Best Accounting Software for UK Businesses

QuickBooks Online: Best overall UK accounting software

Intuit QuickBooks Online is the gold standard for accounting software. With five plan tiers ranging from a self-service, self-employment plan to a corporate-level, highly customisable plan, it’s extremely scalable. It’s also extremely user friendly, which makes it an ideal starting software for first-time business owners without a background in accounting.

As a cloud-based accounting solution, QuickBooks Online can be securely accessed from any web-enabled device. Its mobile accounting app is also more fully featured than those of many competitors. You can use it to scan receipts, track expenses, track mileage, send invoices, collect customer payments and more.

For more information, read our complete QuickBooks Online review.

Pricing

Intuit QuickBooks only has five plans, all of which are available to new customers at a 50% discount for six months:

• QuickBooks Self-Employed: £10 per month (excluding VAT). Ideal for sole traders not registered for VAT.
• QuickBooks Simple Start:  £14 per month (excluding VAT). Ideal for small or director-only businesses in need of VAT and income tax management.
• QuickBooks Essentials:  £24 per month (excluding VAT). Ideal for small businesses with suppliers.
• QuickBooks Plus: £34 per month (excluding VAT). Ideal for midsize businesses.
• QuickBooks Advanced: £70 per month (excluding VAT). Ideal for midsize and big businesses that need customised reports and permissions.

UK companies can opt to pay annually rather than monthly for additional savings.

Each QuickBooks Online plan limits you to adding a set number of users. Self-Employed and Simple Start include free access for one user, Essentials for three users, Plus for five users and Advanced for 25 users. Unlike top QuickBooks competitors like Zoho Books and FreshBooks, the company doesn’t usually let businesses add extra users, even for a monthly fee.

Top features

• Syncs seamlessly with QuickBooks Payroll (starting at an additional £2 per month).
• Key accounting features like Income Tax estimates, Self-Assessment preparation and direct-to-HMRC VAT submission.
• Invoicing and billing, including one-click in-invoice customer payments.
• Cash flow forecasting.
• Free onboarding session and online chat support.
• Advanced features like employee time tracking, stock management, project profitability and budgeting.

QuickBooks’ top third-party integrations include PayPal, Acuity, Sage Construction Management, Dext Commerce and hundreds more.

Pros and Cons

Xero: Most user-friendly software

As user-friendly as QuickBooks Online is, Xero’s accounting software is even easier to set up and use. It’s also a more collaborative platform: Each plan includes an unlimited number of users (for most features — a handful of accounting features cost an extra per-user fee). Most importantly for small-business owners, Xero includes some advanced features like stock management and VAT calculation and filing with each plan.

However, Xero charges an extra per-user fee for some essential features that its competitors include free. For instance, Xero’s expense tracking tool (which includes employee expense reimbursement, receipt scanning and mileage tracking) is only available at an additional fee with all but the most expensive Xero plan.

On the other hand, Xero Ultimate — Xero’s most expensive and advanced plan — is £15 cheaper per month than QuickBooks’ priciest plan. It also packs in more features, including more affordable payroll. So while Xero’s cheaper plans aren’t as budget-friendly for small businesses, especially compared to top Xero competitors like Zoho Books or QuickBooks Online, its higher-tier plans are ideal for growing businesses looking for affordable accounting.

For more information, read our complete Xero accounting review.

Pricing

Xero has four plans plus an optional payroll add-on tool. (In our opinion, Xero Payroll is one of the best payroll software solutions for many UK-based businesses.) Plans start at the following price points:

• Xero Starter: £15 per month (excluding VAT). Limits users to 20 invoices/quotes per month and five bills per month.
• Xero Standard: £30 per month (excluding VAT). Includes Xero Starter features + unlimited billing and invoicing.
• Xero Premium: £42 per month (excluding VAT). Includes Xero Standard features + multi-currency support.
• Xero Ultimate: £55 per month (excluding VAT). Includes built-in payroll for up to 10 employees + £1 per month for each additional employee.

Apart from Xero Ultimate, which includes the following features free for up to five users, Xero offers the following services at an additional monthly fee:

• Expense tracking: First two months free, then £2.50 per month per active user.
• Project tracking: First three months free, then £5 per month per active user.
• Advanced analytics: First four months free, then £5 per month.
• Payroll: First two months free, then £5 per month for up to five employees + £1 per month for each additional employee.

Features

• Connects with more than 21,000 financial institutions for easy bank feed syncing and transaction tracking.
• Direct-from-invoice payment acceptance with built-in credit card, debit card and direct debit payment options.
• Online file storage for bills, contacts, receipts and other documents with secure sharing.
• Easy-to-generate accounting reports with real-time accountant or bookkeeper collaboration.
• Free data import for former Sage and QuickBooks users.
• Easy in-app access to bookkeepers and accountants in Xero’s directory.
• Multi-currency support for 160+ local currencies (available with Xero Premium and Ultimate).

Xero integrates with over a thousand third-party apps, including several expense tracking, project tracking and reporting tools that may be available at a lower cost than Xero’s add-on fee. Top Xero integrations include ApprovalMax, Ignition, Shopify, Invoice Away, Square, GoCardless and many more.

Pros and cons

Sage 50: Best built-in payroll tool

Sage 50 Accounting is an expansive desktop-based tool. While the software is locally installed, it includes cloud capabilities for easy anywhere access and collaboration. Both of the two Sage 50 accounting plans are exceptionally fully featured with tools like bespoke reporting, stock management, cash flow tracking and supplier payments — bookkeeping features that providers like Xero and QuickBooks typically relegate to their higher-tier plans only.

SEE: Best Practices for Choosing the Right Accounting Software (TechRepublic)

However, Sage 50 is much, much pricier than comparable small-business accounting software. While Sage’s features definitely justify the cost, it’s not an affordable solution for budget-conscious small businesses. Additionally, Sage isn’t compatible with Mac operating systems (iOS). It only runs on Windows, meaning Mac users will need to install Windows OS on their desktop computer to run Sage.

But if you have the budget and computer software for it, Sage 50 is a solid solution for growing businesses, especially those with employees. Sage’s built-in payroll solution has more features and better automation than nearly any other UK payroll provider.

For more information, read our Sage Accounting review.

Pricing

Sage 50 is definitely one of the more expensive accounting solutions on the market. Its two plans start at the following prices:

• Sage 50 Accounts Standard: £92 per month (excluding VAT). Comprehensive accounting features + multi-business management.
• Sage 50 Accounts Professional: £186 per month (excluding VAT). Sage Standard features + advanced customisations, stock management, reporting, multi-currency management and more.

New customers can try either plan free for 30 days. Sage doesn’t clearly list how many user licences are included with each plan, but it does clarify that additional users can be added for a monthly fee.

Features

• Straightforward cash flow management.
• Advanced stock management.
• Built-in integration with Sage Payroll.
• Bespoke reports.
• Multi-currency support.
• Multi-business management.

Pros and cons

FreeAgent: Most affordable accounting software

FreeAgent’s all-in-one payroll and accounting software was built specifically for small businesses with up to 10 full-time employees. Although FreeAgent’s software is fairly bare bones, it has the basic tools small businesses need to track finances, pay employees, file taxes and bill customers.

In stark contrast to pricy software like Sage 50, FreeAgent’s cheap accounting software starts at less than £10 per month (excluding VAT). It’s also available free for customers who maintain business bank accounts at NatWast, Royal Bank of Scotland and Ulster Bank.

Even if you don’t qualify for a free FreeAgent plan, the software stays comparatively affordable and has plenty of built-in discounts. All new customers get 50% off FreeAgent’s base price for six months if paid month to month. If you opt for an annual plan instead, you’ll get 50% off for a full year.

Pricing

FreeAgent is free for users who have business bank accounts at the following establishments:

• NatWest.
• Royal Bank of Scotland.
• Ulster Bank.

You can also access FreeAgent free if you make at least one transaction with a Mettle bank account each month.

If you don’t qualify for free plan access, FreeAgent’s paid plans are broken down by business type:

• Sole trader: £9.50 per month (excluding VAT) for six months, then £19 per month + VAT.
• Partnership or LLP: £12 per month (excluding VAT) for six months, then £24 per month + VAT.
• Limited company: £14.50 per month (excluding VAT) for six months, then £29 per month + VAT.

FreeAgent also offers a plan for landlords that costs £5 per month or £50 for a full year.

All plans include a 30-day free trial and 50% off for six months. New customers can opt to pay year to year instead of month to month to lock in 50% off for a full year.

FreeAgent includes payroll features at no additional charge, but it does have optional add-on features available for an extra monthly fee:

• Smart Capture Unlimited (receipt scanning for more than 10 receipts per month): £5 per month + VAT.
• Amazon account integration: £6 per month + VAT. (Amazon integration is free for customers until 30 April 2024, at which point the monthly surcharge will be added.)

Features

• Basic accounting features like Self-Assessment preparation, VAT filing, invoices, expense tracking and estimates.
• Smart Capture receipt scanning for up to 10 receipts per month (unlimited receipt scans available for additional fee).
• Project and time tracking.
• Stock management.
• Built-in HMRC-compliant payroll tool at no extra charge.

FreeAgent integrates fully with dozens of popular third-party apps, including Stripe, Amazon, Billsby, PayPal, BrightPay and more. You can also use Zapier to sync FreeAgent with any business software that currently lacks a native FreeAgent integration.

Pros and cons

Zoho Books: Most accounting features

Zoho Books has six plans that support businesses of all sizes, making it the most scalable accounting software provider on our list. Sole traders can start out using Zoho Books’ free plan as they build their client base, get used to business taxes and gather enough financial data to make calculated business decisions.

From there, business owners can scale up to more advanced Zoho Books plans with accounting tools for midsize businesses and some enterprises. These plans include additional advanced features, levels of support, user limits and customisations.

SEE: Vendor comparison: Small business financial accounting software (TechRepublic Premium)

Zoho Books is just one of Zoho’s full suite of business products, which include Zoho Expense, Zoho Invoice, Zoho People, Zoho Inventory and many more. Zoho’s impressive list of tools can help you manage just about every aspect of your business all within the same integrated system, which makes Zoho a good investment if you like its interface and automations.

For more information, read our complete Zoho Books review.

Pricing

Zoho Books has a completely free plan for businesses with an annual revenue below £35K GBP. The plan is free for however long your revenue remains below that amount.

Zoho Books’ paid plans start at the following price points:

• Zoho Books Standard: £10 per month (excluding VAT) billed annually or £12 per month (excluding VAT) billed monthly.
• Zoho Books Professional: £20 per month (excluding VAT) billed annually or £24 per month (excluding VAT) billed monthly.
• Zoho Books Premium: £25 per month (excluding VAT) billed annually or £30 per month (excluding VAT) billed monthly.
• Zoho Books Elite: £85 per month (excluding VAT) billed annually or £99 per month (excluding VAT) billed monthly.
• Zoho Books Ultimate: £165 per month (excluding VAT) billed annually or £199 per month (excluding VAT) billed monthly.

If you want to add more users beyond your preferred plan’s limits, you can do so for £2 per user per month when billed annually.

Features

• Free accountant access with every plan.
• Online and offline payment acceptance.
• Multi-lingual invoicing options with all plans and multi-currency support with all but the two cheapest plans.
• VAT tracking, returns and MTD filing.
• Advanced features like custom reports and analytics, vendor credits, retainer invoices, task tracking within project tracking and more.
• Optional payroll through integration with KeyPay.

The number of integrations you can access with your Zoho Books plan depends on which plan you choose. Zoho’s free plan syncs with most, but not all, other Zoho products, as well as with Google Drive, Slack, Stripe, PayPal, GoCardless and more. Higher-tier plans introduce more Zoho suite integrations as well as third-party apps like Uber, Zendesk, Square, Braintree and Twilio.

Pros and cons

FreshBooks: Best invoicing service

If you generate most of your money by invoicing customers, FreshBooks could be a good accounting software choice for you. FreshBooks’ easy-to-generate invoices include automations like quote-to-invoice conversion, recurring invoicing, overdue payment reminders and scheduled late fees. You can also track time by project, then sync that information directly to the invoice to ensure you and your clients are on the same page about what you’re owed.

Apart from its priciest plan, which includes free access for two users, FreshBooks limits each plan to just one user. Every additional user costs a monthly fee, which makes Xero, QuickBooks and Zoho Books cheaper options for businesses that collaborate on finances.

For more information, read our complete FreshBooks review.

Pricing

FreshBooks has three plans with transparent upfront pricing and one enterprise-level plan that requires customers to request a custom quote:

• FreshBooks Lite: £15 per month (excluding VAT).
• FreshBooks Plus: £25 per month (excluding VAT).
• FreshBooks Plus: £35 per month (excluding VAT).
• FreshBooks Select: Custom pricing only.

Customers can save 10% by opting to pay annually instead of month to month. FreshBooks also tends to run frequent discounts and sales. For instance, its end-of-year discounts often run as high as 75% off for three months (or 85% off for three months if you pay annually). Customers can also sign up for a 30-day free trial, though doing so waives any access to discounts.

FreshBooks doesn’t have many add-on fees beyond a per-user fee of £8 per extra user per month. However, since FreshBooks includes just one user licence per plan, additional user costs will add up quickly for collaborative businesses.

Features

• Fully automated invoicing features, including scheduled late payment fees, recurring invoicing and late payment reminders.
• Project-based budgeting and billing.
• Online credit card payment acceptance.
• Unlimited expense tracking and time tracking.
• Accounts payable with two priciest plans.
• Dedicated account manager, data migration and personalised onboarding experience with FreshBooks Select.

FreshBooks doesn’t integrate with as many third-party apps as Xero or QuickBooks, but it does offer native integrations with 100+ business apps. Popular FreshBooks app integrations include Square, Stripe, Payescape and Trello. FreshBooks also integrates with Gusto and BrightPay for payroll.

Pros and cons