As a business owner in the UK, choosing the best accounting software for large and small businesses is as important as it is difficult. Businesses in the United Kingdom and most other nations require such solutions to perform correctly, file taxes efficiently, and maintain trustworthy records.
This article compares the features and pricing of the eight best accounting software programs available for businesses in the UK and how to choose the best accounting software for a small business.
What Exactly is Accounting software, and How can it help UK Businesses?
Accounting is an essential aspect of running any organisation. All types of businesses must keep accurate accounting records, manage purchase orders, file tax reports, and so on. The question is not so much whether you need accounting software as it is about what it can contribute to your company.
Their primary goal is to:
- Automate routine accounting tasks.
- Streamline connections with third parties such as customers, suppliers, and the government.
- It helps you save time and prevent errors when doing chores like data entry and bank reconciliation.
How Does Accounting Software Work?
You’ve heard of the best UK accounting software and some of the greatest solutions to small business owner’s problems, but how does it work?
You’ll need to set up your company’s chart of accounts when you initially install accounting software. This is a list of all the accounts that your company will use to track its financial activity. The application will next prompt you to enter the initial balances for each account.
Once configured, your financial transactions will sync automatically, including data updates on reports and charts, providing you with real-time insight into your company’s financial health.
Best Accounting Software in the UK
You are interested in learning more about what each of these can achieve for your company? You’ll discover everything you need to know to make an informed decision right here.
#1. Intuit QuickBooks
Intuit QuickBooks is a popular and one of the best accounting software packages used by both small business owners and individuals to manage their finances. It’s simple to use, making keeping track of your income, expenses, and taxes a snap.
Features Include:
- Automation – QuickBooks can automate several processes for you, including invoicing, payment tracking, and report creation.
- Reports and Analytics – You may generate a variety of reports to track your finances and how much you’re spending to correctly identify where your money is going.
- Electronic Invoicing – Using the system, you may send invoices to clients via email, track them, and collect online payments and electronic signatures.
Pricing:
- £10 per month for self-employment
- Simple Start costs £14 per month for one user.
- Essentials — £24 per month for three users
- In addition — £34 per month (5 users)
- Advanced (25 users) — £70 per month
#2. Oracle NetSuite
Oracle NetSuite is a popular UK accounting tool for large businesses looking for an all-in-one solution to manage their accounting — as well as HR, customer management, eCommerce, inventory, and order management. It simplifies, automates, and delivers everything a large or growing business would require.
Features Include:
- General Ledger – With NetSuite, you’ll have excellent audit trails and the ability to adjust account types, transactions, and reports to match your specific needs.
- Tax – Because NetSuite allows you to effortlessly manage local and global tax and multiple tax schedules, you may save time and decrease human work and the possibility of errors.
Pricing:
Unlike most, Oracle NetSuite costs depend on your company’s specific demands, so they vary greatly. With that said, we recommend receiving an estimate to determine how close the tool’s pricing is to what you’re looking for.
#3. FreshBooks
FreshBooks is the ideal solution if you need a full-featured invoicing program that is simple to use.
The interface is simple to use, and you can add billable time and prices, personalise the invoice style, and set up recurring invoices, automated payment reminders, and late fines with just a few clicks.
Features Include:
- Customizable Invoice – To make a completely customised invoice, modify the font and colour and add your company logo.
- Automatic Late Fees – If your clients are frequently late in paying their bills, you can configure FreshBooks to charge them a late fee.
- Recurring Invoices – You can set up recurring invoices to avoid having to create the same invoice every month.
Pricing:
- Lite — £11 per month (with a maximum of 5 billable clients)
- In addition, £19 per month (50 billable clients)
- Premium (unlimited clients) — £30 per month
#4. Sage Business Cloud Accounting
Sage Business Cloud Accounting is a low-cost accounting program that packs a powerful punch. With the entry-level plan, you may automatically generate and send invoices, track payments, and reconcile bank transactions.
Sage business accounting software is one of the best for small business owners in the UK since it has a bespoke invoice template that makes your invoices look professional.
Features Include:
- Personalised Invoicing – With Sage’s customizable templates, you can design and send invoices that look professional.
- Automatic Bank Reconciliation – Keep track of your bank transactions and automatically reconcile them with the entry-level plan.
- Detailed Reports – Receive detailed reports on your inventory, project time and expenses, and other topics.
Pricing:
- Accounting Beginning — £12 per month (1 user)
- Accounting Standard (many users) — £26 per month
- Accounting Plus costs £33 per month for an unlimited number of users.
#5. Xero
In contrast to accounting software that costs based on the number of users, Xero’s membership packages allow for an infinite number of users making it the best accounting software for both large and small business owners in the UK. As a result, when your business grows, you may add more employees to your account at no additional cost.
Features Include:
- Pay Bills – The software will import your bills from your email or online banking so you can see all of your spending in one location.
- Keeping Track of Business Expenses – Keep track of your business expenses by claiming them in Xero. The software allows you to easily input new expenses as you go and automatically categorise them.
- Track Projects – The software allows you to create different projects and then track the revenue and expenses related to them.
Pricing:
- Starter — £14 per month; best for sole proprietors
- Standard — £28 per month; best suited to expanding small enterprises
- Premium — £36 per month; suitable for established businesses
#6. Tide
It’s an excellent solution for small firms and companies that don’t often conduct large amounts of cash or check transactions. One of Tide’s best features is that you can open a business account and register your company without paying a dime.
Tide, as one of the best accounting software companies in the UK, helps small business owners by providing its members with numerous benefits, such as free subscriptions and discounts through partnerships with firms
Features Include:
- Cash Flow Forecasting – This is useful for budget planning because you get the expected account balance 30 days in advance. You may also keep track of your credit score.
- Expense Card – Using an expense card makes budgeting a breeze. You may add up to 50 people to your account, gain real-time access to your spending records, set spending limitations for individuals based on their employment duties, and separate transactions by person or spend category.
Pricing:
- Free plan
- For plus — £9.99 + VAT — each month
- £18.99 + VAT per month for Pro
- Monthly cashback of £49.99 + VAT
#7. Zoho Books
Zoho Books has excellent functionality, making it an excellent choice for organisations of all sizes. It even contains some more advanced features, such as project billing and time tracking.
Features include:
- CRM Integrations – Zoho Books interacts with Zoho CRM, providing you with a comprehensive view of your customers’ interactions across both platforms.
- Recurring Invoices – Use recurring templates to automate the creation of invoices and bills.
- Expense Tracking – Record your expenses as they occur or attach receipts to transactions to keep track of them.
Pricing:
- 1 user and 1 accountant are free.
- Standard – £12 per month for three users
- Professional (£24/month for 5 users)
- Premium (£30 per month for ten users)
- Elite (cash flow forecasting) — £99 per month
- Ultimate costs £199 per month for 15 users.
#8. Crunch
Crunch is an easy-to-use accounting software solution designed for freelancers and sole proprietors, while the company has lately expanded its offerings to include small enterprises. You can use this application to create and manage invoices while dealing with all of the regulatory and tax aspects of running a one-person firm.
Features include:
- VAT Calculation – Crunch calculates VAT on each invoice, guaranteeing that firms meet tax obligations.
- Unlimited Assistance – All-priced plans include unlimited accounting assistance.
- Payroll – Crunch can handle payroll for a lone proprietor or freelancer, separating business and personal money.
Pricing:
- 1 user and 1 accountant are free.
- Pro Sole Trader — £24.50 per month
- The monthly fee for Limited Company Pro is £41.50.
- £121.50 per month for Limited Company Premium
How to Select the Best Accounting Software for Your Small Business
When selecting an accounting software package, keep the following points in mind:
#1. Your Company’s Requirements
Choosing accounting software that suits your company’s specific demands is perhaps the most crucial criterion. Your needs will vary based on your industry and the size of your organisation, so double-check that the software you choose meets your specific needs.
#2. Your Financial Situation
Accounting software can be costly, but there are a variety of alternatives available at varying price points, allowing you to pick software that best meets your budget without losing the functions most critical to your organisation.
#3. Support
To guarantee you have access to help if you run into any issues, double-check the support given on your chosen plan and the documentation on the website.
#4. Automation
Financial transaction automation can save time and enhance accuracy. However, not all accounting software includes automation capabilities. Some, for example, allow you to automate only a portion of the procedure. Others automate the entire process, from data entry to financial statement generation.
#5. Utilisation Ease
Although the majority of the accounting software programs discussed in this piece are simple to use, some have steeper learning curves than others. You may want to use the free trial first to confirm that the software’s UI is easy to use.
Advantages of Accounting Software
The following five points are the pros of using the best accounting software for a small business in the UK
- Financial Processing that is Precise: Accounting software eliminates any calculation errors that may occur during manual bookkeeping.
- Digital Documentation: Your progress will be saved automatically on the system.
- Analyses and Reports: You can create informative and appealing data visualisations.
- Integration that is Both Current and Simple: Accounting software facilitates transaction processing by linking to local and international banking networks.
- Increase Efficiency and Production: Automation allows your company’s people to focus on other commitments that demand more skill and labour.
The Disadvantages of Utilising Accounting Software
Since using the best accounting software for a small business in the UK has a lot of advantages, it also has its drawbacks
- High Price: When compared to a paper-based system, the cost of implementing accounting software may be high.
- Difficulties With Application: Accountants may find it difficult to convert from a manual approach to automated software.
- Cybersecurity Risks: Storing and storing up data on external servers exposes your company to hackers and data leaking.
- Inadequate Customer Service: When a fault occurs, support may not be appropriate or fast in resolving your problems.
Signs that You Have Outgrown Your Accounting Software
If you are wondering if you have outgrown your accounting business, the following signs will guide you
#1. It is not linked to the Rest of the Company
You’ll most likely be employing a variety of systems for various purposes. The best business accounting software will integrate with all of them, collecting data from across the organisation and allowing for faster, more informed decisions.
#2. You Have Yet to Make the Transition to the Cloud
If you’re still using on-premise accounting software, you’re missing out on some significant advantages. Moving to a cloud-based accounting system will provide quick remote access to real-time data, increased security, instant upgrades, and a better user experience.
#3. There is a Scarcity of Automation
Another symptom that you’ve outgrown your accounting software is a lack of automated processes. Manually rekeying data increases the possibility of errors, which means reports may be based on obsolete or incorrect information.
#4. You Must Increase Security
An out-of-date system necessitates further effort to meet UK compliance standards, and it may expose your company to data breaches and theft. The longer your accounting software has been in use, the more time hackers have had to figure out how to circumvent it.
Does HMRC Accept QuickBooks?
QuickBooks and HMRC are integrated, allowing you to transmit your VAT return directly – and securely – without having to utilize different platforms.
Is it Necessary for Me to Preserve Receipts if I use QuickBooks UK?
Yes. Maintain meticulous records of any expenses you intend to claim as company deductions. If you are audited, the IRS will look closely at your business deductions. Take extra precautions with your money.
Why is Xero so Pricey?
One factor for Xero’s increased pricing could be its concentration on providing a rich set of features designed to meet the demands of larger enterprises. The target market for Xero comprises mid-sized businesses and enterprises, and its feature set reflects this concentration.
What is the Most User-friendly Accounting Software in the UK?
The best all-round accounting software for Small and Medium-Sized Businesses is FreshBooks. Even if you lack accounting or bookkeeping knowledge, business owners will find it simple to use. With an easy-to-use interface and cheap cost, this accounting solution may be used from virtually any place and device.
What Causes an HMRC Audit?
Late filing, late tax payments, and mistakes on tax returns can all result in an HMRC audit. Inconsistencies or major differences in different returns, such as a significant fall in income or expense, can also prompt an investigation.
Conclusion
Whether it is a regulatory issue or a strict economic necessity, it is prudent to explore all of the benefits they can bring to your firm.
UK businesses can benefit from streamlined tax reporting and more time to focus on expanding their operations. Finding the best accounting software can be time-consuming, but it is well worth the effort if you take the time to examine your needs.
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