Even the smallest business will benefit from using accounting software rather than spreadsheets or a paper-based system. Not only does it make staying on top your company finances easier, but it also enables you to prepare and submit your tax and VAT returns faster.

But, with so many packages on the market, how do you choose one that’s right for your business?

Essentially all the best accounting software packages are designed to help you manage expenses and income, send invoices and generate financial reports about your business. However, there are specific features you may want look out for. For instance, do you want a cloud-based (Software-as-a-Service — SaaS) or desktop solution?

Most people will want to choose the best online accounting software as this gives the flexibility to work on your bookkeeping at anytime and from anywhere, making it simpler to run a business remotely.

If you have little accounting knowledge, you will probably prefer a package that is more intuitive, as you won’t want to spend lots of time setting up your system or searching for essential functions.


The best accounting software UK 2019

Being able to send recurring invoices and overdue notifications automatically are great time-saving features, as is the ability to turn quotes into invoices with just a click or two, though it’s not a feature of all small business accounting software. Similarly, programs that update information in real time will eliminate the need to manually input new information.

Dashboards that collate different metrics are perfect for providing an at-a-glance snapshot of your business finances, and something that you may want to look out for in the package you choose.


Best accounting software for medium-sized business UK

Being able to process ingoing and outgoing payments along with payroll will also make life much easier, while third-party integration will work well for larger businesses that need to connect with POS systems, ecommerce, ERP, CRM, email marketing and Google apps. Again, something that not every package offers.

For manufacturers, an inventory-tracking function enables monitoring of stock levels, while consultants and service providers will want to look for a time-tracking feature to easily record and invoice billable hours.

One function that nearly every business will find useful when choosing the best accounting software package is tax preparation — being able to automatically calculate your tax and submit your statutory returns to HMRC is a great function to look out for.


Which small business accounting software is best for you?

So, which should you go for? Here’s a quick assessment of some of the best small business accounting software.

Sage One — Best small business accounting software UK

Suited to start-ups, small businesses, freelancers or anyone who just needs a simple accounting system with invoice, tax assistance, and profit and loss information. It requires some accounting knowledge but remains fairly easy to use. There is chat, telephone and email support if you need it. Additional support through the Sage Business Community is also available.

Free 30-day trial. For sole traders and small businesses, plans are currently discounted and start at £6 a month.

Free Agent – Best accounting software for self-employed and contractors UK

Geared towards the small business owner, freelancers or contractors without much accounting experience. Easy to use and lets you input as many clients or projects as you need. Multi-user options and time-tracking features make it simple to track remote freelancers who can log in and complete their timesheets. Invoice creation is straightforward, with payment reminders at set dates after bills fall due. One-click reporting creates a self-assessment summary for income tax.

Free 30-day trial. For the first six months, subscriptions start at £9.50 for sole traders and £14.50 a month for limited companies.

Quickbooks — Best accounting software for medium-sized business UK

With QuickBooks, you can download and reconcile credit card transactions, organise weekly timesheets and track bank deposits. Users can take photos of bills and submit them as proof of expense or share with the stakeholder concerned. It offers customisable templates that can be branded with the business logo and desired fields to generate invoices, bills and reports.

Free 30-day trial. The £7 a month is great for the self-employed. The ‘Essentials’ package is £18 a month and offers a full financial management solution for small and medium-sized businesses.

Xero — Best accounting software for e-commerce and larger companies UK

Offers many third-party ecommerce add-ons and 30 different types of reports. There’s a wide range of support available through community, email, training events and webinars, though not phone. Possibly not ideal for those with little or no bookkeeping knowledge.

Free 30-day trial. The basic £10 a month package is limited to five invoices per month.

Clearbooks — Simple cloud accounting software for small business UK

Offers simplified accounting to small businesses. In 2014, it won Best Cloud Accounting Software Suite in the UK Cloud Awards. Very UK-centric, a major plus for many. Generally considered intuitive and simple to use, it has a nice layout and a good selection of features.

Free 30-day trial. Monthly plans start at just £5 a month for the first three months.

Kashflow — Good accounting software for small business

Kashflow has a clear dashboard that includes a business health check score.  Billing is fast and quotes can be turned into invoices with just one click. There are no limits to the number of invoices you send and new customers, suppliers and transactions can be added as needed. Good for submitting VAT returns and there is secure integration with payment card processors like SagePay and Barclaycard. Unlimited telephone support for the first two weeks, after which there is 24/7 email support.

Free 14-day trial. There is a £8 per month starter option. Small businesses plans start £15 per month for larger businesses requiring more functionality.


Best free accounting software for small business UK

If you are a small business, you could also consider one of the free cloud-based solutions such as ClearBooks Micro. Their service may be basic, but it could suit if you have minimal transactions.

Pandle — Best free cloud accounting software

If your needs are still limited but want something with more features as your grow, Pandle may be a viable option for your business. They offer a free forever plan which has unlimited everything except for more advanced features like banks feeds, receipt upload, cash flow forecasts and others which are part of a paid plan for £5 + VAT per month


General Data Protection Regulation (GDPR)

On 25 May 2018, the EU’s General Data Protection Regulation (GDPR) came into effect.. Under this new set of rules, businesses face increased obligations in how they process, manage and store personal information.

Because the UK will still be a member of the EU by that time, UK organisations will need to be prepared for compliance. Making sure the package you choose adheres to the GDPR standards will be most important to avoid hefty fines.


Making Tax Digital

Having an accounting software package in place will be increasingly important as the government rolls out its ‘Making Tax Digital’ initiative. This is aimed at making the UK tax system more effective and taxpayer-friendly. It will enable HMRC to use information they already have or can get elsewhere, for instance from an employer, bank or another government department.

This should make interacting with HMRC less complicated, as well as leading to fewer errors overpayment. If you’re confused about MTD, read our post on the most frequently asked questions about Making Tax Digital.


Choosing the best accounting software for your business

As some platforms may suit you better than others, the only way to be sure what might work for you is to take advantage of the free trials on offer. Select two or three packages, try them and find out what’s right for you.

Before you commit to any one package, you may also want to talk to your accountant. They know your business, so will be well-placed to offer advice on accounting software that best meets your needs.

If you’re looking for an accountant in London to help you sort things out, BrooksCity can help. For more information you can contact us or request a quote directly here.