Choosing accounting software for a small business
This guide contains affiliate links, marked with an asterisk (*). If you sign up through one, Benefit Holdings may earn a commission at no extra cost to you. It doesn't change what we say: check the right choice for your business with your accountant.
The right accounting software saves you hours each month and makes Making Tax Digital straightforward. The wrong one gets abandoned after three months. The big names, Xero*, QuickBooks*, Sage* and FreeAgent*, all cover the basics well. The differences are in the detail, so ask these seven questions.
Seven questions to ask
- Does it work for Making Tax Digital? Check it's on HMRC's list for VAT, Income Tax or both, as you need.
- Does it connect to my bank? A live bank feed is what makes bookkeeping quick.
- Can I capture receipts on my phone?
- Does it do what my business needs? Invoicing, VAT, payroll, stock or projects, depending on your business.
- Does my accountant use it? If your accountant can log in and works with it every day, you'll pay less for their time.
- What does it cost after the offer ends? Introductory discounts are common; compare the full monthly price and what each plan includes.
- Is it simple enough that I'll keep using it? Try the free trial with a month of your real transactions.
A quick guide to the options
- Xero: widely used by accountants, with a large range of add-on apps.
- QuickBooks: strong on invoicing and popular with small businesses and sole traders.
- Sage: a long-established UK name, with options from sole traders up to larger firms.
- FreeAgent: built for freelancers and small businesses, and included free with some business bank accounts.
There's no single best choice. If you have an accountant, ask which they prefer; if you don't, pick the one whose free trial you find easiest.
General information only, not professional advice. Rules and products change; check GOV.UK or with an accountant before acting.