There are plenty of small business accounting software programs to choose from, but choosing the right one for you and your startup can be a daunting task. Choosing the wrong choice can be a drag on your organization, not to mention that it could limit your growth potential. Finding the right accounting software for you and your company will save you time, boost efficiency and automate processes to help reduce errors.
Here are the best out there!
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.
Ember
Best for expert assistance
Ember is different to every other company on this list – it not only offers accounting software but also 24/7 access to an expert friendly accountant who can help you work out the best financial strategies for your business.
Naturally, you pay a bit more for this. Ember charges a flat fee of £39 per month plus £4 per month per employee on payroll (both excl. VAT). However, as it promises to save you the expense of hiring a dedicated accountant, this price is actually pretty reasonable, and Ember claims that its average user gets back 8.5x what they pay through tax savings.
In short, you not only get powerful accounting software (that can handle everything from invoicing to conducting transactions in multiple currencies), but also expert, personalised insight into tricky things like whether you should pay yourself through dividends or PAYE.
And it already has a growing army of fans – with an outstanding 4.8 rating from 50 Trustpilot reviews – and offers a 30-day free trial so you can see exactly how it can help your business.
£39 per month (excl. VAT)
FreshBooks – $7.50 to $25/month
Why you should buy this:
FreshBooks is a leading small business accounting software firm that offers an assortment of invoicing and bookkeeping tools. FreshBooks’ accounting software accounts for every business transaction, whether online or offline. Freshbooks offers four premium plans with monthly fees starting at just $15 per month.
With Freshbooks, you will have the tools needed to manage and control your time, finances, and transactions better. With its well-organized platform and visual dashboards, you can keep track of all of your money in real-time, all the time.
Freshbooks makes managing your cash flow easier than most other small business accounting software solutions we reviewed, mainly because they offer a dedicated support team that customizes FreshBooks to suit your business. You also get a free 30-day trial to try the software, which means no financial risk for you.
Who is it for:
When it comes to expenses, most small businesses are overwhelmed by the amount of information they need to keep track of. It’s easy to end up duplicating your receipts, and manually entering your payments and other data causes even more confusion and frustration. FreshBooks business accounting software eliminates these problems instantly.
Freshbooks has a clean, user-friendly interface that allows users to easily enter their information and track multiple expense streams. Whether you’re paying for employees, supplies, materials, equipment, or space, Freshbooks has you covered with professional and convenient tracking features. You can even use its advanced expense tracking functionality to set up recurring payments (e.g., retainer payments) and easily track your time, sales, and expenses throughout the year.
Basically, everything that an accountant would need to make sure you’re getting the most deductions against your income, so you end up paying the least amount in taxes — that’s all tracked within the Freshbooks platform.
Why we picked it:
We picked FreshBooks as the best accounting software for small businesses for a few reasons. For one, they have a dedicated onboarding and support team that customizes and sets up the software for your specific business. And, they don’t charge extra for this service.
We also picked this as the best overall small business accounting software because Freshbooks was intentionally developed to fit around your business instead of your business having to fit around the software. This means the software will adapt and scale with your business.
FreshBooks is also feature-rich and integrates seamlessly with Gusto’s payroll service (and we love Gusto as a payroll service).
Price Breakdown:
Lite ($7.50 per month)
- Unlimited customized invoices for five billable clients
- Unlimited expenses tracking, estimates, and time-tracking
- Sales tax and report tracking
- Client profiles and account statements
- Self-service portal for clients
- Scheduled late fees and late payment reminders
- Online credit card payments and ACH transfers
- Business health reports, tax reports, and performance dashboards
- Mobile mileage tracking
- Project budget and billing management
Plus ($12.50 per month)
- All features in the Lite package
- Unlimited customized invoices for 50 billable clients
- Ability to accept e-Signatures
- Unlimited proposals
- Client retainers
- Double-entry accounting reports (including general ledger, trial balance, and chart of accounts)
- Bank reconciliation
- Accountant access features
Premium ($25 per month)
- All features in the Lite and Plus packages
- Unlimited customized invoices for unlimited billable clients
- Customized email templates and signatures
- Automated dynamic client emails
- Accounts payable management
- Project profitability management
Select (Varies)
- All features in the Lite, Plus, and Premium packages
- Removal of FreshBooks branding in client emails
- Lower credit card transaction fees
- Capped ACH fees
- Subscription-based payments – a combo of recurring billing and automation
- Over-the-phone credit card payments
- Secure Card Storage for client profiles
- Ability to charge client credit cards
- Includes two team member accounts
- Account manager
- Customized onboarding services
- Data migration services
- Advanced payment capabilities
Pros and Cons:
Pros:
- Full service and support right out of the gate
- Full customization to meet the needs of your business
- Free migration from any other business accounting software
- Thorough onboarding and training
- Deep business analytics and insights (measure and track your success)
- Real-time inventory tracking (unlimited inventory tracking and invoicing)
- Easy data entry and journal entry updates
- Time tracking (great for tracking retainer hours)
- Multiple app integrations
- Keep up with products and services
- Cloud-based (manage your financials entirely online)
- Useful add-ons (e.g., virtual terminal to collect payments from invoices)
- Manage tax and other financial information effortlessly
- Highly praised Android and iOS apps (great for checking financials on the go)
Cons:
- FreshBooks requires talking with a support specialist first before purchasing because they want to help you even before you become a customer (no wonder they’re the best overall accounting software).
Customer Service:
Aside from being the best invoicing software for your small business, Freshbooks offers the best customer service too. Freshbooks’ customers rave about the quality service they receive. On GetApp, FreshBooks averages a 4.6 out of 5 stars. In fact, they have more users than any other small business accounting software, making them a strong contender in the industry.
Visit FreshBooksRead Review
Conclusion
It is always better to go with the accounting software for startups that fit your needs, be it free or paid. There are many names in the market that offer accounting software solutions.