Best small business accounting software in 2020
Accounting software is a smart, scalable solution for small businesses. But which provider is right for you? Browse our top seven picks below to find out
As your small business grows, so too will your accounting workload. Job costing, invoicing, billing, forecasting… how do you handle it all?
Well, accounting software is a good start. For a small monthly fee, you’ll be able to manage your assets, pay your staff, and plan for the future – keeping on top of the books, while staying within your budget. And, because accounting software is cloud-based, you’ll be able to access it whenever, from wherever you are in the world.
Choosing to use accounting software is a no-brainer. Picking the right provider for your business, though, will require a little more use of your grey matter.
Luckily, that’s where we can help. Here are the best accounting software providers for small businesses in the UK:
- Sage – most scalable
- QuickBooks – best value for money
- Xero – slickest online dashboard
- FreshBooks – most affordable
- Kashoo – best for reporting and analytics
- FreeAgent – fewest limits on users and features
- Zoho Books – best for ease of use
Below, we’ve listed our top seven cloud-based accounting software picks for UK businesses. Taking into account features, ease of use, costs, and customer support, we’ve assigned each supplier an overall, weighted grade out of five.
Read on to find out which small business accounting software is the right fit for your startup, and make the most of the best deals right now.
Best for scalability
These days, Sage’s industry-leading software caters to a customer base of over six million. But go back to 1981, and Sage had just begun life in a basement, focusing solely on – you guessed it – accounting software. And, although Sage has outgrown its original digs, the company’s small business focus remains the same. So what do you get for your money?
Well, as Sage’s most basic plan, Accounting Start (£12 per month) does all the basics. It supports one user, and allows you to create and send invoices, calculate and submit VAT, and automate bank reconciliation. Larger businesses can upgrade to Accounting Standard (£24 per month), which unlocks unlimited users, and adds cash flow forecasting and advanced reporting into the mix.
For SMEs looking to scale beyond that, Sage’s Accounting Plus (£30 per month) brings even more features to the table. You’ll get inventory management and support for multiple currencies included, and be able to streamline receipt input with Sage’s ‘AutoEntry’ feature.
You can add payroll to any plan for just £7 (excl. VAT) per month.
With over 4.5 million businesses around the world relying on its services, accounting software powerhouse QuickBooks must be doing something right.
And, with a stunning set of features and the most transparent, affordable pricing we found, QuickBooks offers plenty to admire. You can get started with its basic plan, Simple Start – which includes unlimited invoicing, receipt snapping, and expense tracking – for just £5 per month (£12 after the first six months) for a single user.
The next tier up, Essentials (£20, currently going for £8) adds multi-currency support and bill and payment management, and increases the cap to three users. £12 per month (£30 after the first six months) gets you Plus – this tier offers more control over your budget, employee time, and project productivity, with a five user limit.
All plans come with award-winning phone-based support, an intuitive mobile app, and over 700 app integrations. And there isn’t a contract in sight.
With clean lines, aquatic colours, and a simple, intuitive design, Xero’s interface is as easy on the eye as it is to use. Its vibrant online dashboard is fully customisable, and effectively visualises your data to give you a direct, digestible overview of your business’ books.
£10 per month gets you the Starter plan, which includes VAT submissions, plus automatic CIS (Construction Industry Scheme) reports and calculations. Though handy, we’d recommend this plan only for the sole traders out there – you’re limited to entering five bills, and sending 20 invoices per month.
Ambitious businesses will almost certainly want to upgrade to Xero’s Standard plan (£24 per month), which does away with its predecessor’s restrictive limits. Large businesses can shell out for Xero’s Premium plan (£30 per month), which comes with multiple currency handling.
Features allowing you to manage staff pensions and payroll and track expenses are available as add-ons:
All plans include 24/7 customer support, access for unlimited users, and integration with more than 800 third-party apps.
If watching your budget is as important as watching your business grow, look no further than FreshBooks. With three feature-rich plans and the lowest prices we found, FreshBooks is a refreshingly affordable accounting software solution.
Its basic plan, Lite, starts at just £4.40 per month – the cheapest plan we came across. And, with unlimited invoices, expense entries, time tracking, and estimates, it’s also one of the most generous… though you’re limited to five billable clients only.
Upgrading to Plus (£7.60 per month) adds unlimited proposals, and allows you to automate recurring invoices and late payment reminders. It also extends your client limit to 50, though larger businesses will want to look at a Premium plan (£15.20 per month), which has a capacity of 500 billable clients.
You’ll also need to remember to keep an eye on any costs lurking below the surface. If you’re a sole trader, FreshBooks is the cheapest option out there. However, adding additional 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.
Best for reporting and analytics
Kashoo. Though it may sound like a bad attempt to stifle a sneeze, it actually offers some of the most powerful accounting software on the market.
Unlike all the other accounting software we’ve reviewed here, Kashoo doesn’t segment its offerings into plans based on depth of features or business type. With Kashoo, you’ll pay just $16.65 (£13.70) per month, and in return get everything Kashoo has to offer.
And that’s a lot. With automatic reconciliation, smart invoicing, and effortless sales tax tracking, Kashoo does the hard stuff for you.
Better still, its analytics and reporting functions are second to none. You can produce financial reports with just a single click, and send them to your accountant in another. You’ll also get a 360-degree view of your sales tax, and be able to compare figures from across months and years with ease.
This is backed up by multi-currency support, unlimited users, and excellent customer support. And, if you’re still not convinced, you can try before you buy – Kashoo offers all users a free 14-day trial.
$16.65 per month (excl. VAT)
Best for fewest limits
FreeAgent isn’t the cheapest software on this list – nor does it boast the most functions. But, when it comes to removing limits on your users, clients, projects, and features, FreeAgent is our top pick for small UK businesses.
FreeAgent gives you everything for a single, fixed monthly fee, which depends on your business’ legal status. FreeAgent’s savvy software makes self-assessment simple for sole traders (£9.50 per month, reduced from £19), and helps partnerships (£12 per month, down from £24) with profit share calculation.
However, we most recommend FreeAgent for limited companies. Sure, you’ll pay a bit more (£14.50 per month, £29 after six months), but its dividend vouchers and Corporation Tax filing are difficult to top.
All plans come with FreeAgent’s award-winning customer support.
Best for ease of use
With a CRM (customer relationship management) tool, email hosting, and project management solutions, Zoho has built a reputation on simple, user-friendly tools for businesses – and its accounting software doesn’t disappoint.
Zoho Basic (£6 per month, for two users) allows you to track, reconcile, and budget with ease, from your smartphone or computer. You’ll also be able to stay on top of your projects and timesheets, add 50 contacts, and enable up to five automated workflows.
Its most popular plan, Standard, costs £12 per month, for three users. As well as more contacts (500) and more workflows (10), it adds bills, reporting tags, and purchase approval, plus integration with Twilio.
Zoho’s answer for more established businesses is Professional (£18 per month, for ten users). For the money, you’ll be able to store an unlimited amount of contacts, and gain Zoho’s purchase and sales order features – not to mention a snazzy custom domain, too.
Adding extra users will set you back £2 per user, per month. Auto-scans can also be purchased in bulk – 50 monthly scans costs £4 per month, or £40 for the year.
What is the easiest accounting software for small business?
Zoho Books is the easiest accounting software to use, thanks to its simple interface and smooth user experience. However, we’d also recommend Xero, which has a sharp, intuitive online dashboard, and Quickbooks, which combines user-friendliness with affordability.
Is there free accounting software?
Yes, there is – Wave, QuickFile, and GnuCash all offer free accounting software for small businesses. However, there’s a reason you won’t see any of those suppliers on this list.
Free accounting software tends to impose hefty limits on features and functionality, and rarely (if ever) presents a sufficient solution for businesses looking to scale. We don’t recommend it, even for those just starting out.
For a detailed comparison of the options available, check out our guide to the best free accounting software for small businesses.
What does ‘cloud-based’ software mean?
These days, cloud-based accounting software is the standard. Rather than purchase the solution outright (or build it yourself), you’ll lease the software on a monthly basis. This is called SaaS (Software-as-a-Service).
With an SaaS solution, your data will be stored by your accounting software provider ‘in the cloud’. This means you’ll save on the costs of hosting and securing your own data, and allows you to access the software without having to download or install anything first.
Cloud-based software also offers the benefit of allowing you to log in from anywhere with an internet connection, and collaborate in real time.