Managing the financial side of a small business isn’t the most exciting part of running one, but it’s definitely one of the most important. Keeping track of invoices, expenses, tax filings, and cash flow can quickly become overwhelming without the right tools. That’s where accounting software comes in. But with so many options, how do you pick the best one?
Some are designed for freelancers and sole traders, while others cater to growing businesses with VAT reporting and payroll needs. To help you out, here are ten accounting software options that suit small businesses.
1. Xero
Xero is a favourite among small businesses, thanks to its user-friendly interface and strong set of features. It offers invoicing, expense tracking, VAT submissions to HMRC, payroll integration, and bank reconciliation. One of its biggest perks is the ability to connect with multiple third-party apps, making it easy to customise.
2. QuickBooks Online
A strong contender, QuickBooks Online offers a range of features, including invoice creation, mileage tracking, payroll support, and VAT compliance. It’s a great fit for small businesses and self-employed individuals looking for a cloud-based solution that syncs with their bank accounts.
3. FreeAgent
Designed with freelancers and small businesses in mind, FreeAgent simplifies bookkeeping with automatic bank feeds, tax forecasting, and invoice management. It even helps you file your Self Assessment tax return, making it a great choice for sole traders.
4. Sage Accounting
Sage has been a staple in accounting for years, and its cloud-based software is ideal for businesses. It provides VAT submission support, bank reconciliation, invoice tracking, and cash flow management. If you need payroll features, you can integrate Sage Payroll.
5. Zoho Books
This software offers an affordable solution for small businesses looking for invoicing, expense tracking, and bank reconciliation. While not as well-known as Xero or QuickBooks, Zoho Books is a solid option for those needing a simple but powerful accounting tool.
6. KashFlow
KashFlow is specifically built for businesses, meaning it’s designed to meet local tax regulations and VAT requirements. It provides invoicing, expense tracking, and financial reporting, all in a straightforward interface. It’s also HMRC-recognised for Making Tax Digital (MTD) compliance.
7. FreshBooks
Originally designed for freelancers, FreshBooks has grown into a versatile accounting tool for small businesses. It offers time tracking, invoicing, expense management, and reports. While not as tax-focused as some options, it still works well for many businesses.
8. Wave Accounting
A great free option for small businesses and startups, Wave Accounting provides invoicing, expense tracking, and basic reporting. However, it lacks built-in VAT features, so it’s better suited for sole traders or those not registered for VAT.
9. Pandle
Pandle is designed for small businesses that need a straightforward, low-cost accounting solution. It offers invoicing, bank feeds, and VAT tracking, making it a good choice for those who want something simple but effective.
10. Clear Books
Clear Books offers VAT returns, invoicing, bank reconciliation, and payroll features. It’s a great option for small businesses that want easy integration with HMRC’s systems.
Which One Should You Choose?
The best accounting software for your small business depends on your needs. If you want something easy and popular, Xero or QuickBooks are great choices. Freelancers might prefer FreeAgent or FreshBooks, while those focused on tax compliance may find KashFlow or Clear Books a better fit.
Before committing, take advantage of free trials and see which software feels right for you. The right choice can make bookkeeping a whole lot easier—and might even save you money in the long run.
