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. Finding the right accounting software can help you monitor your cash flow, track transactions, and submit your taxes to HM Revenue & Customs (HMRC).
There are many different providers and programs available for small businesses in the UK, so it is important to pick the best 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.
It’s worth bearing in mind that most accounting software providers offer special introductory deals and discounts, which vary over time. We’ve used the full, non-discounted monthly price in our analysis, but you can always check with the providers for the most up-to-date offers.
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The Best Small Business Accounting Software Providers In Focus
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.
Provider | NerdWallet’s Rating | Free trial | No. of plans | Free plan available? | |
|---|---|---|---|---|---|
 | 4.4 / 5 | 30 days | 4 | Yes | |
 | 4.1 / 5 | 14 days | 6 | Yes | |
 | 4.1 / 5 | 30 days | 4 | No | |
 | 3.5 / 5 | 30 days | 5 | No | |
 | 3.4 / 5 | 30 days | 3 | No | |
 | 3.2 / 5 | 30 days | 4 | No | |
 | 3.1 / 5 | 14 days | 3 | Yes | |
 | 3.1 / 5 | 30 days | 3 | No |
Top 8 UK Accounting Software Providers
FreeAgent
30 days
4
Yes
50% off for your first six months (all paid monthly subscriptions). 50% off for your first year (all paid yearly subscriptions).
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. If you bank elsewhere, it is £19 (+ VAT) a month. From time to time special offers are available.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. For more information, read our FreeAgent accounting software review.
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 fee | Free with NatWest Group bank account, otherwise £19 (+ VAT) for sole traders |
| Making Tax Digital compliant | Yes |
| Monthly payroll costs | Free |
| Multi-user access | Yes |
| Multiple currency | Yes |
| Cash-flow forecasting | Yes |
NerdWallet's Pros & 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.
Zoho Books
14 days
6
Yes
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. Otherwise, the standard plan costs £12 (+ VAT) a month. From time to time special offers are available.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. Our Zoho Books accounting software review has all the info.
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 fee | Free for businesses with less than £35,000 revenue, otherwise £12 (+ VAT) for a Standard plan |
| Making Tax Digital compliant | Yes |
| Monthly payroll costs | Payroll features not included with any plan |
| Multi-user access | Yes (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 forecasting | Yes (Premium, Elite and Ultimate plans only) |
NerdWallet's Pros & 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.
Xero
30 days
4
No
Try Xero with 90% off for six months*
NerdWallet's Review Summary
Xero accounting software comes with a choice of four plans: Ignite, Grow, Comprehensive, and Ultimate. At full price, Xero’s cheapest plan is fairly expensive compared with the other providers on offer. From time to time special offers are available.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. For more on the pros and cons, read our Xero accounting software review.
Xero key features:
- Cheap payroll: 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 | £16 (+ VAT) for the Ignite plan |
| Making Tax Digital compliant | Yes |
| Monthly payroll costs | The Ignite plan does not come with payroll functionality, while the Grow plan includes payroll for one person at no extra cost. The Comprehensive plan includes payroll for five people at no extra cost. The Ultimate plan comes with payroll for up to 10 people included at no extra cost, then £1 (+ VAT) per month extra per person. |
| Multi-user access | Yes |
| Multiple currency | Yes (Comprehensive and Ultimate plans only) |
| Cash-flow forecasting | Yes |
NerdWallet's Pros & 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, with payroll included for a limited number of users in the cost of most plans.
- You can have an unlimited number of users logged into your Xero account at no extra cost.
- Short-term cash-flow forecasting is available with every plan.
Cons:
- The entry-level Xero Ignite 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 Comprehensive or Ultimate plans.
QuickBooks
30 days
5
No
Get 90% off for 7 months.
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. From time to time special offers may be available.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. NerdWallet UK’s QuickBooks accounting software review has more information.
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: All QuickBooks plans are MTD compliant and, with the exception of the Self-Employed plan, allow users to submit VAT directly to HMRC.
| Cheapest monthly fee | £10 (+ VAT) for Self-Employed plan |
| Making Tax Digital compliant | Yes |
| Monthly payroll costs | £10.50 (+ VAT) for five employees |
| Multi-user access | Yes (Not all plans) ) |
| Multiple currency | Yes (Essentials, Plus, and Advanced only) |
| Cash-flow forecasting | Yes (apart from Self-Employed plan) |
NerdWallet's Pros & 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 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.
Sage
30 days
3
No
Get 6 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 £15 (+ VAT) per month, is designed for VAT-registered sole traders and small businesses. From time to time special offers are available.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. For an in-depth rundown of the features on offer, check out our Sage accounting software review.
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 | £15 (+ VAT) for Accounting Start plan |
| Making Tax digital compliant | Yes |
| Monthly payroll costs | £10 (+ VAT) per month for up to five employees |
| Multi-user access | Yes (Accounting Standard and Accounting Plus only) |
| Multiple currency | Yes (Accounting Plus only) |
| Cash-flow forecasting | Yes (Accounting Standard and Accounting Plus only) |
NerdWallet's Pros & 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.
FreshBooks
30 days
4
No
50% off for 3 Months
NerdWallet's Review Summary
FreshBooks offers a choice of four plans, starting at £15 (+ VAT) per month for the Lite plan. Freshbooks also offers Plus, Premium and Select plans. From time to time special offers are available.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. For all the information, take a look at NerdWallet UK’s FreshBooks accounting software review.
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 compliant | Yes |
| Monthly payroll costs | Payroll features not available in the UK |
| Multi-user access | 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 forecasting | No |
NerdWallet's Pros & 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.
Ember
14 days
3
Yes
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. From time to time special offers are available.
However, even the more expensive Ember plans are lighter on features than some of the other providers we surveyed. For the details, check out our review of Ember’s accounting software.
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 fee | Free 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 compliant | Yes |
| Monthly payroll costs | £20 (+ VAT) for five employees with the Unlimited plan |
| Multi-user access | No |
| Multiple currency | Yes (Pro and Unlimited only) |
| Cash-flow forecasting | No |
NerdWallet's Pros & 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).
ClearBooks
30 days
3
No
75% off for 6 months.
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. From time to time special offers are available.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. Read our Clear Books accounting software review for more.
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 compliant | Yes |
| Monthly payroll costs | £5.40 (+VAT) for two employees, with additional employees costing £2.70 (+ VAT) per person per month. |
| Multi-user access | Yes |
| Multiple currency | Yes (Large plan only) |
| Cash-flow forecasting | No |
NerdWallet's Pros & 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.
This top eight only contains business accounting software providers reviewed by NerdWallet UK.
What is 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:
- connect to your business bank account via a bank feed
- track your cash flow and run financial reports
- forecast your cash flow
- upload bills and receipts
- create and send invoices
- send estimates to clients
- set up automated reminders
- track expenses
- track the time you, and your employees, spend on projects
- run a monthly payroll
- file your VAT returns
- file your self-assessment tax return
Do I need accounting software for my business?
Thanks to the government’s Making Tax Digital scheme, all VAT-registered businesses now need to keep digital records and use MTD-compatible accounting software to submit their VAT returns electronically.
So if you run a VAT-registered business, the answer is yes: you do need accounting software, and that software must be compliant with Making Tax Digital.
For other businesses – like sole traders who aren’t registered for VAT and side-hustlers making a small profit on their trading – accounting software isn’t currently a legal requirement.
However, having accounting software could make it easier for you to stay on top of your business finances, as well as saving you time and taking some of the stress out of keeping on top of your books.
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.
Bookkeeping for small businesses
Bookkeeping refers to the process of collecting and recording all the financial information relevant to your business, including what you spend and how much you receive in payments.
Staying on top of your books should help you understand the precise financial position of your business much more clearly, allowing you to ultimately make better financial decisions for your business. This could also take some of the stress out of filing your business tax return.
As a small business owner, your basic bookkeeping duties involve recording every business transaction – both sales and purchases – and reconciling those transactions – that is, cross-referencing your books against your business bank account to make sure every penny is exactly where it’s supposed to be.
You can use small business accounting software to automate aspects of the bookkeeping process and to make staying on top of your books less of a chore.
Bear in mind that if you run a limited company, you are legally obliged to keep records about your company and your business finances. Financial records must be retained for at least six years from the end of the last company financial year they relate to. For more specifics about which records you have to hold on to for longer, check the Gov.uk website.
If you are self-employed, you must keep hold of financial records relating to any given tax year for five years from the 31 January following the tax year in question. If you are subject to an investigation by HMRC or if you submitted your tax returns late, you’ll need to hold on to these records for even longer.
» MORE: Business tax in the UK
How to pick the best UK accounting software for you
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:
- Do you want to be able to connect your business bank account to your accounting software? If so, you will need to check that your chosen accounting software is compatible with your bank.
- How much do you want to pay for your accounting software?
- Do you need to run payroll for multiple employees?
- How many users do you need to regularly access your accounting software?
- Do you want your accountant to be able to access your login?
- Are you registered for VAT and need to submit VAT returns to HMRC?
- Would you like assistance with your self-assessment tax returns?
- How important to you is a well-reviewed mobile app?
- Do you need to carry out accounting in multiple currencies, not just pound sterling?
- Would you like to forecast your cash flow?
What are the different types of accounting software?
Our sample of UK accounting software providers takes in a range of programs and plans, all of which are designed with different small businesses in mind.
Some UK accounting software providers have specific plans for sole traders, landlords, partnerships, and limited company owners. Others organise their software plans based on the size or monthly revenue of your business or by how comprehensive the plan’s features are.
When comparing UK accounting software providers, try to find a plan and program that is suited to the specific needs of your business.
For example, if you need to file VAT returns, then it’s essential that you use accounting software that allows for MTD VAT filing. And if you do business in multiple currencies, then you’ll probably want to pay a bit extra for a plan which has multi-currency compatibility.
How much does accounting software cost?
The cost of accounting software varies greatly based on the comprehensiveness of various plans and the specific features on offer.
The cheapest plans in our sample are free to certain businesses. And as a rough guide, other basic, comparatively low-cost plans start at around £10 per month (plus VAT and exclusive of special offers).
For an accounting software plan with more than just the basic features, you should expect to pay £24 to £33 per month (plus VAT).
Meanwhile, for larger businesses in search of plans with all the bells and whistles, prices can be much higher. The most expensive plan in our sample costs £199 per month (plus VAT), while the second most expensive is £90 per month (plus VAT).
Free accounting software for small businesses
Some accounting software plans are free to certain businesses. FreeAgent, for example, offers a free plan for customers with a NatWest, Royal Bank of Scotland, Ulster Bank or Mettle business account.
Meanwhile, Zoho Books offers a basic no-cost plan designed for “solopreneurs and micro businesses,” while Ember offers free plans for sole traders and limited company directors with average monthly revenue up to £1,000.
Pros and cons of accounting software
A key advantage of accounting software is that it can automate or speed up essential financial processes, saving you time.
From automatically keeping track of expenses to tools that generate recurring invoices, small business accounting software programs are packed with time-saving features, freeing you up to focus on growing your business.
Similarly, the process of bank reconciliation – which involves checking everything is coming and going as it should be from your business bank account – can be streamlined with the use of software that connects to your bank account, making it easier to stay on top of your business finances.
And when it comes to taxes and audits, accounting software can help by keeping all your financial information up to date and in the right place.
Ultimately, accounting software – when used properly – should result in faster financial processes, fewer errors, smooth automation and more comprehensive digital record keeping.
The chief disadvantage of using accounting software is that you’ll probably have to pay for it. While there are a few free plans on the market, the accounting software plans with the most features tend to come with a fee. The cost of accounting software could range from £10 (+VAT) to as much as £199 (+VAT) per month.
You may also find – especially at first – that getting to grips with new software can be quite time consuming, and computerised bookkeeping could be less flexible than keeping manual accounts. If you have to pay for software support as an add-on, then this could take the price of your plan even higher.
A final disadvantage of accounting software is that while there are many different plans on the market – designed for many different types of businesses – firms operating in highly specialised sectors may find that their needs aren’t met by off-the-shelf accounting software packages.
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
As a business owner, with specific needs and requirements, only you can know what accounting software plan will be best suited to your circumstances and the needs of your business. Ask yourself what features and capabilities are most important to you, and make sure the accounting software you choose ticks those particular boxes.
Many accounting software plans are explicitly designed for either sole traders or limited company directors. Make sure you don’t end up paying extra for a more comprehensive limited company plan if you don’t need the specific features it offers.
Some accounting software providers offer plans designed explicitly for landlords. FreeAgent, for example, has a Landlord plan that offers specific property-based insights.
As ever, the best place to start when comparing accounting software plans is to work out what features and functionalities are most important to you. Then you can check what’s on offer with various providers to make sure your plan of choice is well tailored to your specific needs.
If you run a side-hustle and only make a small amount of profit from your trading, then you probably don’t need to break the bank on accounting software. Yes, you could pay extra for fancy optional add-ons like multi-currency transactions and payroll functionality but forking out for these features will only be worth it if you plan to use them.
If you’re just looking for basic functionality designed for very small businesses, then many of the cheaper (or even free) accounting software plans could be right for you. Zoho Books offers a free plan specifically for micro businesses, while Ember offers free accounting software for sole traders with average profits up to £1,000 per month.
Some accounting software plans in our sample come with integrated payroll, but what you get depends on the provider.
FreeAgent, for example, comes with fully integrated payroll as standard, while Xero comes with free payroll for a limited number of employees, depending on which plan you choose.
Other accounting software plans in our sample offer payroll as an add-on. In these cases, expect to pay between £10 and £20 (+VAT) per month for payroll for five employees.
It’s also worth bearing in mind that some accounting software providers, such as Zoho Books and FreshBooks, don’t offer integrated payroll at all in the UK. So if integrated payroll is top of your accounting software wish list, make sure it’s available with your chosen provider.
It’s ultimately up to you whether you want to use the services of a traditional accountant in conjunction with your accounting software.
You might decide to save on costs and just use the software, or you could choose to retain the expertise and human touch of a professional accountant alongside your software of choice.
Since accounting software programs are designed to automate and assist with financial processes, you may find that certain tasks – like filing tax returns – are much easier when you have help from an accountant.
There is no reason why you can’t combine the services of an accountant with your accounting software. Certain accounting software providers – including Zoho Books, Sage, FreeAgent, Xero, and QuickBooks – even allow you to invite your accountant to your plan for free.
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.
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.
While we try to provide you with accurate information, the providers can change the terms of their products at any time, therefore it is advisable to check the terms before you proceed.
You can view our full review methodology here.
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