The best small business accounting software in the UK

Accounting software designed for small businesses and sole traders is low-cost and easy to use. The right package will save you time on routine bookkeeping, improve control of your cash flow and make it easier to file tax returns

**Note Prices/fees correct on 01/10/24 (limited time offers may be available)

Here’s our quick guide to what to look for in small business accounting software, and our review of the UK’s most popular accounting software packages to help you choose what’s best for your business.

Your accounting software needs

The first step to choosing the right accounting software is to understand what your needs are, so that you can assess what different solutions offer.

• Any of the leading packages will make it easier to automate routine bookkeeping tasks and prepare for your accounts. Accounting software providers are continually developing new, clever features like automated bank reconciliation and the ability to scan expense receipts.
• Make sure you know what sort of tax functionality you require - for income or corporation tax returns, VAT and payroll (PAYE). Making Tax Digital (MTD) makes the ability to file returns online essential.
• The larger your business, the more likely it is that you will want sophisticated management reporting features and software that allows multiple users. On the flip side, a sole trader is likely to find sophisticated bolt-ons such as payroll surplus to requirements.

Other practical considerations include how easy the software is to set up and use, integration with your other systems and cost. It's worth asking your accountants which software they recommend so that it is easy to share financial information with them.

Find out more about these popular accounting software packages:

• QuickBooks
• Xero
• FreshBooks
• Sage
• Crunch
• Tide
• FreeAgent
• Clear Books

QuickBooks

Probably the most widely-used accounting software for sole traders and very small businesses, QuickBooks is a strong all-rounder.

Key benefits:

• send ‘pay-enabled’ invoices, making it easier for customers to pay
• links with almost all leading UK banks, plus PayPal, Payoneer and Wise
• business mileage tracking feature

Disadvantages:

• low-cost starter plan lacks features – but can be a good option for sole traders who aren’t registered for VAT
• limited range of optional features, but a wide range of add-on apps are available in the QuickBooks app store

Pricing:

• self employed package £10 per month
• business packages from £15 per month

Find out more about QuickBooks small business accounting software.

Xero

Xero’s popular online accounting software covers all the basics and offers some great time-saving tools.

Key benefits:

• range of plans to suit your business needs
• take photos or scan bills and receipts to automatically extract data
• intelligent transaction-matching helps with bank reconciliation
• large marketplace of apps you can connect to add extra functionality

Disadvantages:

• basic starter plan is restricted to very limited numbers of monthly invoices and purchases
• cash flow forecasting beyond one month ahead is an optional extra

Pricing:

• monthly plans £16 - £59 (plus VAT) per month
• some services, like payroll, are included in some of the paid plans but may be payable as an add-on in the cheaper plans

Find out more about Xero online accounting software for small businesses.

FreshBooks

With a focus on easy invoicing, FreshBooks is a good choice for freelancers and small businesses who want to impress their clients – and get paid quickly.

Key benefits:

• produce estimates and proposals from within FreshBooks using built-in tools
• invoice generator for creating customised, professional-looking invoices – with option to build in direct debit or credit card payments
• time-tracking and project management features

Disadvantages:

• entry-level plan limited to five clients and excludes automated bank reconciliation and accountant access
• lacks features for businesses selling physical products (eg manufacturers and retailers) or contractors/subcontractors using the Construction Industry Scheme (CIS)

Pricing:

• £15 - £35 per month
• higher cost, customised ‘Select’ package available with advanced payments and other features

Get more information on FreshBooks invoice and accounting software for small businesses.

Sage

Sage has a long-established track record and reputation and a solid offering for small businesses.

Key benefits:

• above average reporting tools and dashboards
• good range of bank connections with efficient transaction matching
• clear upgrade path to more sophisticated packages for larger businesses

Disadvantages:

• receipts auto-entry is an optional (paid) extra
• quotes and estimates not included in entry-level package

Pricing:

• two-month free trial
• £15 - £92 per month

Read more about Sage online accounting software for small businesses.

Crunch

Unlike other providers, Crunch offers both software and accounting services. That can be an ideal solution, particularly for businesses that don’t have an accountant or aren’t happy with the service they currently get.

Key benefits:

• accountancy and tax support as well as accounting software
• range of packages to suit start-ups, sole traders and limited companies
• competitive pricing compared to standalone accountancy services

Disadvantages:

• software not as fully-featured as more advanced competitors
• won’t suit businesses that want face-to-face service from a local accountant

Pricing:

• sole trader starter package 1% of money earned capped at £300 per year (limited functionality)
• £86.50 - £159.50 per month packages for limited companies
• extra (paid-for) options include bookkeeping, payroll and pensions auto-enrolment

Read more about Crunch online accounting for small businesses.

Tide

Simple bookkeeping and accounting, linked with your business bank account.

Key benefits:

• simplifies all-round bookkeeping, financial management and tax return preparation
• personalised invoices with payment links
• Connect your existing business bank account or open a Tide business account

Disadvantages:

• lacks the sophisticated features of more advanced packages

Pricing:

• £9.99 per month

Find out more about Tide.

FreeAgent

Award-winning software now owned by the NatWest Group.

Key benefits:

• high quality, user-friendly design and quick access to a financial overview of the business with the FreeAgent dashboard
• payroll included at no extra cost
• direct self assessment filing with HMRC
• free for customers with a business account with NatWest, Royal Bank of Scotland or Ulster Bank

Disadvantages:

• ease of use comes at the cost of slightly restricted functionality
• entry-level package relatively expensive

Pricing:

• 30-day free trial
• £19 per month (sole trader) or £33 per month (limited company)
• free for NatWest, RBS, Ulster Bank and Mettle business account customers

Find out more about FreeAgent simple accounting software for UK small businesses.

Clear Books

Designed for ease of use, and with plenty of support on offer, Clear Books can be an excellent choice for business owners who want accounting to be as easy as possible.

Key benefits:

• good all-round features, even on entry level package
• strong support through online guides and videos, plus free email/phone helplines

Disadvantages:

• optional payroll software can become expensive with more employees

Pricing:

• 30-day free trial
• from £13.50 - £36 per month
• discounts for yearly subscriptions
• £5.40 per employee for optional payroll (minimum two employees)

Find out more about Clear Books small business online accounting software.

Accounting software providers may introduce new features or change their prices at any time, so it’s worth checking the latest information before making a decision. The pricing details in this guide do not include VAT or any introductory discounts or free trials.