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Published 01 May 2024
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Best Accounting Software for UK Small Businesses June 2024

Finding the right accounting software for your business can make keeping on top of your finances much easier. But where should you start? Compare the pros and cons of NerdWallet’s top eight best accounting software providers in the UK below.

Many or all of the products and brands we promote and feature including our ‘Partner Spotlights’ are from our partners who compensate us. However, this does not influence our editorial opinion found in articles, reviews and our ‘Best’ tables. Our opinion is our own. Read more on our methodology here.

Whether you pay for an accountant or do your own taxes, accounting software can be a great way of keeping on top of your business finances, especially if used in tandem with a business bank account. It can help you monitor your cash flow, track transactions, and submit your taxes to HM Revenue & Customs (HMRC). 

In this challenging economic climate for UK businesses, coming off the back of a period of persistent inflation and with the economy still dogged by low consumer confidence, it is vital that you get good value for money from the tools and services your business relies on. The right accounting software can give your business the boost it needs to stay on top of everything tax-related, leaving you with more time to focus on growing your business.

There are many different providers and plans available for UK businesses, so it is important to pick the right accounting software for your needs. 

That’s why we’ve picked our top eight accounting software providers based on our own analysis of all the UK providers reviewed on our site and what we believe matters most to businesses. This includes reviewing their monthly fees, whether all plans on offer comply with the UK government’s Making Tax Digital (MTD) initiative, and the quality of a provider’s mobile app.

Editor’s Picks

Accounting Software

Editor’s Pick

Free trial

No. of plans

Free plan available?

 

FreeAgent
Overall/Payroll
30 days
4
Yes

Zoho Books
Free/App
14 days
6
Yes

Xero
Multiple Users
30 days
4
No

Sage
24/7 Customer Service
30 days
3
No

FreshBooks
Time Tracking
30 days
4
No

The editor’s picks listed above are based on NerdWallet’s editorial team’s analysis of all the accounting software providers reviewed on our site. The team has assessed eight accounting software providers to evaluate which brands offer standout features that may be important for your business.

Editor’s picks are our own opinion and don’t constitute advice, recommendation or suitability for your financial circumstances. They are editorially independent of any relationship NerdWallet has with partners who may compensate us.

Top 8 UK Accounting Software Providers

This top eight is from eight business accounting software providers that NerdWallet evaluated and reviewed. Others are available. Find out how we use ‘best’ and our guide to ratings.

4.4

FreeAgent

FreeAgent

FreeAgent
  • Free trial
    30 days
  • No. of plans
    4
  • Free plan available?
    Yes
  • Offer
    n/a
NERDWALLET’S REVIEW SUMMARY

FreeAgent offers business accounting software for sole traders, landlords, limited companies, and partnerships. You can get a free FreeAgent account if you bank with NatWest, Royal Bank of Scotland or Ulster Bank, or if you have a Mettle bank account and make at least one transaction a month.

FreeAgent accounting software is packed with useful features for businesses, which is why it scores so highly in our rankings, and scores highly for its app on Google Play and the App Store.

FreeAgent key features:

  • Designed for small businesses: You can easily use the software to work with an accountant or bookkeeper if you choose to.
  • Useful tools: Payroll functions and cash-flow projections are included as standard with every plan.
  • Foreign currency: FreeAgent is compatible with multiple currencies.
  • Making Tax Digital: All FreeAgent plans are fully compliant with Making Tax Digital and allow you to submit VAT returns directly to HM Revenue & Customs (HMRC). 
  • Potential for free access: If you have a business account with NatWest, RBS, Ulster Bank or Mettle, you can open a free account with  FreeAgent.
Cheapest monthly feeFree with NatWest Group bank account, otherwise £19 (+ VAT) for sole traders
Making Tax Digital compliantYes
Monthly payroll costsFree
Multi-user accessYes
Multiple currency Yes
Cash-flow forecastingYes
Pros and cons

Pros:

  • Completely free if you have a business account with NatWest, RBS or Ulster Bank – or if you have a Mettle bank account and make at least one transaction per month.
  • Every FreeAgent plan is Making Tax Digital (MTD) compliant.
  • FreeAgent’s payroll function and cash-flow projections are free with every plan.

Cons:

  • After the introductory offer has ended, FreeAgent’s sole trader plan is more expensive than many other comparable products.
  • Customer service hours over the phone and via email are limited to Monday to Thursday, 9am to 5pm, and Fridays, 9am to 4pm.

4.2

Xero

Xero

Xero
  • Free trial
    30 days
  • No. of plans
    4
  • Free plan available?
    No
  • Offer
    Get 50% off for 3 months
NERDWALLET’S REVIEW SUMMARY

Xero accounting software comes with a choice of four plans: Starter, Standard, Premium, and Ultimate. At full price, Xero’s cheapest plan is fairly expensive compared with the other providers on offer.

However, Xero’s low payroll costs and the inclusion of other useful features – such as cash-flow forecasting and unlimited users for each account – mean the software scored highly in our rankings.

Xero key features:

  • Cheap payroll: While not included for free, Xero’s payroll features are favourably priced compared to other providers. 
  • Making Tax Digital: Xero is compliant with Making Tax Digital, and Xero users can submit their VAT returns directly to HMRC. 
  • Multi-user access: There is no limit to how many users can be logged in to a Xero account. 
  • Cash-flow projections: Short-term cash-flow forecasting is included with every plan at no extra cost. 
Cheapest monthly fee£15 (+ VAT) for the Starter plan
Making Tax Digital compliantYes
Monthly payroll costsStarter, Standard and Premium plans: £5 (+VAT) for up to five people, then £1 (+VAT) per month extra per person

Ultimate Plan: Up to 10 people included at no extra cost, then £1 (+VAT) per month extra per person
Multi-user accessYes
Multiple currency Yes (Premium and Ultimate plans only)
Cash-flow forecastingYes
Pros and cons

Pros:

  • Every Xero account is Making Tax Digital-compliant.
  • You can submit MTD-compliant VAT returns directly to HMRC.
  • Xero’s payroll features are cheaper than many of its competitors.
  • You can have an unlimited number of users logged into your Xero account at no extra cost.
  • Cash-flow forecasting (for seven or 30 days) is available with every plan.

Cons:

  • The entry-level Xero Starter plan is more expensive than comparable plans elsewhere.
  • Xero’s customer service options are limited, despite claiming to offer 24/7 online support.
  • You can only access multiple currencies if you pay for the more expensive Premium or Ultimate plans.

4.1

Zoho Books

Zoho Books

Zoho Books
  • Free trial
    14 days
  • No. of plans
    6
  • Free plan available?
    Yes
  • Offer
    n/a
NERDWALLET’S REVIEW SUMMARY

Zoho Books has six account tiers, including Standard, Professional, Premium, Elite, and Ultimate. Zoho Books also offers a free plan for businesses with a revenue of less than £35,000 per year. This means Zoho Books scores favourably for price.

While none of the plans have built-in payroll functionality, Zoho Books does offer useful features such as cash-flow forecasting with its more expensive packages. The Zoho Books app also scores highly, with positive user ratings on Google Play and the App Store. 

Zoho Books key features: 

  • Free plan: Businesses with a turnover of less than £35,000 can get a Zoho Books account for free. 
  • Plenty of choice: Users can pick from one of six plans – each at a different price point and offering different features, with paid plans offering increasing levels of multi-user access.
  • Highly rated app: The Zoho Books app is rated favourably by users on both Google Play and the App Store. 
  • Making Tax Digital: Zoho Books is fully MTD compliant, and Zoho Books users can submit VAT returns directly to HMRC.
Cheapest monthly feeFree for businesses with less than £35,000 revenue, otherwise £12 (+ VAT) for a Standard plan
Making Tax Digital compliantYes
Monthly payroll costsPayroll features not included with any plan
Multi-user accessYes (Free plan: Just you and your accountant. Standard: Invite three users. Professional: Invite five users. Premium and Elite: Invite 10 users. Ultimate: Invite 15 users) 
Multiple currency Yes (Professional and Premium: one foreign currency per contact. Elite and Ultimate: multiple currencies per contact)
Cash-flow forecastingYes (Premium, Elite and Ultimate plans only)
Pros and cons

Pros:

  • Businesses with annual revenue of less than £35,000 can get a basic account for free.
  • Every Zoho Books plan is Making Tax Digital-compliant.
  • You can submit MTD-compliant VAT returns directly to HMRC.
  • Every paid Zoho Books plan comes with an enhanced level of multi-user access.
  • Zoho Books’ app has good scores on both Google Play and the App Store.

Cons:

  • Payroll features aren’t included with a Zoho Books account, and Zoho Payroll integration is currently only available in India and the USA.
  • Cash-flow forecasting is locked behind the more expensive Zoho Books plans.
  • Multi-currency handling is only accessible at the Professional tier and above.
  • The free Zoho Books plan only allows access for one user and one accountant.
  • At £199 per month, the Zoho Books Ultimate plan is the most expensive plan in our sample.

3.4

Sage

Sage

Sage
  • Free trial
    30 days
  • No. of plans
    3
  • Free plan available?
    No
  • Offer
    Get 3 months free
NERDWALLET’S REVIEW SUMMARY

Sage offers three plans: Accounting Start, Accounting Standard, and Accounting Plus, with features varying across the three plans. The Sage Accounting Start plan, priced at £14 (+ VAT) per month, is designed for VAT-registered sole traders and small businesses.

The Accounting Standard plan comes with additional cash-flow features and unlimited user access, while the Accounting Plus plan is the only option with multi-currency support.

Sage key features:

  • Unlimited users: Sage’s Standard and Plus plans allow an unlimited number of users to access the software. 
  • Cash-flow forecasting: Business owners with Sage’s Standard and Plus plans have access to cash-flow forecasting. 
  • Making Tax Digital: All Sage plans are MTD compliant and allow users to submit VAT returns directly to HMRC.
Cheapest monthly fee£14 (+VAT) for Accounting Start plan
Making Tax digital compliantYes
Monthly payroll costs£10 (+ VAT) per month for up to five employees
Multi-user accessYes (Accounting Standard and Accounting Plus only)
Multiple currency Yes (Accounting Plus only)
Cash-flow forecastingYes (Accounting Standard and Accounting Plus only)
Pros and cons

Pros:

  • Every Sage account is Making Tax Digital-compliant.
  • You can submit MTD-compliant VAT returns directly to HMRC.
  • Cash-flow forecasts are available with both Sage’s Standard and Plus plans.
  • Standard and Plus Sage plans allow for unlimited users.

Cons:

  • Sage provides limited free customer service, with telephone assistance potentially requiring an extra subscription to Sage Cover.
  • Cash-flow forecasting is only available for Standard and Plus plan members.
  • Multi-currency accounting is only available for Plus plan members.
  • The Sage accounting app on Google Play has below-average reviews.

3.2

FreshBooks

FreshBooks

FreshBooks
  • Free trial
    30 days
  • No. of plans
    4
  • Free plan available?
    No
  • Offer
    n/a
NERDWALLET’S REVIEW SUMMARY

FreshBooks offers a choice of four plans, starting at £15 (+VAT) per month for the Lite plan. At full price, this plan is fairly expensive compared to the cheapest plans on offer with other providers. Freshbooks also offers Plus, Premium and Select plans.

FreshBooks allows you to work in any currency you choose. FreshBooks also boasts unlimited time tracking, so you can log the billable hours you or your team have spent on projects. 

FreshBooks key features:

  • Unlimited Time Tracking: FreshBooks is great for easily logging an unlimited number of billable hours, which you can then add to your invoices.
  • Foreign Currency: FreshBooks allows users to send invoices and track expenses in any currency you choose.
  • Making Tax Digital: All plans on offer with FreshBooks are MTD compliant, and all come with the ability to submit VAT returns directly to HMRC.
Cheapest monthly fee£15 (+VAT) for Lite plan
Making Tax Digital compliantYes
Monthly payroll costsPayroll features not available in the UK
Multi-user accessNo for Lite, which is a single-user plan. Otherwise, yes – you can invite your accountant with Plus, Premium, and Select plans. You can also add additional users to any plan for a monthly fee of £8 (+VAT) per user. Select comes with two team member accounts included.
Multiple currency Yes
Cash-flow forecastingNo
Pros and cons

Pros:

  • Ability to submit VAT tax returns directly to HMRC.
  • Every FreshBooks plan is Making Tax Digital-compliant.
  • FreshBooks allows you to send invoices and track expenses in any currency.
  • Unlimited time tracking means you can easily log your billable hours and add them to your invoices.

Cons:

  • Payroll features aren’t available in the UK and are only available to be integrated for an extra cost in the US version of FreshBooks.
  • It costs an extra £8 (+VAT) per person, per month for multi-user access.
  • Cash-flow forecasting requires a separate app integration.
  • Customer support options are limited.

3.1

Ember

Ember

Ember
  • Free trial
    14 days
  • No. of plans
    3
  • Free plan available?
    Yes
  • Offer
    n/a
NERDWALLET’S REVIEW SUMMARY

Ember’s stand-out offering is a free Starter plan for limited companies or sole traders with an average monthly revenue of up to £1,000. This means Ember scores very favourably on price compared with other accounting software providers. Ember may be a good choice if your business is under the £1,000 per month revenue threshold and you don’t want to pay for accounting software.

Ember offers three plans in total. The Pro plan is available for sole traders with an average monthly revenue of up to £5,000 and limited companies with an average monthly revenue of up to £10,000. Ember’s more expensive Unlimited plan is available for sole traders with an average monthly revenue over £5,000 and limited companies with an average monthly revenue over £10,000. 

However, even the more expensive Ember plans are lighter on features than some of the other providers we surveyed. 

Ember key features:

  • Free plan: Ember offers a free Starter plan for businesses with average monthly revenues up to £1,000, making it ideal for side-hustlers and the newly self-employed. 
  • Competitive prices: For a sole trader, Ember’s Unlimited plan compares favourably on price with other providers’ most expensive plans. 
  • Making Tax Digital: Ember’s plans are Making Tax Digital compliant, and Pro and Unlimited users can submit VAT returns directly to HMRC. 
  • Multiple currencies: With Ember’s Pro and Unlimited plans, you can have multi-currency transactions.
Cheapest monthly feeFree for businesses with less than £1,000 average monthly revenue, otherwise £9 (+ VAT) per month for sole traders with average monthly revenue up to £5,000
Making Tax Digital compliantYes
Monthly payroll costs£20 (+ VAT) for five employees with the Unlimited plan
Multi-user accessNo
Multiple currency Yes (Pro and Unlimited only)
Cash-flow forecastingNo
Pros and cons

Pros:

  • For businesses with an average monthly revenue of up to £1,000, Ember offers a free Starter plan.
  • Ember is Making Tax Digital compliant.
  • With Pro and Unlimited plans, you can use Ember to submit VAT returns directly to HMRC.
  • Multi-currency transactions are available with Ember’s Pro and Unlimited plans.

Cons:

  • The Ember app has below average Google Play reviews.
  • Ember doesn’t feature multi-user access. 
  • Ember’s payroll functionality is more expensive than other providers we surveyed.
  • Ember doesn’t offer cash-flow forecasting with any of its plans. 
  • If you want to use Ember to submit your self-assessment tax return to HMRC, you have to pay extra (prices start at £129 + VAT).

3.1

Clear Books

ClearBooks

ClearBooks
  • Free trial
    30 days
  • No. of plans
    3
  • Free plan available?
    No
  • Offer
    n/a
NERDWALLET’S REVIEW SUMMARY

Clear Books offers three plans, starting at £13.50 (+VAT) per month for the Small plan, which only provides access to key features. The £29-per-month (+VAT) Medium plan adds VAT reporting, while the more expensive Large plan includes advanced features like multi-currency banking. At £36 (+VAT) per month, the Large plan is one of the cheapest advanced plans out of all the accounting software providers in our sample.

The accounting software plans on offer with Clear Books are designed to be suitable for all business types, so there are options for sole traders, partnerships, and limited companies. 

Clear Books key features:

  • Payroll functionality: Clear Books accounting software comes with payroll functionality. Payroll for two employees costs £5.40 (+VAT) per month, with the option to add additional employees for £2.70 (+VAT) per person per month.  
  • Multi-user access: You can add multiple users to your Clear Books account, making it easy to collaborate with accountants, employees, or directors.
  • Making Tax Digital: All Clear Books plans are compliant with Making Tax Digital, although you can only submit MTD VAT returns with the Medium and Large Clear Books plans. 
Cheapest monthly fee£13.50 (+VAT) for Small plan
Making Tax Digital compliantYes
Monthly payroll costs£5.40 (+VAT) for two employees, with additional employees costing £2.70 (+VAT) per person per month.
Multi-user accessYes
Multiple currency Yes (Large plan only)
Cash-flow forecastingNo 
Pros and cons

Pros:

  • All Clear Books plans are Making Tax Digital-compliant.
  • Clear Books Medium and Large plan users can submit VAT returns directly to HMRC.
  • Clear Books allows for multiple user access.
  • Clear Books’ accounting software comes with payroll functionality. Fees vary depending on how many employees your business has.

Cons:

  • You cannot submit your VAT returns directly to HMRC if you are on the Small plan.
  • Clear Books’ payroll function is at the more expensive end of the spectrum when compared to other accounting software providers.
  • Multi-currency accounting is only available for Large plan users.
  • Clear Books does not offer cash-flow forecasting.
  • Compared with many of the other accounting software providers in our sample, the Clear Books app is not very highly rated on either the App Store or Google Play.

3.0

QuickBooks

QuickBooks

QuickBooks
  • Free trial
    30 days
  • No. of plans
    5
  • Free plan available?
    No
  • Offer
    n/a
NERDWALLET’S REVIEW SUMMARY

QuickBooks accounting software comes with five distinct plans, each one catering to a specific type of business. The Self-Employed plan is the cheapest at £10 (+ VAT) per month. QuickBooks also offers Simple Start, Essentials, Plus, and Advanced plans.

With the more advanced QuickBooks plans, features include some level of multi-user functionality and foreign currency payments. If you need it, payroll functionality is available as an optional add-on.

QuickBooks key features:

  • Tailored plans: Choose from a range of plans to suit your business – for example, if you’re a sole trader and you’re not VAT registered, QuickBooks offers a Self-Employed plan specifically designed to help you submit your tax return to HMRC.
  • Cash-flow forecasting: QuickBooks offers cash-flow insights with its Simple Start, Essentials, Plus and Advanced plans. 
  • Making Tax Digital: With the exception of the Self-Employed plan, all QuickBooks plans are MTD compliant and allow users to submit VAT directly to HMRC.
Cheapest monthly fee£10 (+ VAT) for Self-Employed plan
Making Tax Digital compliantYes (apart from Self-Employed plan)
Monthly payroll costs£10.50 (+VAT) for five employees
Multi-user accessYes (Not all plans) )
Multiple currency Yes (Essentials, Plus, and Advanced only)
Cash-flow forecastingYes (apart from Self-Employed plan)
Pros and cons

Pros:

  • Users can choose from a wide range of plans, including its Self-Employed plan, each tailored for the needs of specific businesses.
  • Cash-flow insights are included with every plan apart from the Self-Employed plan.
  • All QuickBooks plans apart from the Self-Employed plan are MTD compliant. 
  • With the exception of the Self-Employed plan, all QuickBooks plans allow users to submit VAT directly to HMRC.

Cons:

  • Payroll is an optional add-on and is not included as standard with any plan.
  • Only the three most expensive plans allow for multi-currency transactions.
  • Multi-user access is only available with the three most expensive plans.
  • At £90 per month (+ VAT), the QuickBooks Advanced plan is one of the most expensive accounting plans in our sample.

This top eight only contains business accounting software providers reviewed by NerdWallet UK.

The pros and cons featured here are chosen by us based on our expert, research-based opinions. They are unlikely to be the only product features and restrictions that you should consider. Pros and cons are subjective, and you should align them to your own personal and business circumstances. Information was correct at the time of publication but may have changed since.

Top 8 UK Accounting Software Providers: Summary

This top eight is from eight business accounting software providers that NerdWallet evaluated and reviewed. Others are available. Find out how we use ‘best’ and our guide to ratings.

ProviderStar ratingFree trialNo. of plansFree plan available?
FreeAgent30 days4Yes
Xero30 days4No
Zoho Books14 days6Yes
Sage30 days3No
FreshBooks30 days4No
Ember14 days3Yes
Clear Books30 days3No
QuickBooks30 days5No

What is business accounting software?

Accounting software is a type of digital platform that allows you to monitor and track your business transactions. 

Typically, you will be able to access your accounting software through your web browser or via a mobile app, using a cloud-based system, or as downloadable software on your computer. This means you can keep track of your business’s finances wherever you are.

The features offered with accounting software vary from provider to provider, and from plan to plan, and may include the ability to:

What is Making Tax Digital?

The Making Tax Digital (MTD) scheme is part of the government’s plans to digitise the UK’s tax system.

At present, it means that all VAT-registered businesses in the UK must keep digital records and submit their VAT tax returns through MTD-compliant software. So you must choose an accounting software provider that is MTD compatible if your business is registered for VAT.

From April 2026 and 2027 (depending on their income), self-employed business owners and landlords in the UK will also be required to submit their income tax returns via MTD-compliant software. It might be a good idea, therefore, to select an MTD-compliant plan ahead of these changes.

» MORE: Business tax in the UK

How to pick a UK accounting software provider

To work out what you need from your accounting software, and therefore which provider to go with, you can start by asking yourself the following questions:

UK Accounting Software Methodology

NerdWallet evaluated and reviewed eight business accounting software providers. Collectively, these accounts represent the largest providers by internet search traffic, along with notable or emerging players in the industry.

We considered more than 10 data points for each provider, scoring them on fees, Making Tax Digital-compliance, and app reviews, among other factors. This information was gathered from each provider’s website and company representatives. In addition, data is collected regularly and reviewed by our editorial team for consistency and accuracy.

Using the same data across all products and features we were able to create star ratings presented on a scale of one to five stars, where a one-star score represents ‘poor’ and a five-star score represents ‘excellent’.

Frequently asked questions

Is there free accounting software?

Yes, it is possible to access free accounting software. However, these free plans may have a restricted number of features when compared to paid-for plans. So it is always worth researching what features a free plan contains, and whether it is suitable for the full range of your business needs.

What does ‘cloud-based’ software mean?

If an accounting software plan or provider is ‘cloud-based’, this means that you access it online through your web browser or mobile app, rather than through a piece of software you download on to your computer.

This means that you will be able to access your accounting software from anywhere, and on any device, as long as you have wi-fi and your login details.

Review methodology

At NerdWallet UK, we base our reviews and our ‘Best’ pages on the results of surveys we undertook about what was important to people who use these products. This allows us to look at products impartially of any commercial arrangements we have and fairly rate the products on the same set of criteria.

Best means our ‘Best’ and is based only on what products we have aligned to our surveys, which form the basis of our reviews and ratings. This means that there will be other products on the market that we have not included in our ‘Best’ pages. Best does not mean it’s best for you, nor does it mean the ‘cheapest’.

Our reviews may display lenders’ rates. This additional information has not been included in our evaluations but is still very important when choosing a product. Rates offered can depend on circumstances, amount and term. Always check details before proceeding with any financial product.

Product details reflect the information that was available at that time but may have changed since. We strive to give you a review on as many products as possible, but there will be products not included on the market. The review is our opinion, but it does not constitute advice, recommendation or suitability for your financial circumstances.

You can view our full review methodology here.

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