Best Accounting Software for Small Business UK Needs – Top 10 Tools Compared for 2024

The best accounting software for small business owners in the UK is FreshBooks. This is thanks to its inventory management, income and expense tracking, and online accounting service. It’s also one of the most affordable accounting software for UK businesses.

Online small business accounting tools can help you cut costs since they’re cheaper than hiring an accountant, and they simplify expense tracking and tax affairs. Small businesses in the UK also need the analytics these solutions offer to monitor their financial health.

The Top 10 UK Small Business Accounting Tools

Picking the right accounting software for your business depends on your needs and preferences and whether you need a specific set of tools or an all-in-one package. To help you make an informed purchase, we’ve outlined what each product excels at on our list:

  1. FreshBooks — Best accounting software for small businesses in the UK overall
  2. Oracle NetSuite — Best for scale-ups and growing businesses
  3. Zoho Accounting — Best accounting tool for beginners
  4. Xero — Best for advanced analytics
  5. Bonsai — Best all-in-one for small businesses
  6. Sage — Best for data management
  7. QuickBooks — Best option for budget-conscious companies
  8. Melio — Best free-to-use accounting software
  9. Wave — Best for combined accounting and payroll
  10. Xendoo — Best for dedicated bookkeeping team

Reviews of the Best Online Accounting Software for Small Businesses

Here, we’ll take a closer look at each accounting software provider and its unique features to help you make an informed decision.

1. FreshBooks — Overall, the Best Accounting Software UK

best accounting software for small business

Starting Price

Free Version

Top 3 Features

Payroll Included

£9.60/month

✅ 30-day Free Trial

  • Client Account Portal
  • Unlimited Time-Tracking
  • Business Health Reports

❌ Requires integrations

FreshBooks stands out as the best overall accounting software for small businesses in the UK. Its comprehensive accounting features, including expense and inventory tracking, project management, multi-currency support, and collaborative tools, outperform competitors like QuickBooks and Xero.

One highlight of FreshBooks is its approach to invoicing. Unlike Zoho, which offers invoicing but lacks the depth of customisation, FreshBooks allows you to create professional-looking customisable invoices that you can tailor to suit your unique business. From branding to a personalised thank you message for each customer and automatic invoice reminders, all its advanced features are accessible directly from the platform, minimising the hassle of chasing overdue payments.

If you already have an accountant for your business, FreshBooks lets you invite up to ten accountant team members to your account for no extra cost, compared to Xero where you’ll have to pay an additional fee for the same feature. That makes it an exceptional long-term investment for growing small businesses.

Apart from its easy-to-master interface, FreshBooks offers exceptional customer support, too. In addition, it offers a help centre full of helpful guides and tips for new and advanced users.

Learn more in our FreshBooks review.

Key Features

  • Client Account Portal — An exceptional feature for clients to access invoices, estimates, and proposals directly from the accounting app. It also improves collaboration by allowing them to add comments, getting them invested in the project’s progress.
  • Unlimited Time-Tracking — Automatically log hours towards a project or a client and add them to an invoice for easy billing. This feature lets you view daily, weekly, and monthly breakdowns of your team’s productivity.
  • Business Health Reports — Use real-time financial data and powerful insights to make better decisions and analyse the health of your business. You can export or download this data for accountant use and filter it by client, team member, or date for a more detailed look at your financial health.

Pricing

FreshBooks focuses on small businesses and freelancers, offering various choices depending on your needs. Each plan supports access from anywhere via dedicated iOS and Android apps and unlimited expense tracking, estimates, and tax summaries.

  • Lite – £7.50/monthly
  • Plus – £12.50/monthly
  • Premium – £17.50/monthly
  • Select – Bespoke pricing

In addition, you can try its services risk-free for a month with the free trial.

prosPros

  • Full double-entry accounting system
  • User-friendly interface
  • Integrates with many popular services
  • Mobile mileage tracking
  • Detailed revenue, tax, and expense reports

consCons 

  • Dedicated mobile apps lack some advanced features

2. Oracle NetSuite — Best for Growing Businesses

best accounting software for small business UK

Starting Price

Free Version

Top 3 Features

Payroll Included

Custom

  • Cash Management
  • Payment Management
  • SuiteTax

❌ Requires add-ons

Oracle NetSuite is the best option for scale-ups and growing businesses as it’s one of the market’s best enterprise resource planning (ERP) solutions. It offers exceptional accounting software for small-to-midsize businesses and you can customise the software to suit your needs and priorities by opting for different add-ons and advanced features.

For example, you can use it to manage your eCommerce platforms and accounting software from a single platform or add features you’d find with some of the best enterprise CRMs for a centralised source of truth. If you’re running an online store, you’ll find its seamless connectivity with platforms like Shopify, WooCommerce, or Amazon invaluable.

Plus, it gives you and your team real-time access to financial data from anywhere with an internet connection, making it excellent for businesses with remote teams or multiple locations.

Oracle NetSuite offers excellent accounts receivable (AR) features that allow you to easily and quickly generate and send invoices, manage collections, or define credit terms. That helps you shorten the credit-to-cash cycle and capitalise on new opportunities.

Compared to Zoho and Melio, NetSuite’s interface has a slight learning curve. However, mastering it allows you to check the status of receivables anytime, at the macro levels or down to individual customers and invoices.

Learn more in our Oracle NetSuite review.

Key Features

  • Cash Management — Get real-time bank data to accelerate the reconciliation process and boost your accounting team’s efficiency. The automation of imports ensures a precise image of your current cash position, letting you optimise working capital and forecast cash requirements.
  • Payment Management — Oracle NetSuite helps you with flexible options for making and receiving payments, saving you time, reducing processing costs, and improving cash flow.
  • SuiteTax — This feature is a configurable tax engine that delivers end-to-end global tax management. It allows your finance team to generate detailed reports and analyse transactions down to line-item tax details.

Pricing

Oracle NetSuite doesn’t publicly disclose the pricing of its services, meaning you’ll have to contact its sales department for a quote. While the cost of your annual NetSuite license depends on whether you have multiple users and optional modules, there’s also a one-time implementation fee for the initial setup.

prosPros

  • Scalable solution with numerous add-ons
  • Excellent fixed assets management features
  • Modular pricing
  • Inventory margin insights
  • Real-time metrics

consCons 

  • No free trial and lack of price transparency

3. Zoho Accounting — Best Beginner-Friendly Accounting Solution for Small Businesses

best online accounting software for small business

Starting Price

Free Version

Top 3 Features

Payroll Included

£10/month

✅ Free Forever Plan

  • Customizable Quotes
  • Recurring Bills
  • Auto-Scan

❌ Requires add-ons

Zoho Accounting is our choice for a beginner-friendly accounting tool that also has an exceptional free plan. One of its standout features is its simplicity, which allows small business owners to manage their financial operations effectively with no background in finance. This also makes it an attractive pick for freelancers, sole traders, self-employed entrepreneurs, and very small businesses in the UK.

Like NetSuite, Zoho is an end-to-end accounting service. That means streamlining the billing process and accelerating the collection of payments, improving cash flow. It also helps you capture and categorise expenses, meaning you’ll always be ready for tax season with a clear view of business expenditures.

Zoho Accounting is ideal for businesses with fast-moving items in their inventory, as it can track your stock and automate purchase orders from vendors or send reordering alerts.

It offers ample customisation to help your team identify and manage the goods, including vendor details, costs, stock-on-hand, and product images. In addition, your team members can adjust your inventory when stock gets damaged or lost, simplifying shelf counts.

Besides traditional accounting features, Zoho Accounting offers some of the best project management tools. Depending on your plan, Zoho lets you assign and manage multiple tasks and projects, significantly improving team collaboration.

Learn more in our Zoho review.

Key Features

  • Customisable Quotes — Zoho Accounting provides a massive gallery of customisable templates to create branded quotes. In addition, it lets you digitally sign quotes before sending them to customers to improve the security of your documents.
  • Recurring Bills — It allows you to create recurring bills for purchases that happen at intervals and automates the sending process. So you can forget about creating bills each time for regular customers, saving time and improving efficiency.
  • Auto-Scan — A convenient feature that captures the details of a document automatically, allowing you to convert them into an invoice, bill, expense, sales order, or purchase order.

Pricing

Zoho Accounting has a plan for everyone, from freelancers to large businesses. It’s one of the most generous accounting services when it comes to limits on invoices, as even its free users can create up to 1,000 invoices per annum. Although there’s a limit to the user number with each plan, Zoho lets you add more users and branches via add-ons.

prosPros

  • Excellent mobile apps
  • Comprehensive free plan
  • Feature-rich
  • Workflow rules
  • Superb live chat support for all paid plans

consCons 

  • Limited integrations

4. Xero — Best Accounting Tool for Advanced Analytics

best accounting software for small limited company UK

Starting Price

Free Version

Top 3 Features

Payroll Included

£14/month

30-day free trial

  • Instant Conversions
  • Safe Storage
  • Online Invoicing

❌ Requires add-ons

Xero excels at providing visual representations of your business’s health via its advanced analytics features. You can access the short-term cash flow screen, business snapshot, and the Xero Analytics Plus add-on.

Short-term cash flow projections provide a simple overview of your business bank balance, including cash flow for the next week or month, to help you understand the impact of paying a bill today instead of delaying it, allowing you to make better business decisions.

Upgrading to its Xero Analytics Plus add-on pack grants you access to some of the most advanced analytics features in the industry. From deep insights into your business health to AI-powered predictions for cash flow decisions, this add-on ensures you know what to expect with each investment. While tools like Sage and NetSuite offer great reporting, Xero has the edge.

In addition, it lets you manage future events with basic scenario planning and automatically view the impact of your business’s VAT requirements, sourced directly from HMRC, to see how this affects your cash position. With all the advanced options Xero offers, it’s not the best option for beginners who would benefit from a platform like FreshBooks, Zoho, or Melio.

It’s also worth mentioning that Xero offers some of the best accounting software security. It encrypts all data you entrust to the company on its secure servers. Its data centres have robust physical security controls, and you’ll find multi-factor and Two-Factor Authentication options for your account.

Learn more in our Xero review.

Key Features

  • Instant Conversions — Xero helps you pay and get paid in over 160 currencies with multi-currency accounting and automatically converts international transactions. You can view transaction reports in local or foreign currencies and see how currency markets affect cash flow or profit.
  • Safe Storage — You can use Xero as an online file storage for your bills, receipts, documents, and contracts. That helps you quickly find them when necessary or share them with your accountant with a single click.
  • Online Invoicing — It lets you create and send invoices from your desktop or the Xero mobile app, and it lets you offer various payment solutions to your customers, including debit and credit cards and direct debit

Pricing

Xero isn’t the cheapest accounting software this year, but its feature-rich plans justify the cost. Unlike most of its competition, Xero offers two months of free access to its payroll add-on to its first-time users in the UK.

That gives you plenty of time to test it before committing. In addition, you can try its Analytics Plus add-on for free during the first four months of your subscription.

prosPros

  • Modern interface
  • Feature-rich plans
  • Excellent mobile apps
  • Secure cloud backup

consCons 

  • There’s a steep learning curve

5. Bonsai — Best All-in-One Accounting Services for Small Businesses

accounting software for small business

Starting Price Free Version Top 3 Features Payroll Included
£13/month ✅ 7-day free trial
  • Time Tracking
  • Global Payments
  • Profit and Loss Tracking
❌ Requires integrations

Bonsai is the best all-in-one tool for managing your projects, finance, and client relationships with excellent streamlined invoicing. Besides accounting, its comprehensive set of features makes it one of the best workflow management tools in the industry.

Its flexible invoicing features allow you to create invoices in seconds and set up simple payment methods for your clients. Like with FreshBooks, you can choose from hundreds of invoice templates and customise them with special payment terms, invoice line items, and conditions.

In addition, it handles payment reminders so you don’t need to chase invoices and allows you to set up recurring payments.

Bonsai excels at tracking expenses by auto-importing them from your business bank account and categorising them. It also automatically identifies deductible expenses to save you money at tax time and lets you track them via its web and mobile apps.

As an all-in-one solution, Bonsai provides numerous CRM (customer relationship management) features. One highlight is its client portal which helps you onboard and retain customers and improve your client relationships. This centralised platform also helps record communication, share important work documents, and monitor all finance-related tasks and to-dos with each client.

Learn more in our Bonsai review.

Key Features

  • Time Tracking — Bonsai helps you get paid for every minute spent on client work. It tracks your time on projects and specific tasks and automatically adds them to your invoices.
  • Global Payments — With support for global payments in 100+ currencies, Bonsai helps you get paid no matter where your clients are.
  • Profit and Loss Tracking — Bonsai lets you track your profit for different times of the year and view your income and expense totals.

Pricing

Bonsai offers three different plans with varying features and usage limits and a weeklong free trial for its first-time users, which is less than the industry standard of 30 days.

Unlike most of its competition, though, Bonsai lets you invite collaborators for free — but giving partners and accountants access costs £7/month per user.

prosPros

  • Hundreds of invoice and contract templates
  • Excellent finance tracking features
  • No questions asked, 14-day money-back guarantee
  • Transparent pricing

consCons 

  • No inventory management

6. Sage — Best for Data Management

cloud accounting software

Starting Price

Free Version

Top 3 Features

Payroll Included

£14/month

✅ 30-day free trial

  • Business Reporting
  • Safe Storage
  • Receipt Capture

❌ Requires add-ons

Sage is the best accounting software for small business owners and sole traders in the UK that analyse a lot of data. Its excellent automation capabilities make it an ideal tool for small teams looking to improve efficiency.

From automating transaction imports from various sources like banks to data entry, Sage will minimize errors and enhance data accuracy. Besides making invoices and receipts a breeze, Sage excels at Making Tax Digital (MTD) compliance, too.

With detailed VAT reports showing payments or refunds and clearing your liabilities, you’re always ready for any future checks. It lets you access real-time VAT totals to see how much you owe and helps you share that data with your accountant with a single click.

This small business accounting software solution also excels at helping you with time management, as you’ll see a significant reduction in your admin hours. In addition, connecting and automating your banking via Sage means the accounts software will automatically categorize and store all your transactions in one place.

You can find its multi-currency support and invoicing feature in its most expensive plan, making it an ideal pick for growing SMBs with a global audience but one of the more costly picks for smaller enterprises that require this feature.

Learn more in our Sage review.

Key Features

  • Business Reporting — Sage offers invaluable insight into past and current trends in your company’s performance via its versatile financial reports. It covers balance sheet data, cash flow statements, sales tax reports, and profit analysis, allowing you to make better business decisions to grow your business.
  • Inventory Tracking — You’ll appreciate Sage’s real-time view of your stock levels and customizable inventory data. You can organize your products into categories, track their quantities, set minimum reorder levels, and receive out-of-stock alerts.
  • Receipt Capture — Its automated receipt capture helps you streamline the process of tracking and recording expenses. Sage uses optical character recognition (OCR) to extract relevant information from photos, meaning you’ll just need to upload pictures of receipts instead of manually entering the data.

Pricing

Getting started with Sage costs £14/month for its starter plan that supports one user and some handy features, making it ideal for self-employed business owners and freelancers.

We suggest opting for its Plus plan if you’re running a growing business, as it has the most advanced features and flexibility. However, if you require accounting and payroll software, you’ll need to invest £8/month more to unlock its payroll features.

prosPros

  • Seamless integration with third-party apps
  • Fully HMRC compliant
  • Superb reporting features
  • Recurring invoices are easy to set up

consCons 

  • Dated interface

7. QuickBooks — Best Go-To Budget-Friendly UK Accounting Software

online accounting for small business

Starting Price

Free Version

Top 3 Features

Payroll Included

£10/month

✅ 30-day free trial

  • VAT Error Checker
  • Income and Expenses Management
  • Free Onboarding

❌ Requires add-ons

QuickBooks is our pick for freelancers and SMBs looking for plenty of features at an affordable price. It’s also one of the most popular solutions used by bookkeepers and accountants in the UK, making it easy to let your staff access your files as they most likely already have experience with this accounting tool.

If you’re looking to set up payroll and accounting software simultaneously, QuickBooks offers one of the cheapest payroll add-ons in the industry at just £2/month for each plan besides the Self-Employed plan. Its payroll add-on ensures your pay runs and pension submissions are correct because it’s constantly updated to comply with HMRC’s changes.

QuickBooks, Like FreshBooks and Melio, is one of the most straightforward accounting tools to implement and connect to your business, as it automatically imports and categorises previous transactions once you connect your bank account to the software.

With some of its more expensive plans, its data organisation capabilities extend to projects, billing hours, and stock management, preventing common data silo problems small businesses face.

While its interface may have a slight learning curve, it’s easier to get to grips with than Xero. QuickBooks is also an excellent pick for accounting on the move with its comprehensive mobile apps. They provide most of the features of its online platform, making activities like receipt capture or mileage tracking available for convenient recordkeeping.

Learn more in our QuickBooks review.

Key Features

  • VAT Error Checker — An excellent feature that spots common errors and helps you submit your return to HMRC confidently.
  • Income and Expenses Management — It lets you import all your bank accounts, PayPal, and credit card transactions and separates personal and business transactions. You can sort these transactions into categories ready for tax season and add special notes or reminders.
  • Free Onboarding — Unlike most of its competition, QuickBooks assigns one of its experts to walk you through key features and answer your questions for 45 minutes. This feature is available for each plan and helps you get comfortable with its interface and functions.

Pricing

QuickBooks offers five subscription tiers for all types of business. From the cheapest tier for sole traders to its most expensive plan for growing businesses, QuickBooks lets you test its features risk-free for a month before committing to a subscription.

prosPros

  • Excellent expense tracking features
  • Widely used by bookkeepers and accountants
  • Numerous add-ons and integrations
  • Superb phone and live chat support

consCons 

  • Limited users with each plan

8. Melio — Best Free to Use Accounting Software

Starting Price

Free Version

Top 3 Features

Payroll Included

Transaction fee-based

✅ Free to use

  • International Payments
  • Dedicated Mobile App
  • Bill Capture

Melio is free to use and only charges per transaction and simplifies accounts payable by allowing businesses to manage and pay their bills in one place. It offers various payment methods, including ACH transfers and credit cards, even if the recipient doesn’t accept electronic payments.

This flexibility is invaluable for businesses dealing with vendors with varying payment preferences. It lets you pay your vendors in various ways, including multi-bill, split bills, or recurring payments. That means you can follow through with any deal while storing the information on its software in its original form. For example, you can set up partial, monthly, or seasonal payments or pay multiple bills to the same vendor with a click.

Melio stands out with its approval workflows that help your team manage the company’s accounts payable. It allows you to set up payment responsibilities for your team, leaving no room for errors and bottlenecks.

Like FreshBooks, this is available for free and lets you invite your accountants, bookkeepers, and other team members. In addition, you can set up their roles and review and approve their actions before payments go through.

However, while it excels at payment management, Melio doesn’t offer as many features as Zoho or Bonsai, but it does seamlessly integrate and complement other software on our list, including QuickBooks and Xero.

Learn more in our Melio review.

Key Features

  • International Payments — Melio helps you keep your payments in order regardless of your vendors’ locations. It lets you make single or batch payments to domestic and international vendors from its dashboard.
  • Dedicated Mobile App — Make payments and approve or decline payments from your phone wherever you are. Its app also supports payment reminders to prevent bottlenecks in your business.
  • Bill Capture — Manually enter the details, take a photo, or upload a file to your Melio dashboard. Its AI technology will automatically grab all the relevant information you need to schedule the payment.

Pricing

Melio is free to set up and use and has transparent fees for your business transactions. ACH bank transfers are free or have a 1% fee if you select same-day delivery, while international payments have a flat fee of £15.7.

Melio will mail your check for £1.18, while fast checks cost £15.7, but the first two checks each month are free. Lastly, paying by card has a 2.9% fee.

prosPros

  • Simplified payments
  • User-friendly interface
  • Vendor management

consCons 

  • Less suitable for complex businesses

9. Wave — Best for Combined Accounting & Payroll

small business accounting software free UK

Starting Price

Free Version

Top 3 Features

Payroll Included

Free — £31/month for payroll

✅ Free accounting features

  • Invoice Notifications
  • Business Health
  • Double-Entry Accounting

✅ Yes

Wave is ideal for small business owners who want a centralised platform with built-in payroll features. The payroll software seamlessly connects with the rest of its features and functions as a direct deposit of funds to your employees’ or contractors’ bank accounts. Plus, with automated payroll, you’ll do less bookkeeping.

Wave offers its accounting features for free, with no limits on reports and bank connections, making it the best free accounting software for small business owners. In addition, it lets you add unlimited collaborators, accountants, and partners to your account and lets you track income and expenses.

One notable advantage of Wave is its user-friendly interface that makes its features accessible to users without extensive accounting knowledge. However, although its accounting services are free, you shouldn’t expect the feature-rich experience you’d get from our top picks this year.

Unlike most of its competition, though, Wave offers professional counselling and coaching for accounting, payroll, and taxes. Although expensive, these one-on-one sessions can help you master its interface and detect potential bottlenecks in your finance operations, improving efficiency.

Overall, while Wave might not have the same in-depth offering as FreshBooks and QuickBooks, it’s an excellent choice for combined accounting and payroll – for a much lower cost.

Learn more in our Wave review.

Key Features

  • Instant Notifications — Wave lets you know when a client views your invoice or when they get paid, which helps you take timely actions to improve your cash flow.
  • Business Health — Wave’s easy dashboards give you a clear overview of your business’s health, showing monthly or yearly comparisons to allow you to identify cash flow trends.
  • Double-Entry Accounting — This freemium platform uses double-entry accounting software to help your accountants prepare your financial statements and easily detect errors.

Pricing

Invoicing and accounting features are free with Wave, but it’ll charge you £56/year if you want all of its mobile accounting features added to your account. Payroll features cost £31/month and an additional £4.7 per employee or independent contractor.

It takes 1% per bank payment, or 2.9% + £0.47 per credit card payment. Lastly, its advisors charge £116.8/month to continuously support your business with valuable counselling or a one-time fee of £297.2 for a one-on-one accounting and payroll coaching session.

prosPros

  • Excellent invoice management
  • Multicurrency support
  • Modern dashboard

consCons 

  • Lacks customisation for invoices and records

10. Xendoo — Best for Dedicated Bookkeeping Team

cloud accounting software

Starting Price

Free Version

Top 3 Features

Payroll Included

£278/month

  • Year-Round Tax Support
  • Catch-Up Bookkeeping
  • Onboarding

❌ Requires integrations

Xendoo pairs each business with a dedicated bookkeeping team that handles accounting, bookkeeping, and tax-related tasks. One of its standout features is that it can help your business transition into the digital space, ensuring you’re tax-ready with financial peace of mind, even if you’ve been behind on your bookkeeping for years.

It specialises in eCommerce accounting and connects your sales, inventory tracking, and other financial data for a seamless experience, too. Its team of experts also provides monthly financial reports with precise profit and loss statements and balance sheets.

Xendoo’s human touch sets it apart from competitors like FreshBooks and removes the need to hire an in-house accountant, and makes it an ideal pick for businesses looking for a holistic approach to its financial management.

With a centralised platform and a team of accountants delivering weekly and monthly reports, you’ll have more time to focus on growing your business.

While it lacks some advanced features of our other picks like Xero or QuickBooks, Xendoo seamlessly integrates with other accounting tools and eCommerce platforms.

Learn more in our Xendoo review.

Key Features

  • Year-Round Tax Support — Xendoo ensures you’re always ready for tax deadlines with weekly updates and professional tax consulting.
  • Catch-Up Bookkeeping — Its catch-up experts will effortlessly sort your overdue books and make them tax-ready and up-to-date in short order.
  • Onboarding — In the first 60 minutes of your subscription, Xendoo will help you integrate your other software, including eCommerce platforms or your previous accounting tools.

Pricing

Xendoo offers three plans that suit small-to-midsize businesses. For £309.8/month, its cheapest plan lets you connect up to four bank and credit card accounts, have one integration, and receive weekly bookkeeping reports.

prosPros

  • Affordable pricing for a team of experts
  • Numerous integrations available
  • Ideal for eCommerce businesses

consCons 

  • No free trial
  • Costly compared to others

Comparison of the Best Accounting Software UK Solutions

Here, we’ll compare the best accounting software UK small businesses need to handle their financial management tasks. This quick overview will give you all the details you need to narrow down your options:

Accounting Software

Starting Price

Free Version

Top 3 Features

Payroll Included

FreshBooks

£9.60/month

✅ 30-day Free Trial

  • Client Account Portal
  • Unlimited Time-Tracking
  • Business Health Reports

❌ Requires integration

Oracle NetSuite

Custom Quote

  • Cash Management
  • Payment Management
  • SuiteTax

❌ Requires add-ons

Zoho Accounting

£10/month

✅ Free Forever Plan

  • Customizable Quotes
  • Recurring Bills
  • Auto-Scan

❌ Requires add-ons

Xero

£14/month

✅ 30-day free trial

  • Instant Conversions
  • Safe Storage
  • Online Invoicing

❌ Requires add-ons

Bonsai

£14/month

✅ 30-day free trial

  • Business Reporting
  • Safe Storage
  • Receipt Capture

❌ Requires add-ons

Sage

£13/month

✅ 7-day free trial

  • Time Tracking
  • Global Payments
  • Profit and Loss Tracking

❌ Requires integration

QuickBooks

£10/month

✅ 30-day free trial

  • VAT Error Checker
  • Income and Expenses Management
  • Free Onboarding

❌ Requires add-ons

Melio

Transaction fee-based

✅ Free to use

  • International Payments
  • Dedicated Mobile App
  • Bill Capture

Wave

Free — £31/month for payroll

✅ Free accounting features

  • Invoice Notifications
  • Business Health
  • Double-Entry Accounting

Xendoo

£278/month

  • Year-Round Tax Support
  • Catch-Up Bookkeeping
  • Onboarding

❌ Requires integration

Verdict – What’s the Best Free Accounting Software for Small Businesses UK?

With the advancements in modern technology, we’re seeing an influx of business software that can transform how you operate. There’s no shortage of accounting tools on the market, but finding the right one for your needs isn’t easy.

After thorough testing, we’re confident that FreshBooks offers the best accounting software services for small businesses in the UK at the right price.

It’s an exceptional pick for small business owners looking to streamline their financial management with features like invoicing, expense tracking, and financial reporting. FreshBooks offers a month-long free trial, so try its services risk-free today.

The Difference Between Bookkeeping and Accounting Software

While bookkeeping software focuses on recording and organizing financial transactions, account software encompasses a broader range of functions, including bookkeeping tasks. For example, it won’t just record transactions but analyze, interpret, and present financial information for decision-making.

So, while both bookkeeping and account software can help a small business stay on top of its finances, they serve slightly different purposes and offer distinct features. One crucial difference is in the complexity of these programs. Bookkeeping software may be more user-friendly for small teams or individuals because of its simplicity.

An accounting tool can be more complex due to its broader functionality and advanced features. Its flexibility makes it better for businesses with more intricate financial needs, a larger volume of transactions, and stable growth. That said, most accounting tools incorporate the majority of features found in bookkeeping software.

For example, bookkeeping tools often handle tasks like recording sales, receipts, payments, invoices, and reconciling bank statements. The best small business accounting software will include these features but go further by offering tools for tasks like budgeting, forecasting, payroll processing, and tax preparation.

Ultimately, you should choose accounting software if your needs and the complexity of your business operations require more than just financial transaction recording.

What’s the Best Free Accounting Software for Small Businesses UK?

Wave offers a comprehensive free plan that lets you track income and expenses, create finance reports and invoices, and make unlimited bank and credit card connections. These features cover the basic needs of many small businesses.

In addition, it’s cloud-based, so you’ll have access to your financial data at any time. However, opting for a free accounting tool comes with certain limitations. Premium services like FreshBooks and Oracle NetSuite offer more features, customization, and scalability.

So while a free accounting tool may help small businesses cut costs and complete basic accounting tasks, a premium accounting service is better for growth and long-term usage, as your needs will eventually surpass the capabilities of a free tool like Wave.

How We Rate Small Business Accounting Software

Optimizing financial management is crucial for the success and growth of small businesses in the UK. With a proper accounting tool, you can enhance its accuracy, gain valuable insights for informed decision-making, and streamline financial processes.

Pricing
A good accounting solution should offer good value for money, regardless of whether you’re a sole trader or an enterprise. For small businesses it’s important that you get the features and support you require at a price-point that suits your budget. That’s why we’re always on the lookout for deals, long-term costs, and testing out how the small business accounting software you choose can grow with your business.
Key Features

Accounting software providers have key features that support small business owners in their day-to-day. We test accounting features such as cash flow forecasting, invoicing and credit notes, generating financial reports, and pay-enabled invoices, as well as payroll features and project tracking.

Besides making it easier to enter data, accounting tools can automate data recording, reconciliation, and categorization, resulting in accurate financial records. This up-to-date data can help you capitalize on growth prospects and accurately allocate resources where they’re most needed.

Efficiency

Accounting software can substantially enhance operational efficiency by optimizing and automating various processes. One inherent benefit of accounting tools is reducing the need for manual data entry, a traditionally labor-intensive process prone to errors.

Better yet, for the same reason, it’s worth considering investing in all-in-one solutions like Oracle NetSuite, Zoho Accounting, or Bonsai if you don’t already own the best task management software, email marketing platforms, or similar tools, as these further optimize your day-to-day operations.

Besides automating repetitive tasks, these tools excel at time management and ensure accuracy by providing detailed reports. At the click of a button, your accounting software can generate income statements, balance sheets, and cash flow statements.

Compliance

Accounting tools offer robust features to ensure financial actions align with the prescribed fiscal and legal requirements. From accurately categorizing expenses to generating reports and calculating taxes, investing in the best small business accounting software minimizes the risk of errors and penalties.

In addition, having a digital platform as a central repository for your financial records is invaluable during audits or while you search for a specific document. Besides making tax assessments a breeze, minimizing the probability of miscalculation or oversight can impress stakeholders and contribute to your credibility.

Scalability

Accounting software accommodates increased transaction volumes seamlessly with the business’s growth. That means it’s an excellent long-term investment that won’t buckle under the weight of heightened activity like traditional methods would.

It also helps you avoid hiring additional personnel to manage the growing financial workload, which translates to cost savings. For example, if you decide to expand your business operations or open new branches, accounting tools will help manage your financial records across various locations.

In addition, having access to a centralized hub for financial data and processes reduces the risk of fragmented information. This centralized approach simplifies analysis, reporting, and decision-making and provides a unified view of the business’s financial health.

How to Choose the Best Small Business Accounting Software UK Solution

Choosing the best small business accounting software solution in the UK requires careful consideration of various factors to ensure it aligns with your business’s needs and compliance requirements.

Here are some core factors to consider while making your decision:

Ease of Use

Ensure your accounting software delivers a user-friendly experience that doesn’t require extensive accounting knowledge. Software with an intuitive interface and simple navigation can help save time and maximize your efficiency.

That said, in some instances, as is the case with Netsuite, many find the platform worth it, even though it boasts a learning curve, as everything it offers makes it worthwhile. This requires consideration as it depends on what you feel would work best for your team.

Integrations

Unless you opt for an all-in-one solution like Bonsai, you should pick a platform that easily integrates with other tools your business already uses, like CRM, eCommerce platforms, or inventory management tools to get a unified view of your business, streamline processes, and minimize data entry.

Reporting Capabilities

Comprehensive reporting can help you make better business decisions and deliver precise insight into your business health. Consider tools with detailed financial reports such as profit and loss statements, cash flow reports, balance sheets, and tax reports.

Customer Support
We’ve summarized the key pros and cons of each tool based on user feedback, as we consider this one of the most important factors to consider. Real reviews give you insight into what a tool is great for and any downfalls it has that you should know — directly impacting whether it’s suitable for you.

Besides weighing up the advantages and any flaws, it’s crucial to ensure the accounting software delivers impeccable customer support. Look for those that provide accessible channels for assistance, including email, live chat, phone, or an online knowledge base. All the providers on our list offer extensive support, but priority support is often only available on higher-tier plans.

FAQs

What is the best accounting software for self-employed in the UK?

Can I get small business accounting software free?

What is the best accounting software for my small business?

Can I do my own accounting UK?

How to do accounting in the UK?

Is QuickBooks good for small businesses?

How much is QuickBooks for a small company?

Is GAAP still used in UK?

Ilijia Miljkovac
Technology Writer

Ilija Miljkovac is a Techopedia writer with 7 years of experience covering all things tech. He writes about everything from cybersecurity to ISPs, ensuring businesses and customers are educated about the latest products and services. He's written for publications such as Business2Community, TheTechReport, Comparitech, and more. When he's not maniacally hacking away at his keyboard, Ilija spends his time either hiking in nature or holed up in his apartment gaming.