Best online accounting software for small businesses in the UK

Best online accounting software for small businesses in the UK

Lead by the “software-as-a-service” revolution, providers of traditional online accounting software have been forced to increase their systems’ usability, streamlining weekly, monthly and yearly administrative tasks and ensuring that operations are rolled out more smoothly.

In today’s world, UK businesses do not need to spend each year on new versions of online accounting software in UK while choosing the best accounting software. Instead, they need to pay a monthly fee that provides them with an all access pass to their data. These new cloud-based online accounting software licensing models mean that the former “one license is only for one computer” protocol has been rendered irrelevant. If a business has access to a web browser and login details, it can easily raise an invoice, process a payment and even reconcile a bank statement. Businesses are also not required to worry about updating their online accounting software to comply with new accounting rules as software automatically updates to accommodate these changes.

Currently, there are many online accounting software, providing accounting software for small business as well as large business. Here is a guide to the best accounting software in UK.

Xero

Founded in 2006, New Zealand based Xero is a cloud-based online accounting software for small business. As of February 2018, Xero has over 1.8 million subscribers globally, making it as an ideal choice as best accounting software in UK and one of the best online accounting software for small business.

Why Xero is one of the best accounting software in UK

As a cloud-based online accounting software in UK, Xero can easily be accessed from all types of devices with an active internet connection. It is built on a double entry accounting framework and its robust accounting features enables small businesses to view their cash flow, transactions and account details from any location. Bank transactions are all automatically imported and coded by this online accounting software for small business.

Online bill payments help keep track of spending and stay on top of bills due, improving relationships with the suppliers that provide critical business services. It also allows businesses to manage personal expenses with a mobile review and approval process of each receipt. Xero offers unlimited user support and integration with over 600 systems through its add-on marketplace, including Curve, Receipt Bank, and Vend. It also updates its software on a regular basis.

Also, submitting CIS returns from Xero is free until 31 March 2020.

Cons

In some areas, Xero’s accounting features are limited, for example it has only two tracking categories.

For this software, business users pay a subscription amount for the most basic version. In order to access functions such as expanded time tracking and inventory tracking, businesses need to purchase add-ons on top of the subscription. Importing data is free but using payment services like Paypal or Stripe carries a cost.

Also, Payroll, Projects and Expenses are optional extras and not part of any of the pricing plans.

Pricing

The solution comes with a 30-day free trial period for product testing and feature evaluation. It provides three introductory pricing levels that kick in after a 30-day free trial. Xero Starter (£4/month as an introductory pricing, £10/month after the first three months) has monthly limits of five invoices and quotes, five bills, and reconciliation for 20 bank transactions, submitting VAT to HMRC and automatic CIS calculations and reports. The second pricing level, Xero Standard (£8.80/month till 1 August 2019, £9.60/month after 1 August and £24/month after the first three months) adds unlimited billing and invoice functionality, quotes, transaction reconciliations and submitting VAT to HMRC and automatic CIS calculations and reports. Xero Premium (£11/month till 1 August 2019, £12/month after 1 August and £30/month after the first three months) is the only version to offer multiple currency support, and on top of that offers the same capabilities as Xero Standard.

What’s new

The introductory promotional pricing plan, valid till 1 August 2019.

Intuit QuickBooks

QuickBooks is another veteran of the online accounting software business. Like other accounting tools, Quickbooks comes with an attractive dashboard that puts key data such as income (split into open, overdue and paid in the last 30 days), expenses and profit and loss in front of you as soon as you log in.

It offers true double-entry accounting with ample reports and strong accounts charts, as well as customisable invoices, inventory capabilities, payroll support, multiple currencies, and over 400 integrations.

Why Intuit QuickBooks is one of the best accounting software in UK

One of the best aspects about QuickBooks is that this online accounting software continues to be updated on a regular basis. One of the most recent updates the software received was the project management feature. The online accounting software also provides users with many features that other traditional locally installed software does not provide. These features include automatic sales receipts, split transactions, scheduled invoices, and location and class categories.

Cons

Quickbooks, which is generally a feature-rich, high-quality software, does have disadvantages as the software’s several customers have flagged that the software still does not compare to its desktop counterpart and can sometimes be complicated and hard to navigate over a period.

Pricing

Quickbooks currently has three versions of accounting software for small business owners and the newly added Self-Employed plan for freelancers and independent contractors, all of which offer a 30-day free trial. The three versions are applicable for medium business owners. The first plan, Simple Start (£5 per month for six months), allows businesses to track income and expenses, track and e-File VAT to HMRC for MTD, send unlimited invoices, chase late payments, snap & store receipts, connect multiple bank accounts, run reports, manage CIS transactions, run payroll (+£1 per employee /month), free UK phone support and one user profile. Essentials (£7 per month for six months) provides all the features of the Simple Start plan and additionally provides two more user profiles, managing bills and payments, multi-currency support and tracking employee time. Plus (£11 per month for six months) enables users to create budgets and purchase orders, manage stock and Track project profitability.

The newly introduced Self-Employed (£3 per month for six months) is the most basic plan which only includes track income and expenses, track deductable mileage, send unlimited invoices, snap & store receipts, and connect multiple bank accounts. Additionally, this plan exclusively has the option of having separate business and personal transactions, estimating income tax payments and completing HMRC self-assessment.

What’s new

The separate Self-Employed plan for freelancers and independent contractors, which although is basic, but has a few exclusive offerings.

Bokio

Bokio, free accounting software for small businesses, sole traders and freelancers, lets you record receipts and other documents with step-by-step bookkeeping. It also offers unlimited invoicing with an invoice generator, where you can create, send, track and record them all in the same place. Bokio supports employee expenses, automated reporting, and VAT Return for Making Tax Digital is automatically calculated making it really easy to submit to HMRC.

Why Bokio is one of the best accounting software in UK?

Using Bokio means there’s no need to be an expert in accounting to get it done quickly and easily. The software is simple to use by uploading a receipt and AI helps by filling in the amounts, dates and numbers. Bokio is automated, so it reduces errors, saving time and money. Bokio is always working on new features to make the software even better. The software is secure and cloud-based, so it can be used on the go.

Cons:

Currently Bokio is developing support for payroll and live bank feeds.

Pricing: 

All the features in Bokio will always be totally free if you do your accounting yourself using the software, with no limitations.

Wave

Wave is one of the most successful free online accounting software services. The tool is completely free for accounting, invoicing and receipts; however, businesses are required to pay for payroll and additional personal technical support. Although the software is a little basic for medium-sized businesses, it’s one of the best accounting software for small business, sole traders and freelancers.

The free features that Wave provides are unlimited invoicing, unlimited estimates, contact management, expense tracking, personal accounting, lending and reports.

Why Wave is one of the best accounting software in UK

Wave has rolled out its Android and iPhone apps, and the online accounting software has also included a lending feature, demonstrating that it constantly updates the software to better fit customers’ needs. This online accounting software is one of the easiest accounting software programs to set up. What makes it one of the best accounting software in UK is the fact that the navigation is simple, and overall organisation is intuitive.

Cons

Although the software and all its standard features are free, it has additional costs for its payroll and credit card processing features. Also, these two features are only available for users in US and Canada. What’s more, Wave has decided at this time not to build a direct connection from Wave to HMRC for Making Tax Digital (MTD). Instead, it will enable Wave customers to comply by using approved bridging software. The company has also stopped its live bank feeds.

Pricing

Wave is a free for life software. The online accounting software also does not limit users to the number of invoices, customers or transactions, like other accounting software.

Zoho Books

Zoho Books provides a variety of financial tools as an online accounting software for small business. The accounting tool has usability, flexibility, and depth in standard bookkeeping areas, such as sales and purchases, time and project-tracking, and inventory management. Zoho also comes with help tutorials and guides on phone, email, chat, and online documentation, which are crucial for online accounting software solutions.

Why Zoho Books is one of the best accounting software in UK

The software allows businesses to streamline their back-office functions and manage all financial activities from a single hub. This also allows businesses to access unrestricted payments from all locations, receiving timely payment requests and reminders on recurrent bills, and even auto-charge options. On Zoho Books, businesses can also adjust the finance management to their project structure and manage all tasks and projects from any device. One of the aspects that helps in featuring this online accounting software as one of the best accounting software in UK is that Zoho Books guarantees that all work and projects are completed and monitored during and after office hours as well.

Cons

User-access permissions cannot be established down to the screen and activity level. The software’s report customisation is also quite weak, and it does not have payroll integration. Some features, such as contact and item records, transactions, inventory and project management, customisability (except for reports), automation, and user interface/navigation are some of the best among online accounting software tools.

Pricing

The online accounting software tool currently offers a 14-day free trial, following which users can subscribe to the tool. The available plans are the basic plan, standard plan and professional plan. The plan, costing £9, limits users to 50 contacts, one user plus an accountant, and five automated workflows. The supported features include invoices, expense-tracking, projects, and timesheets. The standard plan, which costs £19 per organisation per month, provides businesses with higher limits on all features that are present in basic. It also additionally adds bills, vendor credits, and reporting tags features. The professional plan offers unlimited contacts and users, and 10 automated workflows per module, in addition to purchase orders, sales orders, and inventory tracking. It costs £29 per organisation per month.

What’s new

New User Interface, Navigation, and Help sections.

Sage 50c Premium Accounting

Sage 50c is a large online accounting software for small business that has been primarily designed for desktop use. One of the most significant elements of the online accounting software is that it is cloud-based. Businesses can share their financial data with their accountant and other users by storing it on the web-based Sage Drive. Although Sage has adopted the cloud, it still lacks integrated browser-based remote access for transaction entry and data retrieval.

For small businesses looking for an online accounting software tool that will provide a solution with a strong feature set and exceptional customisability, especially in terms of inventory management, Sage 50c is one of the accounting software in UK. The online accounting software is known to have the most thorough documentation and provides online and phone-based support, as well as professional advisers.

Why Sage 50c Premium Accounting is one of the best accounting software in UK

Businesses can easily view their financial reports from their laptop, tablet, or smartphone without having to go into Sage 50. Being cloud-based, this online accounting software comes with automated offsite back-ups. Businesses can also undo data entry errors by restoring data from the cloud as of a date.

Cons

Sage has only released an iOS version of its app and has not released any app specifically for Android users.

Pricing

The Sage 50c premium accounting software comes in three different packages, with monthly and annual plans. The most basic package, the Sage 50c Essential is targeted as an online accounting software solution for micro businesses looking out for an accounting software for small business and provides licence for a single user. The basic plan costs £20 per month and £240 annually and enables businesses to manage cashflow, income expenses and payments, along with secure cloud access and backups. Sage 50c premium provides a 30-day free trial period only for its advanced packages – standard and professional. The Sage 50c premium standard plan is a desktop accounting solution that costs £60 per month and £720 annually and comes with stock management and departmental analysis. The professional plan comes at the cost of £125 per month and £720 annually that provides access to over 20 users. In this plan, businesses can manage an unlimited number of companies and receive in-depth stock reporting. Both the standard and the professional provide support for Microsoft office 365 Business Premium.

What’s new

The annual pricing plan, supplementing the monthly plan.

KashFlow

Founded in 2005, KashFlow has won numerous awards including Best SME Accounting and Finance in 2011 and 2012 and Best Small Business Accounting Software in 2008 and 2009. Currently, there are 57,000 businesses using KashFlow in the UK. These accolades make this online accounting software as one of the best accounting software for small business and best accounting software in UK.

Why KashFlow is one of the best accounting software in UK

KashFlow now has its own app called the KashFlow Go. The app is targeted towards traders and the needs of an online accounting software for small business. It is available on both Android and iOS and has been designed to provide a financial overview of the business while on the go, create and send quotes and invoices.

A unique aspect about the this online accounting software is that the software directly links to HMRCenabling users to access all data in a single place, easing compliance burdens. It also integrates with industry leading online payment processors like Worldpay and GoCardless.

Cons

Although this online accounting software has addressed some user requests, it has still downgraded features in many aspects. The software has dropped the number of integrations on offer and has removed their customisable dashboard feature. KashFlow also faces issues with navigation on the website.

Pricing

The online accounting software offers a free 14-days trial. Following the free trial, the company offers three pricing plans. The Starter (£8 per month and £56 annually) plan is ideal for sole traders, contractors and small businesses, business which is £14 per month, and business and payroll. Apart from a free mobile app, the plan allows a single user to send unlimited quotes & 10 invoices, reconcile up to 25 bank transactions, manage and submit VAT online, access to over 50 reports, customisable dashboard. manage purchases & expenses and track mileage. The Business (£15 per month and £111 annually) plan, ideal for growing businesses and limited companies, includes unlimited invoices, unlimited bank transactions, repeating invoices & purchases, multi-user and multi-currency features over and above the Starter plan. The Business + Payroll (£21 per month and £150 annually) plan has added features of payroll up to 5 employees.

The annual subscription for all the plans has an additional 4 months free for a limited period.

What’s new

The annual pricing plan and the limited period offer of 4 months free on annual subscriptions.

SAP Business One

SAP Business One is often described as an enterprise management online accounting software designed to streamline the flow and storing of information across businesses of all scales. The accounting tool is often used to address the needs of many industry verticals including manufacturing, retail, service, and distribution industries. This online accounting software also features a remote support platform that can perform automatic system health checks, scheduled database maintenance operations, upgrade eligibility checks, and automatic fixes for detected issues. It is deployed on-site and runs on Windows operating systems. Businesses can deploy the tool between one and 30 users.

The online accounting software primarily provides businesses with access to applications for general ledger, journal entries, project cost accounting, budget management, financial reporting, multi-currency support, and other functions. Business One is often defined as a single system that requires only a single installation.

Why SAP Business One is one of the best accounting software in UK

In terms of online accounting software, SAP Business One is known for its extensive customisation. The software also comes with an underlying SAP HANA database that allows for complex business analytics. The online accounting software is known for its multi-currency support and extensive documentation, making it an easy entry as one of the best accounting software in UK.

Cons

Installing and running SAP Business One is sometimes not as quick and easy as other cloud-based mid-range online accounting software. Businesses need to plan for implementation, configuration and testing of the software, which could take several weeks, as compared to the quick installation of cloud-based software. These services also incur and additional charge by partners and resellers, hence it might be a difficult choice as an online accounting software for small business.

Pricing

The software comes with a free trial for interested customers, and quote-tailored enterprise pricing license for those who decide to purchase it.

NetSuite

NetSuite, which is now known as Oracle Netsuite, is another cloud-based on-demand online accounting software that enables businesses to address real-time global business management and financial consolidation requirements and deliver them to mid-sized companies with multinational and multi-subsidiary operations. It was one of the of the first enterprise resource planning (ERP) systems designed and written exclusively for the cloud. NetSuite effectively enables companies with several subsidiaries, entities and business units to function using a single account, dealing with different currencies, taxation and governance requirements.

The online accounting software provides real-time analytics free for all users.

Why NetSuite is one of the best accounting software in UK

The tool is often preferred by businesses as a best accounting softwarein UK owing to features like role-based dashboards and real-time metrics that help improve business performance, encourage and improve accountability and compliance through comprehensive, auditable accounting and speed up settlement of outstanding sales via automated billing management.

One of the best features about the online accounting software is that users will not need to wait and purchase different versions as they are released as there is only one codebase fully controlled by the vendor. The user will also not need to wait for updates and bug fixes to be built and tested, as they are automatically updated by NetSuite.

Cons

The one disadvantage that the online accounting software has is that businesses often find it difficult to configure the software for a specific role. Many businesses and users have also shared that the software’s help support can be confusing.

Pricing

Currently, the online accounting software is solely available as a subscription-based service. Small and medium businesses need to contact NetSuite or its resellers to receive a quote for purchasing the software, making it not an automatic choice as an accounting software for small business. It should be noted that the base price quoted by the company does not include fees for partner/reseller value-add services, like installation, customisation, or training. It is sold primarily through a partner/reseller channel.

Next steps towards choosing the best accounting software in UK

The availability of a wide range of online accounting software for small business, and medium and large sized ones as well, can make it difficult to choose one software. Businesses need to review each of the online accounting software and choose the system that suits the business’ needs. In order to choose the best accounting software in UK, businesses need to consider the look and feel, customisability and scalability, record keeping, tasks and data access reports and subscription fees. Businesses should also take advantage of the free trials offered to fully understand the software capabilities before opting to purchase or subscribe the online accounting software.

Whitepaper

The Future of Finance is in the CFO's Hands

Business The Future of Finance is in the CFO's Hands

4m
Save a Week a Month Consolidating Accounts

Accounting Software Save a Week a Month Consolidating Accounts

5m
Mitigating Risk Through Internal Control

Legal Mitigating Risk Through Internal Control

6m
Could tax season have run more efficiently?

Corporate Tax Could tax season have run more efficiently?

6m

Related Articles

How to optimise your practice for the future

Accounting Software How to optimise your practice for the future

1m Wolters Kluwer | Sponsored
CEO of Barclaycard Payments: CFOs nervous in “confusing” tech market

Accounting Software CEO of Barclaycard Payments: CFOs nervous in “confusing” tech market

2m Dave Beach