It’s never been easier or more affordable to manage your tax and accounting using small business accounting software – find the best accounting package for your needs below
UPDATED: Thanks to affordable accounting software, long gone are the days when you’d need a room full of filing cabinets to keep track of your accounts.
With accounting software, even the smallest business can easily manage expenses, create and send invoices, keep on top of taxes, and more from one centralised platform.
But it’s no longer just advisable – under Making Tax Digital, it’s becoming obligatory for nearly all businesses to use compliant software for taxes and accounting.
Under Making Tax Digital (MTD), VAT-registered businesses must keep certain records digitally and submit VAT returns using compatible software, unless exempt. MTD for income tax came into effect on 6 April 2026 for qualifying sole traders and landlords with annual qualifying income of more than £50,000. The threshold falls to more than £30,000 in April 2027 and more than £20,000 in April 2028.
That’s why we’ve taken the time to compare, contrast, and assess the best small business accounting software on the market. Discover their pricing, pros, cons, and top features, and decide which is right for your business.
| Software | Monthly price (excluding VAT) | Key Features |
|---|---|---|
| Sage Accounting | Free – £59 per month | Invoicing, cash flow management, stock management, payroll, HMRC-recognised, linked to Stripe |
| Xero | £7 – £70 per month | Unlimited users, bank connectivity, stock management, customisable reports, third-party integrations Exclusive Small Business promotion: get first 6 months 90% off by using this link. |
| Sage Accounting | £5 – £20 per month | Automatic payment categorisation, receipt capture and storage, professional invoice creation and payment links |
| Tide | Free – £24.99 per month | Integrated banking and accounting, auto-categorisation, VAT filing, profitability tracking, invoice automation |
| Quickbooks | £10 – £123 per month | Fast-growing businesses, strong reporting, CRM system, up to 25 users, bank reconciliations |
| Moss | Free and custom paid plans | Corporate cards, expense management, invoice processing, employee reimbursements, approval workflows, accounting integrations. |
| Zoho Books | Free – £165 per month | MTD-ready, multi-currency transactions, VAT filing, bank reconciliation, Zoho app integration |
| Freshbooks | £16 – £42 per month | Designed for small businesses, intuitive UX, client limits on lower plans, charges for additional users |
| Crunch | £27 – £148 per month | Easy-to-use, MTD-ready, HMRC-recognized, access to chartered accountants, VAT filing, payroll costs extra |
| Starling | Free – £14 per month | Integrated banking and bookkeeping, automated transaction categorisation, invoicing, MTD for Income Tax, VAT filing, tax estimates, financial reporting |
| ClearBooks | Free – £44 per month | UK-focused, simple to use, good value, support team works with developers |
How to choose the right provider
Every small business is different. Most small businesses can make do with basic functions like invoicing, bank reconciliation, income and expense tracking and financial report generation.
Indeed, most UK small business accounting software offers the same features, it’s just that you may feel more comfortable with how one is designed over another – and then of course, there’s the cost.
First, make a list of what you need to do in terms of bookkeeping and accounting.
- Do you need to track inventory and purchase ordering?
- Do you need to send invoices and payment reminders?
- Are you a sole trader and do you plan to do self-assessment?
- Do you have staff and a payroll to run?
- Do you need foreign currency transactions?
- Do foreign currency transactions convert to sterling?
- How many users will need to use the accounting software?
How much can you afford?
There are free accounting software options available, which may be sufficient for sole traders and businesses with straightforward finances. However, paid plans generally offer more advanced features, such as payroll, inventory management, multi-currency transactions and detailed reporting. Check what’s included before signing up, as some providers charge extra for particular features or limit the number of invoices and users.
The other change that has happened is the rise of monthly subscription as opposed to a one-off software licence. On the plus side, Software-as-a-Service (SaaS) means your tech is always up to date. The downside is that, as the months roll on, you eventually end up paying more than if you’d bought a one-off licence.
Accounting software deals for small businesses
Want to get started with one of our top accounting software providers? As a new customer, you can take advantage of any of these great deals:
- Sage – 90 per cent off for 6 months
- Xero – 90 per cent off for 6 months
- FreshBooks – 50 per cent off for first three months
- Crunch – free 14-day trial on any package
- QuickBooks – 90 per cent off for 6 months
4 questions you need to ask your UK small business accounting software supplier
- How do you back up data?
- Tell me about customer support. What are your hours and how quickly should I expect a response if I raise an issue?
- Can you tell me about a similar client who’s signed up to your software?
- Does your platform support foreign currency payments and convert them into sterling?
