Best Accounting Software for Businesses

Updated: August 2021

For decades, accounting softwares have helped small to medium businesses save on accounting costs – in some cases, eliminating the need for an accountant altogether and in others, simply reducing the time their accountant needs to spend on their accounts  – and in the last decade or so, offline accounting softwares have been usurped the by the even more convenient online cloud-based accounting solutions.


Able to be accessed online from anywhere – whether from a desktop or mobile device – and by a number of different players in your business, such as the director, accountant or bookkeeper, these online cloud-based accounting platforms are intuitively designed to accommodate each business’ accountancy needs, keeping the process as easy and efficient as possible.

How can a cloud accounting software help your business?


There are countless ways that cloud-based accounting solutions can aid businesses, but here are just a few:


  • Cloud-based accounting saves businesses huge amounts of money on accountants, whether the accountant is replaced altogether or they simply spend less hours on businesses’ accounting. 
  • All your data is backed up automatically – thanks to the cloud – and you don’t need to worry about software updates, unlike cloud-accounting softwares’ offline counterparts.
  • Cloud accounting allows you to gain an incredibly detailed birds-eye view of how your company is doing financially, in every aspect of its finances – from expenses to sales to cashflow forecasting – allowing you to see how your business is really doing with the help of the advanced reporting functionalities native to cloud-based accounting solutions.
  • Cloud-based accounting is highly collaborative and convenient since it can be accessed from both mobile and desktop devices from wherever you or the other key players in your business are, simultaneously.
  • Most businesses save in tax deductions thanks to cash flow management tools provided by cloud accounting softwares and the seamless organisation of businesses’ income and expenses.

How do you know which accountancy software to choose?


There are numerous factors to take into account when deciding which cloud accountancy software to with, and with a number of different top quality accounting softwares to choose from, it can be difficult to know how to make that decision.

Really, which accountancy software you choose should depend on your priorities and needs as a business, as well as your own personal preferences, as many of the cloud-based accounting options provide a pretty comprehensive set of features for their customers to make use of.


So, what should you be looking for?


Bank compatibility and easy reconciliation.

Pretty much all cloud-based online accounting solutions have the ability to connect to businesses’ bank accounts, as the bread and butter of any online cloud-based accounting platform.

A common rookie mistake to make when choosing a cloud-based accounting solution is forgetting to check whether your (business’) bank is compatible with the platform – if it isn’t, then you can cross it off your list of accounting options, as without bank compatibility there’s very little point in having a cloud-based accounting software at all.

Most major banks are usually catered for by these platforms – especially if the solution is based in your home country – but it’s always worth double-checking anyway.


An invoicing functionality that suits you.

Do you have a particular image in mind for how your invoices should look? Or maybe you have a specific invoice design that you use now that you want to keep exactly the same?

Whatever your invoice design preferences, you need to make sure that your chosen accounting solution accommodates this, as some can be a little limiting if you have a fancier design in mind.

Moreover, you should make sure that if you want to be able to send recurring or bulk invoices, that your chosen cloud-based solution offers this functionality.


Advanced reporting that covers what you need to know.

Again, based on your unique needs as a business, you’ll need to check that your solution and the pricing plan you’re considering from that solution – as some cloud-based accounting softwares hide more advanced reporting behind higher paywalls – provides the reports you want for the KPIs you need.


The app integrations that you need.

One of the advantages of cloud-based accounting is the extensive range of integration possibilities available to enhance your accounting experience, in addition to being able to connect your accounting to the other online aspects of your business.

Most solutions will have app integration possibilities ranging from CRM to payroll and advanced reporting, but if you have specific needs and wants with regards to the apps you need – for example, if you have an e-commerce store with WooCommerce or another e-commerce platform and want to be able to integrate with your accounting – then you should double-check before purchasing a plan that your chosen solution is able to connect with the specific apps you need.


Any specific niche accounting features you might need.

While most accountancy softwares will provide the standard of what small businesses need to execute their accounting well, some have more specialist features that your business may be able to benefit from, such as budget setting and payroll functionalities, for example.

However, if you don’t need these features then its probably not worth opting for a software – or a pricing plan – that offers them as this will incur additional costs compared to a solution that doesn’t.


A pricing plan that works for your business.

One of the key considerations for any business is keeping costs low and profit high.

Naturally then, choosing a cloud accounting solution – and choosing the right pricing plan from that chosen solution – that provides the functionalities you need at the lowest cost should be one of your top considerations when choosing a cloud-based accounting software and pricing plan.

While you want to make sure you’re choosing the best solution for your business, single-handedly comparing all your options – and the features and various pricing plans they have – can be overwhelming.


Bearing this in mind, we’ve pulled together a comparison of three of the most popular, well-equipped cloud-based accounting softwares best fit for aiding small to medium UK businesses, to make your choice a little easier.


Xero

Hailing from New Zealand, Xero’s cloud accounting software caters to over 2 million users, including thousands of accounting businesses who use Xero as their primary accounting solution, in addition to over a million small-to-medium businesses.


Pros

+ Xero has one of the most attractive, intuitive user interfaces of any cloud-based accounting platform, making accounting seem less like a chore, and more like fun, thanks to Xero’s stellar UX.

+ Xero has a number of advanced automation features that enhance the accounting experience, such as automatic invoice reminders, the ability to set up recurring invoices and one-click transaction reconciliation.


Cons

- Xero only offers a single invoice template – however, this is highly customisable so you can still make it your own.

- For businesses who work with international customers or clients, multi-currency is only available with the premium plan, while other options offer multi-currency for a smaller price.


Pricing

Xero offers three plans: starter, standard and premium, as well as a free 30-day trial to test out all of Xero’s accounting features, to help you decide which plan is right for your business. An unlimited number of users can access and manage your business’ online accounting through Xero (a feature unique to to the software).


Xero’s starter plan – at £10 per month – is the cheapest plan offered by any of the cloud-based accounting solutions discussed here, and offers all the standard features you’d expect from an accounting solution, such as sending quotes, the ability to submit VAT returns to HMRC, bank transaction reconciliation, bill and receipt capture and automatic CIS calculations and reports. 

However, it’s very restrictive – limiting users to a maximum of twenty invoices and enter five bills per month – making it an inadequate option for basically every sized business. 


The standard plan – at £24 per month – offers all the same features, but with no cap on bills or invoices, making it a great, affordable choice for many businesses.

The premium plan – at £30 per month – offers the same features, plus the ability to operate in multiple currencies, which can accommodate businesses who sell internationally.

However, Xero offers a number of paid add-ons, such as payroll, the ability to claim expenses, track projects, submit CIS returns and ‘Pay with Wise’, which – if you need these features – can rack up the monthly costs.

Read our full Xero Review


QuickBooks

A staple of US accounting, QuickBooks has been providing accounting software for businesses since the 80s, before launching their cloud-based accounting software QuickBooks Online in 2001, which now has over 4.5 million users after undergoing numerous updates.


Pros

+ Despite being more costly than its competitors generally, QuickBooks provides the least expensive option for businesses to use multi-currency as part of their cloud-based accounting experience, and converts over 140 currencies.

+ QuickBooks offers advanced, customised reporting and cashflow forecasting at even the most inexpensive pricing plan, which is rare for a cloud-based accounting platform.


Cons

- On the whole, QuickBooks online offers the most expensive pricing plans, due to the added VAT, and coveted features such as employee time tracking are only included with the most expensive plan.

- At every pricing plan, QuickBooks limits the number of users that can have access to and manage the accounting, which shouldn’t be a huge problem for small businesses, but if you want more hands on your account (up to 5) then you’d have to upgrade to the ‘plus’ package even though you might not need all of the plus features.


Pricing.

QuickBooks offers three plans: simple start, essentials and plus.


The simple start plan – at £12 per month + 20% VAT – allows users to access a pretty comprehensive range of accounting features, allowing businesses to connect their bank, manage income and expenses, send pay-enabled invoices, forecast cash flow, track mileage, create estimates and quotes, run customised reports and handle a range of task-related tasks such as preparing for self-assessment and calculating and submitting CIS.


This QuickBooks plan is truly great value for money with just one downside – only one user can access and manage the QuickBooks Online account. Nevertheless, this is a great option for businesses that can manage with only one person taking responsibility for the financial side of things.


The essentials plan – at £20 a month + 20% VAT – allows users to access all the features provided in the simple start plan plus the ability to manage bills and do business in 145+ currencies. This makes the QuickBooks essentials plan the most affordable choice for those who conduct international business.


The plus plan – at £30 a month + 20% VAT – provides all the previously mentioned features plus the ability to track stock, track employee time, see project profitability and set budgets; 5 users can access the same QuickBooks Online account with the plus plan.

Read our full QuickBooks review



Sage

As well as being the oldest accounting solution provider listed, the Sage Business Cloud Accounting platform is also the only UK-created software listed here, catering to over 800,000 UK businesses.


Pros

+ Sage is the least expensive well-equipped cloud-based accounting solution suitable for businesses.

+ Sage’s bank reconciliation process is super easy to use, and Sage automatically matches your transactions to your invoices so that all you need to do is click to approve the match and reconcile.


Cons

- Sage’s UI isn’t as attractive or intuitive as its competitors, having a more dated design and UX.

- Sage’s ‘getting started’ process isn’t as quick and easy as that of its competitors, and Sage doesn’t have as many automation features, meaning you’ll probably spend a bit more time to completing your accounting tasks.


Pricing

Sage offers three plans: start, standard and plus.


Sage’s start plan – at £12 a month – allows users to create and send invoices, track what they’re owed, enjoy automatic bank reconciliation and calculate and submit VAT. It’s pretty bare bones – and only one user can access the account – but not all businesses need accounting frills and flounces, and this is the cheapest feasible option for small businesses on the list, as there’s no limit on the number of invoices you can send each month.


The standard plan at £24 a month – comes with all prior features plus CIS management and submission, advanced reporting (with Sage Intelligence), send quotes and estimates, forecast cash flow, manage purchase invoices and snap receipts with AutoEntry, and an unlimited number of users can access the account.


The plus plan – at £30 a month – comes with all prior features, plus multi-currency and inventory management functionalities.

Read our full Sage review


Our picks for business accounting software


When it comes to choosing the right cloud-based accounting software, it should depend primarily on your needs and wants as a business, and keep in line with your budget. 

Having said this, we believe that certain cloud accounting solutions are better suited to some businesses than others, so we’ve compiled our picks to help you make the best choice for your business.


For an attractive, seamless, hassle-free accounting experience.

Xero might be the choice for you.

Particularly if you’re someone with little accounting experience – and want your online accounting experience to be as friction-free as possible – then Xero is your go-to.

As well as having an attractive interface and intuitive UX, Xero automates – or allows you to set up automation – for essentially everything, allowing you to spend as little time on your accounting as possible and operate at maximum efficiency.


For businesses who do business internationally…


QuickBooks might be the best option for you, as the accounting solution provides multi-currency functionality in the middle-range plan, making it the most affordable choice for businesses that need to be able to conduct business in multiple currencies.

QuickBooks is also a great all-rounder in general, offering a comprehensive range of features to suit the needs of any business. Having said this, it isn’t the least expensive accounting software on the market, so for businesses on a budget – that don’t need multi-currency functionality – you might want to look elsewhere.


For businesses on a budget…


The Sage business cloud accounting platform might be the best choice for you, as both their ‘start’ and ‘standard’ packages are feasible choices for businesses at £12 and £24, respectively, as they contain all the features you’d expect and need from a cloud-based accounting software.

While both Sage and Xero pricing plans appear to cost the same at the surface level, Xero offers a number of paid ‘add-ons’ which can quickly add to your monthly accounting cost. On the other hand, Sage includes some of these within the pricing plan already, for no extra cost, such as the ability to manage and submit CIS returns with the standard plan (a £5 per month add-on with Xero).