Top Solutions for UK Users (2022)
All small businesses need to keep their accounts to fulfil their payroll obligations to staff and tax obligations to HMRC. For decades, small businesses have hired accountants from the UK’s biggest banks at a substantial cost. Accountancy services for limited companies currently range from £100 to in advance of £1,000 a month.
After wrestling with this sizeable investment, many SMEs make the shift to small business accounting software, taking advantage of cost and time-effective systems.
It is worth remembering that all small businesses are unique within their industries and will have to approach small business accounting software differently. This article describes several accounting solutions tailored to small businesses, and it has been curated to ensure that there is an accounting solution for you, whatever your business.
The most substantial online accounting service is QuickBooks, which currently lays claim to 62.23% of the market share for SMEs using online accounting. It aims to make the process of accounting more straightforward and accessible remotely without losing the ability to work with real accountants.
The features of QuickBooks have been curated to reduce your administrative workload, automatically organising your receipts and bills and leveraging your bank information to save your valuable time. The app can scan your every receipt and extract whatever data is required.
Furthermore, QuickBooks helps you keep on top of your finances and reduces your tax costs. They have created a mobile app where you can input every business trip you make so that your fuel costs can be tax-deductible accurately.
Finally, real-time figures and their mobile app messaging service allow you to stay on top of your accounting progress and contact experts as soon as any issues emerge.
- Very low costs make it accessible for all businesses.
- Easy to set up and use, providing all the tutorials you need.
- It helps you to ease your tax burden.
- Online chat is a comparatively weak connection to accounting professionals.
- Some users report that the system sometimes crashes.
QuickBooks offers three essential pricing brackets so that all sizes of small businesses can benefit from their range of services. All of their structures provide 75% off for the first six months, and then the full price after that.
Their most basic package is “Simple Start,” which costs £3 per month for the first six months and £12 a month after. This package is aimed at directors and businesses who only need to manage their VAT and income tax, and it allows them to submit data directly to HMRC and features an invoice payment service.
The standard bracket is “Essentials,” which costs £5.50 for the first six months and £22 a month after. This option features abilities to work with suppliers and raises the maximum number of users from one to three. A key facet of “Essentials” allows users to invoice and pay suppliers in other currencies.
Finally, the premium bracket is “Plus,” which offers all of the above and project and stock management to five users. This bracket comes in at £8 for the first six months and £32 a month after.
Another primary online accounting service is Xero, which claims that its system can help small businesses vastly increase their efficiency, streamlining your accounting needs. Xero is known for using cloud data storage systems to ensure that they can provide you with the most accurate accounting information in real-time.
A key feature of Xero is its security measures. They understand that placing valuable financial data on the cloud is a risk they mitigate through data protection. Firstly, they encrypt all your information which means if hackers gain access to your account, your data will be a senseless jumble. Secondly, they use multi-factor authentication, whereby whenever you log into your account, they will send a text to your mobile featuring an access code.
Xero also understands that many small businesses treasure personal connections with accountants and bookkeepers they can trust. Rather than attempting to replace these relationships, Xero aims to enhance them. All Xero users have access to their directory of trusted accountants and bookkeepers, where they can search for professionals close to them.
- Add as many users as you want.
- Automation of billing and receipts.
- Real-time and holistic reporting.
- No live support options.
- The cheapest plan places limits on billing and invoices.
Xero offers all new customers a 30-day free trial, where you can figure out if their service is suitable for your business.
After this month, you must begin to pay, although the first six months have a 50% discount.
Their “Starter” plan is £6 a month for the first six months, and then £12 a month. This allows access to their limited features.
Xero’s “Standard” plan is their most popular at £13 a month for the first six months and £26 a month after that. Their plan allows you to send unlimited bills and quotes and gives access to cash flow snapshots.
Finally, the “Premium” plan costs £16.50 for the first six months before rising to £33 a month. The leading add-on here is the ability to use multiple currencies.
Our third UK-based accounting software is Zoho Books which aims to help small businesses to remain MTD compliant. Before investing in Zoho Books, you can look over their demo account dashboard to see how their system is navigated.
Zoho Books comes with a fully integrated platform that your small business can use to run its multitude of other apps in conjunction with it.
You can also use Zoho Books to receive payment faster. Any invoices you send with them feature regular payment reminders so your customers don’t forget their dues.
- Affordable handling of multiple currencies.
- The system is continually updated with additional features.
- Rapid support.
- The helpline only runs Monday to Friday.
- Functionality and UX difficulties.
Unlike most other accounting software, Zoho Books has a permanently free option available to businesses making less than £35K annually. Zoho Books are relatively generous, offering most services to those on the free plan.
Businesses begin paying once they earn more than £35, and the “Standard” plan is a likely port of call for many. This plan is similar to the free program, but on a much grander scale. It allows 5,000 invoices for example.
The second paid plan is “Professional,” which costs £24 a month and includes multi-currency handling, retainer invoices, and other additional features.
Next, the most expensive plan is “Premium.” This allows up to 10 users across three branches, allowing businesses to make use of extensive customization.
Sage is targetted exclusively at small businesses, estimating that their services save customers 10 hours a week on admin. They are currently aiming to attract new customers by offering the first three months free.
Sage understands how small businesses collaborate in mutually beneficial relationships, and they have established a community where you can ask accounting questions to experts and gain insights into businesses like yours.
This online accounting software also collaborates with other app developers in the finance and business space. They have created a marketplace where you can download mobile apps automatically compatible with Sage.
- Ability to use a multitude of reports and banking systems.
- Cloud systems reduce the need to install software.
- Highly customisable.
- A complex system that will require staff training.
- Customisation is required to avoid a cluttered UI.
Sage offers a threefold pricing structure after you have used the free period. Their “Start” plan costs £12 a month, allowing one user to access their basic system.
Their ” Standard ” plan is a step up from this, costing £24 a month. Primarily, this plan facilitates unlimited users, but it also gives you access to forecasts and advanced reports.
Finally, the “Plus” plan costs £30 a month and comes with inventory capabilities, and facilitates your usage of multiple currencies.
Freshbooks are an MTD compliant and HMRC accounting software designed for small business owners of all kinds. They offer tailored services to freelancers, self-employed professionals, and businesses using employees or contractors.
The primary feature of Freshbooks is its time-tracking capabilities. Their ergonomic interface allows you to see how long your tasks are expected to take and for you to layout your time in the most productive way possible. This system helps you reduce the time spent on planning and optimising your time usage.
This planning is further enhanced by their Projects software. Projects is an integrated project management and team collaboration software to help your staff deploy their full capabilities in conjunction.
- Easy to use, especially for sole traders and micro-businesses.
- Quick and helpful customer support.
- Better for businesses that do not need to process a lot of data. The system crashes easily under heavy load.
- A lack of tax estimates can lead to shocking bills.
Freshbooks offers three pricing brackets, all of which are 60% off for the first six months if you pay yearly.
Their basic package is “Lite,” which will cost your business £4.40 a month until the offer runs out, and then £11 a month. This package allows for 5 billable clients and the tracking of unlimited expenses.
The following package is “Plus”: the most popular. This package is £7.60 a month and then £19 after half a month, allowing you 50 billable clients. There are no restrictions on the number of invoices you can send to these clients.
Finally, the “Premium” plan starts at £12 a month before rising to £30. It offers unlimited billable clients and advanced profitability tracking, and customisable emailing.
You can also buy their services with “Custom” pricing, which will vary based on your specific services.
How you should Choose an Online Accounting Software
Now that you know some of the key players in the online accounting market, it is time for you to decide which to choose. This is not a decision to rush into, and there is no single right answer on which software is the best. Instead, you should conduct additional research and carefully consider which option is best for your business’s specific needs.