There are several options when it comes to selecting the right accounting and payroll software for your small business in UK. You can either go for an accounting or payroll accounting software or both. Both types of accountancy software are very similar in their functions, but the main difference between them is that while accounting software focuses on financial ledger, payroll software will take care of all payroll-related activities like deductions, tax payments, Social Security payments, salary calculations etc. An additional feature, i.e., personal finance management is also considered as part of payroll software. However if you are looking to get only the financial ledger work done, then you should go for an accounting software that will give you all the tasks related to bookkeeping and taxation process under one roof.
Best small business accounting software in 2021
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 outAlec HawleyOctober 6, 20218 min read
It’s not hard to see how accounting software can help your business, however it can be tricky to work out which provider is the best fit for your business.
To an extent, this will always depend on what exactly your business does but, using our 20 years of small business experience, we’ve run the rule over the options out there . Our verdict is:
- We’d confidently recommend QuickBooks as the best overall choice for UK small businesses. It’s an intuitive, modern platform with great value plans, regular deals and discounts, and some truly first-class tax planning features.
- FreshBooks runs it incredibly close – boasting its own range of excellent value plans and a slick design that makes it easy to create ultra-professional attention-grabbing invoices and estimates.
- If you’re not looking to spend, then Zoho Books has the best free plan – though we’d recommend investing just a little to upgrade to one of the good value paid tiers.
To learn more about how the top contenders stack up in terms of cost, features, ease of use and customer support, just read on:Accounting Software Deals
Don’t miss out – we’ve spotted some excellent deals on our top picks for small business accounting software:
- Freshbooks – 30 day free trial, then plans beginning from just £11 per month (Alternative deal: 50% off for the first 3 months)
- QuickBooks – 30 day free trial, then plans beginning from just £8 per month (Alternative deal: 50% off for the first 4 months)
3 out of 7
- backward
- forward
| Price From | Best For | Key Benefits | Free Trial | |||
|---|---|---|---|---|---|---|
| BEST OVERALL | EASIEST TO USE | BEST FREE | ||||
| QuickBooks | FreshBooks | Zoho Books | Sage | Xero | FreeAgent | Ember |
| £8 per month (excl. VAT) | £11 per month (excl. VAT) | Free, or £12 per month (excl. VAT) | £12 per month (excl. VAT) | £12 per month (excl. VAT) | £19 per month (excl. VAT) | £39 per month (excl. VAT) |
| Tax planning | Invoice creation | Project tracking and a great free tier | Customer support | Business reporting | Limited companies | Expert assistance |
| Self-employed planIncome tax estimate toolPlans have no usage limits | Free trial availableFirst-class invoice/estimate creationColourful and intuitive UIDesigned for SMEs | Free plan availableLow cost project trackingOffers free plan for very small businesses | Free trial available24/7 phone supportWill grow with your businessPerfect for less confident IT users | Slick designInsightful reporting24/7 online support | Free trial availableGreat for corporation tax filingFree for Natwest/RBS business banking customers | Free trial availableGives your business an accountantHandles company incorporationOptimise company payouts |
Compare accounting software and find the right deal for youCompare now
We’ve taken a closer look at each of these top providers in the sections below:
QuickBooks
Best overall
4.7out of 5
- Bookkeeping5
- Advanced Features4.5
- Financial Reporting5
With over 4.5 million businesses around the world relying on its services, accounting software powerhouse QuickBooks must be doing something right. And, it’s not hard to see why they’re so popular – their plans are loaded with great features and they have some of the most transparent, affordable pricing around.
They’re one of the few providers to offer a dedicated self-employed plan, which costs just £8 per month, and is one of the most affordable plans around. It’s full of powerful functionality too, and saw QuickBooks claim top spot in our list of the best self-employed accounting software.
Small businesses though will want to go for Simple Start – which adds income tax estimates, phone support, and pay-enabled invoices – for just £12 per month for a single user.
The next tier up, Essentials (£20 a month) adds multi-currency support and bill and payment management, and increases the cap to three users. £30 a month gets you Plus – this tier offers more control over your budget, employee time, stock management, and project productivity, with a five user limit.
All plans come with award-winning support, an intuitive mobile app, and over 700 app integrations. And there isn’t a contract in sight.
| Plan | Cost | Features | |
|---|---|---|---|
| BEST VALUE | |||
| Simple Start | Essentials | Plus | |
| £12 per month (excl. VAT) | £20 per month (excl. VAT) | £30 per month (excl. VAT) | |
| Prepare and submit VAT returns directly to HMRCSend pay-enabled invoicesCreate estimates and quotes | Manage billsAccept and make payments in over 145 currencies3 users | Manage stockTrack employee time5 users |
Compare Plans and find the latest DealsQuickBooks Deals
FreshBooks
Easiest to use
4out of 5
- Bookkeeping4
- Advanced Features3.6
- Financial Reporting4.4
FreshBooks is another great option for UK small businesses – it offers three feature-rich plans at affordable prices and boasts a slick UI that makes doing things like creating invoices and entering payments a breeze.
Its basic plan, Lite, starts at just £11 per month – one of the cheapest plans 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 (£19 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 (£30 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, then FreshBooks is one of the cheaper options 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.
| Plan | Cost | Features | |
|---|---|---|---|
| Lite | Plus | Premium | |
| £11 per month (excl. VAT) | £19 per month (excl. VAT) | £30 per month (excl. VAT) | |
| Send unlimited invoices to up to 5 clientsMTD VAT return filingUnlimited expenses | Send unlimited invoices to up to 50 clientsInvite your accountantBank reconciliation | Send unlimited invoices to up to 500 clientsTrack project profitabilityAccounts payable |
Compare Freshbooks plans and find the latest offersDeals & Discounts
Freshbooks is currently offering a 50% discount on your first three months of usage. You can also save get an extra discount by paying annually.
Zoho Books
Best for project tracking
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. There’s even a high quality free Zoho Books plan that’s perfectly respectable for small teams or single-person setups.
Zoho’s free plan is only suitable for very small businesses as it doesn’t offer important features like bank feeds, and only includes email support.
Naturally, the better features come with a price tag attached. Zoho Standard (£12 per month, for three 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, and manage up to 5,000 invoices.
The next tier, Professional, costs £24 per month, for five users. This adds bills, multi-currency handling, reporting tags, purchase approval, and up to 10 workflow rules.
Zoho’s answer for more established businesses is Premium (£30 per month, for ten users). For the money, you’ll be able to track activity across multiple branches, create custom reports – and get a snazzy custom domain, too.
Adding extra users will set you back £2.50 per user, per month. Auto-scans also need to be purchased in bulk – 50 monthly scans costs £8 per month.3 out of 4
- backward
- forward
| Plan | Cost | Features | |
|---|---|---|---|
| Free | Standard | Professional | Premium |
| Free | £12 a month (excl. VAT) | £24 per month (excl. VAT) | £30 per month (excl. VAT) |
| Manage up to 1,000 invoices per yearMTD VAT filingExpenses & mileage tracking | Manage up to 5,000 invoicesAutomatically import transactionsAdd recurring expenses | Bill managementMulti-currency handlingRetainer invoices | Track activity across multiple branchesCustom domainCustom reports |
Compare Zoho plans to see the latest dealsZoho deals
Sage
Best for customer support
4out of 5
- Bookkeeping3.5
- Advanced Features4.5
- Financial Reporting4
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, 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.
Accounting Start
£12 per month (excl. VAT)
Accounting Standard
£24 per month (excl. VAT)
Accounting Plus
£30 per month (excl. VAT)
Xero
Best for business reporting
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.
£12 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 (£26 per month), which does away with its predecessor’s restrictive limits. Large businesses can shell out for Xero’s Premium plan (£33 per month), which adds multiple currency handling.
Features allowing you to manage staff pensions and payroll and track expenses are available as add-ons:
- Xero Payroll (£1 per employee, per month)
- Xero Expenses (£2.50 per user, per month)
All plans include 24/7 customer support, access for unlimited users, and integration with more than 800 third-party apps.
Starter
£12 per month (excl. VAT)
Standard
£26 per month (excl. VAT)
Premium
£33 per month (excl. VAT)
FreeAgent
Best for limited companies
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.
Unlike Xero (which limits your features), FreshBooks (which restricts the amount of billable clients you can support), and QuickBooks (which holds back its best features for the big spenders),
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 (£19.50 per month), and helps partnerships (£24 per month) with profit share calculation.
However, we most recommend FreeAgent for limited companies. Sure, you’ll pay a bit more (£29 a month), but its dividend vouchers and Corporation Tax filing are difficult to top.
All plans come with FreeAgent’s award-winning customer support.
Finally, you can get FreeAgent free if you’re a Natwest/RBS business banking customer. However, you’ll give up access to your data in return, so make sure you’re comfortable with that if you’re thinking of taking up this offer.
Sole Trader
£19 per month (excl. VAT)
Partnership/LLP
£24 per month (excl. VAT)
Limited Company
£29 per month (excl. VAT)
FreeAgent is currently offering new customers 50% off their first six months, and you can get started with a free 30-day trial.
Conclusions
With all of the options for small business accounting and payroll software on the market you might be wondering how on earth you’re going to choose the right one for your business. Not to worry it’s not as impossible as you think. This article offers a comprehensive breakdown on the best ways to find the best small business software and why it is one of the primary things that beginners need to understand when they go out and search for platforms and solutions for their business and start-up ventures.