Best self-employed accounting software

Accounting software does so much more than just keep track of your basic financial comings and goings. You’re also able to manage your accounts on the go, create invoices, keep track of your cashflow, and easily handle your expenses – which are all crucial, particularly during our current economic climate and cost of living crisis.

Our expert researchers determined that the best accounting software for self-employed individuals is QuickBooks, thanks to its intuitive interface and simple templates to help you process common tasks. They are also currently offering 90% off for six months, giving you a great value way to try the software.

With so many options out there, it can be hard to know how they stack up against each other, and which is the right choice for your business. Whether you’re self-employed, freelance, or a sole trader – help is at hand. Read on for our reviews of the best accounting software to help you spend less time keeping track of your bills, and more time actually running your business.

What is accounting software?

Accounting software is a computer program or application designed to manage and streamline financial processes within a business. It is used by companies of all sizes to record, process, and track financial transactions, generate financial statements, and perform other accounting-related tasks. According to Intuit, most business owners save around 8 hours a month on their accounts – even if you use free accounting software to get started.

Accounting software automates many manual and time-consuming tasks involved in financial management, such as recording sales and purchases, managing accounts payable and receivable, payroll processing, inventory management, budgeting, and generating financial reports. Businesses that use accounting systems have five times more customers than businesses that don't, according to GoRemotely.

It helps business owners maintain accurate and up-to-date financial records, improve efficiency, reduce errors, and obtain valuable insights into the financial health of their businesses.

Best self-employed accounting software: our top picks

We’ve been helping small businesses for over two decades. In that time, we’ve carried out extensive research into the best accounting software, informed by our knowledge of the specific pain points and desires of SMEs. Our top picks for self-employed people are QuickBooks, Freshbooks, Sage Business Cloud Accounting, and Xero – and we've determined the best based on factors such as functionality, pricing, and customer service.

Quickbooks – Best for doing your tax return

Recommended plans:

• QuickBooks Self Employed: £10 per month exc VAT
• QuickBooks Simple Start: £14 per month exc VAT
• Currently offering 90% off for 6 months!

QuickBooks features

QuickBooks is one of the big players when it comes to accounting software in the UK, and its unrivalled features for sole traders and freelancers makes it a very strong contender when it comes to the best self-employed accounting software.

Where QuickBooks really stands out is its tax planning support. Unlike with some of the other options on this list, you can:

• Separate personal and business expenses
• Track mileage
• Automatically view income estimates
• Easily get all the figures you need when it comes to submitting your self-assessment tax return

These features come on top of a very capable business accounting package. Even the most basic plan comes with:

• Unlimited invoicing
• Report creation tools
• Bank account integration
• The ability to snap your receipts on the go, and have the data automatically extracted

QuickBooks accounting dashboard

It’s good value too – the base self-employed plan has a standard cost of just £10 per month (exc VAT), making it one of the cheapest plans out there.

This should be ideal for most self-employed people, but if you are registered for VAT, then you should upgrade to the Simple Start plan (£14 per month exc VAT), as this lets you easily prepare and submit your electronic VAT declarations. You even get SmartScan, a clever bit of error checking tech that will check whether any of your VAT codes are unusual (i.e. possibly wrong) or duplicates. Simple Start also lets you quickly create quotes and estimates, and supports Construction Industry Scheme (CIS) contractor and sub-contractor deductions.

The only thing to really fault QuickBooks on is its support options. The £10 per month self-employed plan only offers online chat support, and while the hours for this are generous (7am to 10pm Monday to Friday and 8am to 8pm on weekends), it might not be ideal for some self-employed people. Of course, there are lots of resources available through the website, but in terms of actual one-to-one assistance, you might not be able to get help when you really need it.

The £14 per month Simple Start plan adds phone support, but with similar conditions. This is available 8am to 12am Monday to Friday and 8am to 8pm on weekends, which is again generous, but not 24/7.

QuickBooks pricing

To learn more, check out our in-depth QuickBooks review.

Freshbooks – Best for impressing your clients

Recommended plan

• FreshBooks Lite (£12 a month exc VAT)

FreshBooks features

FreshBooks began life in Canada in 2003, but has recently made a strong push in the UK, including adding Making Tax Digital (MTD) VAT integration in 2020. It’s a strong overall package, but what we really like is its invoice and estimate creation tools.

FreshBooks invoice creation feature

While most accounting software offers this, it’s been a key priority for FreshBooks for years, and this focus really shows. There’s a wide range of colours available, and it’s easy to import your own graphics, meaning you can very quickly produce invoices and estimates that perfectly reflect the tone of your self-employed business.

FreshBooks’ base plan, Lite (£12 a month exc VAT), also includes some really useful features for sole traders and freelancers. You’ll get:

• Unlimited time tracking
• Unlimited expenses
• Mobile mileage tracking
• Unlimited estimates
• Reporting tools
• Bank account integration
• The ability to easily create VAT reports that can be submitted directly to HMRC with a click

The real downside is the five client limit on the Lite plan. FreshBooks advises that this refers to “the number of both active and archived clients in your account”. However, “if you’re no longer billing or working with a client, you can delete them to free up spots for new clients”, and retain access to their invoices and information. You are also able to delete and undelete clients as you wish.

How much this impacts you will, of course, depend on how many clients your business has – but it feels like a rather strict limit given the monthly cost. The other option is to upgrade to the Plus plan, which costs £22 per month (exc VAT) and limits you to 50 billable clients per month.

In terms of support, FreshBooks does offer phone assistance alongside the resources on its website. However, this seems to operate on US business hours – meaning it’s only available from 1pm to 1am GMT – so make sure you bear this in mind when choosing the right self-employed accounting software for your business.

FreshBooks pricing

To learn more, check out our in-depth FreshBooks review, or find out: how does QuickBooks measure up to Freshbooks?

3. Sage Business Cloud Accounting – Best for customer service

Recommended plan

• Accounting Start (£12 per month exc VAT)

If you’re less confident with accounting software, then Sage Business Cloud Accounting is a strong option. 53% of accountants use cloud-based technology to enhance project management functions and improve communications, according to Fundera. Everything is arranged clearly and logically, plus there’s 24/7 support via phone and live chat, so there’s someone there to help whenever you need it.

Sage's accounting dashboard

Sage features

With Accounting Start, you get a solid basic package. This lets you:

• Create and send invoices
• Track what you’re owed
• Automatically reconcile your bank accounts
• Create and submit MTD VAT reports to HMRC

However, if you need to work out Construction Industry Scheme (CIS) deductions, then you’ll require the £24 per month (exc VAT) Accounting Standard plan. This also grants you the ability to:

• Run advanced reports
• Send quotes and estimates
• Forecast cashflow
• Manage purchase invoices

And that’s it, unfortunately. No matter which plan you pick, you won’t get any advanced features like mileage tracking, and the ability to import expense receipts by snapping them on your phone is only available as an optional extra.

Where Sage really shines, though, is its customer support. On all plans, you get 24/7 help via both phone and live chat, as well as a comprehensive suite of instructional videos and online guides.

Sage pricing

Sage’s base package, Accounting Start, costs £12 per month (exc VAT) and includes tools to calculate and submit VAT returns. When it comes to self-employed accounting software, this plan is probably more suited to well-established freelance/sole trader businesses.

To learn more, check out our in-depth Sage Business Cloud Accounting review.

Xero – Best for a clean, user-friendly interface

Recommended plan

• Xero Starter (£12 per month exc VAT)

Xero features

Xero calls itself “beautiful accounting” – and here at Startups, we’re big fans of its elegant interface. Everything is laid out clearly, and the white, blue, grey, and light green pastel colours it uses are calming. This is important, given that you’ll be checking your accounting software a lot as you run your self-employed business.

Xero's accounting dashboard

Crucially, there’s substance to go with that style. The basic £12 per month (exc VAT) starter plan lets you:

• Create invoices and quotes
• Enter bills
• Reconcile bank transactions
• Submit VAT returns to HMRC
• Automatically calculate Construction Industry Scheme (CIS) deductions
• Capture bills and receipts using Hubdoc

However, this plan does also come with some strict usage limits – indeed, you can only send 20 invoices and quotes and enter five bills per month. Go above this, and you’ll need to start paying £26 per month (exc VAT) for the Standard plan. It’s a steep increase, especially given that the Standard plan offers no other extra features.

It’s also unclear what Xero’s promise of “24/7 support” actually means. Its website is full of helpful guides and instructional videos, but things are much less clear-cut when it comes to getting help from an actual human. Xero has no support number you can call, and no live chat option either. Instead, you send a message and then wait for them to get back to you. It’s hard to tell how long this takes, and there’s at least one disgruntled customer on the Xero forums complaining about waiting several hours for a response to their query.

Xero pricing

How does accounting software work?

Accounting software is designed to be user-friendly, with intuitive interfaces and navigation. This makes it accessible to users with varying levels of accounting knowledge. 

It simplifies financial tasks, automates calculations, improves reporting accuracy, facilitates integration with other systems, enhances security, and enables businesses to efficiently manage their finances and make better-informed decisions.

Many software providers offer customer support and training resources to assist users in getting the most out of their accounting software.

You can also rest assured that while managing all these large financial processes, accounting software also offers features like user access controls, data encryption, and regular backups to safeguard sensitive financial data.

What types of businesses is accounting software suitable for?

Accounting software is suitable for a wide range of businesses, regardless of their size or industry. It can be utilised by small startups, freelancers, sole proprietors, mid-sized companies, and large enterprises. 

The software's flexibility allows it to adapt to various business models and structures. It can handle different types of transactions, such as sales, purchases, expenses, payroll, and inventory management. This makes it applicable to businesses involved in retail, e-commerce, professional services, consulting, hospitality, construction, and many other sectors.

Accounting software provides benefits to businesses with different levels of financial expertise. The software's user-friendly interfaces and customisable features make it accessible to users with varying levels of accounting knowledge, and tailored to meet the specific needs of many different industries.

Conclusion: How to choose your self-employed accounting software

Choosing the right self-employed accounting software for your business is just like choosing anything else – you need to work out what you need most, and what you can live without.

If, for example, you’re VAT registered, then it’s going to make a real difference if you choose software that lets you directly submit VAT returns to HMRC. And if you know you’ll need to calculate Construction Industry Scheme (CIS) deductions, then look for a plan that offers this.

More generally, think carefully about how your business works. If the plan you’re considering has strict usage limits, then work out whether you’re likely to be able to stay within them. You should also think about how much you’ll actually use advanced features like time tracking, or being able to submit your expenses just by snapping a receipt with your smartphone.

Just as importantly, think about how you work. If you’re an IT whizz that loves learning new software, then you probably don’t need to worry too much about when and how in-person support is available. If you’re less confident though, it could be worth paying a bit more to ensure there’s always someone to call if/when you run into problems.

Finally, if you really can’t decide, then check whether a free trial is available. At the time of writing, QuickBooks, Sage, Xero, and Freshbooks all offer 30-day free trials, so you can take them for a spin and see if they’re the right self-employed accounting software for you. If you do do this though, make sure you know what features would actually be on offer in your chosen plan – the free trial generally gives you access to everything, and there’s no point diving into features that are only available on plans you can’t afford.

This time and effort is worth it, though. Whether you’re self-employed, a freelancer, or a sole trader, finding the right accounting software can make running your business quicker, easier, and less stressful – leaving you more time to do what you’re actually good at.

Good luck!