can be certain about which you want to download.

Here are three of the most popular paid accountancy software programs on the market:

1. QuickBooks

QuickBooks is cloud-based accounting software that’s specifically designed for UK SMEs. Our researchers named it the best accounting software overall, just behind FreshBooks (see our QuickBooks vs FreshBooks review for a closer comparison).

Quickbooks ticks all the standard boxes – income and expense tracking, the ability to submit VAT returns, and an invoice builder – but also has great features like a cash flow planner, and built-in integration for Construction Industry Scheme (CIS) deductions. All plans also come with reporting capabilities and 24/7 customer support.

When it comes to QuickBooks’ prices, there are three small business plans:

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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 currently offering these plans at 90% off for 7 months. All plans have a 60-day free trial, so you can try it for yourself with no obligation. Read our complete QuickBooks review to find out more.

2. FreshBooks

FreshBooks started in 2004, and has been cloud-based since the beginning. From its Toronto home, it has gradually spread worldwide, and has a tailored offering for the UK. All FreshBooks plans include unlimited customisable invoices, unlimited expense entries, and a tool that helps you create and send Making Tax Digital VAT returns.

There are two FreshBooks plans designed for small businesses, as well as a Lite plan for sole traders:

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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 is currently offering 50% off for the first 3 months. All plans also have a 30-day free trial if you don’t want to commit just yet. Read about FreshBooks pricing to learn more.

3. Sage Business Cloud Accounting

Sage is a UK company that has been producing accounting software for the best part of four decades. Founded in 1981, its latest offering – Sage Business Cloud Accounting – is a cloud-based accounting solution that caters for firms of all sizes.

Alongside all the core accounting software features  – including invoice creation and Making Tax Digital VAT returns – Sage Business Cloud Accounting has 24/7 via phone and live chat, which is vital for SMEs whose working hours frequently stretch beyond the nine to five.

The price depends on which Sage Business Cloud Accounting package you select:

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Plan Accounting Start	Plan Accounting Standard	Plan Accounting Plus
Cost £15 per month (plus VAT)	Cost £30 per month (plus VAT)	Cost £39 per month (plus VAT)

Sage is also offering 3 months free on its packages, as well as a 30-day free trial so you can see if it’s right for your business. Check out our full Sage Business review to find out more.

Buying guide: How to choose the right free accounting software

Here are some key things you should consider when comparing providers:

• Check with your accountant (if you have one): If you do already work with an accountant, then it may be useful to get their input on what software is likely to work best for your business, and which works best with their systems.
• Choose your must haves: regardless of the brand you choose, chances are you will have to compromise on free accounting software. Decide which of the bad points you can live with. We recommend going with a tool that allows you to submit a VAT return (such as Zoho Books).
• Take them for a spin: free accounting software is ideal for commitment-phobes. Simply sign up, input your data, and see how each feels. Many of the top paid accounting software providers also offer free trials, so you can see exactly what the extra outlay will give you in return.

For a more comprehensive overview of the different paid accounting packages available, check out our page on the best accounting software for small UK businesses.

What should I look for in a free accounting software?

When seeking free accounting software, consider these vital features:

• Bookkeeping: software should simplify recording financial transactions, managing invoices, and categorising expenses
• Accounts payable: the software should streamline tracking and managing outgoing payments, ensuring accurate cash flow management
• Accounts receivable: seek tools that facilitate the creation and tracking of invoices for clients
• Financial reporting: annual, monthly, or weekly reports will allow you to understand your business’s financial health at a glance
• Integrations: ensure compatibility with the other essential tools your business relies on, such as CRM systems, payment gateways, or ecommerce platforms
• Mobile capability: look for software that comes with a mobile app, such as Quickfile or FreeAgent
• Help and support: check for available resources like tutorials, FAQs, and responsive customer support to assist you with queries or issues

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

Final thoughts

Free accounting software is hugely attractive to UK small businesses, especially those that are just starting out. But, you don’t want your small business to stay small.

As we have explained, all free accounting software comes with compromises. If you can afford it, finding a paid solution that will grow with your business like QuickBooks or FreshBooks could enable faster growth and smarter cash management for investing.

All brands in this list are either free or offer a 30-day free trial. It’s only by actually using the software that you’ll be able to work out which is right for you, which compromises are tolerable, and which extra features are really worth their money.