Managing finances is one of the most critical aspects of running a small business, and having the right accounting software can make a significant difference. With so many options available in the UK, choosing the best accounting software for your small business in 2024 can be overwhelming. This guide will help you navigate through the top options, focusing on ease of use, features, pricing, and customer support to help you make an informed decision.

1. Xero

Xero is a cloud-based accounting software that has become a popular choice among UK small businesses. Known for its user-friendly interface and powerful features, Xero is suitable for a wide range of industries.

Key Features:

  • Real-time financial reporting
  • Integration with over 800 business apps
  • Automated bank reconciliation
  • Payroll management
  • VAT submission directly to HMRC

Pricing: Plans start at £14 per month, with additional costs for payroll.

Why Choose Xero?
Xero is ideal for businesses that want a comprehensive accounting solution with robust reporting and app integration capabilities.

2. QuickBooks Online

QuickBooks Online is another leading accounting software used by small businesses across the UK. It’s particularly well-suited for businesses that need scalable solutions as they grow.

Key Features:

  • Customizable invoices
  • Expense tracking and management
  • Multi-currency support
  • Mileage tracking via the mobile app
  • Integration with PayPal, Shopify, and other e-commerce platforms

Pricing: Plans start at £12 per month, with discounts often available for new users.

Why Choose QuickBooks Online?
QuickBooks Online offers an excellent balance between usability and functionality, making it perfect for growing businesses that need flexibility.

3. Sage Business Cloud Accounting

Sage Business Cloud Accounting (formerly Sage One) is one of the best UK accounting software for small businesses, offering software that is particularly strong in compliance and reporting.

Key Features:

  • Automatic bank feeds and reconciliation
  • Simple VAT returns
  • Cash flow forecasting
  • Invoice and payment tracking
  • Integration with Office 365

Pricing: Plans start at £12 per month, with a free trial available.

Why Choose Sage Business Cloud Accounting?
Sage is ideal for small businesses that need strong compliance features and straightforward accounting processes.

4. FreeAgent

FreeAgent is tailored for freelancers, contractors, and small businesses, offering an intuitive platform designed to simplify everyday financial tasks.

Key Features:

  • Invoicing and expense management
  • Time tracking and project management
  • Tax timeline to avoid missing key dates
  • Integration with UK bank accounts
  • HMRC-approved for Making Tax Digital (MTD)

Pricing: Plans start at £14.50 per month, with discounts for NatWest, Royal Bank of Scotland, and Ulster Bank business customers.

Why Choose FreeAgent?
FreeAgent is perfect for small businesses that prioritize ease of use and want a platform that helps them stay on top of taxes and deadlines.

5. Zoho Books

Zoho Books is part of the Zoho suite of business applications and offers a fully integrated accounting solution that is both affordable and feature-rich.

Key Features:

  • Automated workflows
  • Multi-currency transactions
  • Project management and time tracking
  • Inventory management
  • Detailed financial reports

Pricing: Plans start at £10 per month, making it one of the most affordable options available.

Why Choose Zoho Books?
Zoho Books is ideal for businesses already using Zoho’s other applications or those looking for a cost-effective accounting solution.

6. KashFlow

KashFlow is designed specifically for UK small businesses and sole traders, offering a straightforward platform for managing finances without the complexity of larger systems.

Key Features:

  • Automatic VAT calculations
  • Payroll integration
  • Customizable invoicing
  • Bank feeds for automatic reconciliation
  • HMRC-approved for MTD

Pricing: Plans start at £9 per month, with options for adding payroll.

Why Choose KashFlow?
KashFlow is great for UK-based businesses that need an easy-to-use, compliant solution with strong payroll integration.

7. FreshBooks

FreshBooks is designed with small businesses, freelancers, and self-employed professionals in mind, offering simple yet effective tools for managing invoices, expenses, and projects.

Key Features:

  • Professional invoicing with automated reminders
  • Expense tracking with receipt capture
  • Time tracking and billing
  • Payment processing via credit card and ACH
  • Financial reports and insights

Pricing: Plans start at £13 per month, with a free trial available.

Why Choose FreshBooks?
FreshBooks is perfect for service-based businesses that need strong invoicing features and client management tools.

8. Reckon One

Reckon One is a modular accounting software that lets you pay only for the features you need, making it a highly customizable and budget-friendly option.

Key Features:

  • Pay-as-you-go pricing model
  • Cash flow tracking
  • Budgeting tools
  • Invoicing and payment tracking
  • Payroll add-on available

Pricing: Plans start at £3 per month, with various add-ons available.

Why Choose Reckon One?
Reckon One is ideal for cost-conscious small businesses that want flexibility in choosing the features they need.

Best UK accounting software for small businesses: Comparison

SoftwareStarting PriceFree TrialKey FeaturesBest For
Xero£14/month30 daysReal-time financial reporting, over 800 integrations, payroll management, VAT submission directly to HMRCComprehensive needs, integration with multiple apps
QuickBooks Online£12/month30 daysCustomizable invoices, multi-currency support, mileage tracking, e-commerce integrationGrowing businesses needing scalability and flexibility
Sage Business Cloud Accounting£12/month30 daysAutomatic bank feeds, simple VAT returns, cash flow forecasting, Office 365 integrationBusinesses requiring strong compliance features
FreeAgent£14.50/month30 daysInvoicing, time tracking, tax timeline, bank account integration, HMRC-approved for MTDFreelancers, contractors, and small businesses
Zoho Books£10/month14 daysAutomated workflows, multi-currency transactions, project management, inventory managementCost-conscious businesses already using Zoho products
KashFlow£9/month14 daysAutomatic VAT calculations, payroll integration, customizable invoicing, HMRC-approved for MTDUK-centric businesses needing easy-to-use features
FreshBooks£13/month30 daysProfessional invoicing, expense tracking, time tracking, client management, payment processingService-based businesses focusing on invoicing
Reckon One£3/month30 daysPay-as-you-go pricing model, budgeting tools, customizable features, payroll add-on availableBusinesses seeking a highly customizable, budget-friendly solution

Conclusion

Choosing the best accounting software for your small business in the UK depends on your specific needs, budget, and growth plans. Whether you prioritize ease of use, robust reporting, or integration with other business tools, there’s an option to suit every business. For general use, Xero and QuickBooks Online remain strong contenders due to their comprehensive features and scalability. However, if you’re looking for something more niche, options like FreeAgent for freelancers or KashFlow for UK-centric businesses are excellent choices.

Investing in the right accounting software can streamline your financial management, save time, and help your business stay compliant with UK regulations, setting you up for success in 2024 and beyond.