Best UK small business accounting software

By Tim Adler on Small Business UK – Advice and Ideas for UK Small Businesses and SMEs

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.

With the extension of Making Tax Digital for VAT, all VAT-registered businesses now have to maintain digital records and file VAT returns to HMRC through approved software. MTD for Income Tax will apply from as soon as April 2026 if your qualifying income is over £50,000 in the‌‌‌ 2024‌‌‌ to‌‌‌ 2025‌‌‌ tax year. And corporation tax will soon follow.

Even if your income doesn’t yet qualify, or April ’26 seems a long way off, everyone will be swept up by MTD eventually, so the sooner you start using compliant software the better. Here we’ve compared and contrasted the best small business accounting software on the market so you don’t have to – all of which is MTD-compliant. Discover their pricing, pros, cons, and top features, and decide which is right for your business. 

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 invoice payment deadlines?
• 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?

Although there are free options available, when it comes to UK small business accounting software – and especially something as sensitive as financial information – it’s probably wise to pay for a package. Back in the 1970s, the US television industry coined the phrase, “If you’re not paying for the product, you are the product.” These days that means that the software provider sells on your data.

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 – Get 50% off for 3 months, then £18 per month
• Xero – 50% off for 3 months
• FreshBooks – 50% off for first three months
• Crunch – free 14-day trial on any package
• QuickBooks – 90% off for 6 months or a year

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?

Best UK small business accounting software: In-depth reviews

Here’s a detailed rundown of each accounting software for small businesses provider, with information on pricing, features and pros and cons.

Sage Accounting – best for micro businesses with limited stock

Like all the other small business accounting software packages listed here, Sage is cloud based and links seamlessly to your bank account for real-time reporting. All Sage plans now include AI copilot, a ‘productivity assistant’ that can automate payment reminders, VAT returns, email creation, and more.

Features it offers include:

• Create, send, and track invoices
• Submit VAT returns directly yo HMRC
• Multi-currency support
• Connect your bank account for automated reconcilliaiton
• Forecast cashflow with visual representations using your dashboard
• Linked to Stripe payments processing system
• Sage Copilot’s AI-powered receipt and invoice capture automatically extracts data for your records

Pros:

• Sage Business Cloud Accounting’s bottom Accounting Start tier is affordable, simple and easy to navigate
• All Sage’s plans are feature-rich
• Sage is HMRC-recognised and MTD-compatible

Cons:

• Payroll is not included as standard. You can add it on to your accounting plan from £10 per month

Price (excluding VAT):

Start for sole traders and microbusinesses: Free for three months then £18 per month. One Copilot user included

Standard (adds advanced reporting, cash flow management, and more): Free for three months then £39 per month. One Copilot user plus 30 AI-captured receipts and invoices included (20p per additional capture).

Plus (adds multicurrency invoicing, inventory management, and more): Free for three months then £59 per month. One Copilot user plus 100 AI-captured receipts and invoices included (20p per additional capture).

Mobile: iOS, Android Check out Sage

Xero – best for larger SMEs with multiple users

Xero’s accounting software is MTD ready and allows you to send quotes and invoices, reconcile bank transactions and forecast your cashflow. It has an ecosystem of over 1,000 third-party apps and 300 plus connections to banks and other financial partners.

It includes payroll from one to 10 people on the highest three tiers, as well as expenses and mileage claims. The highest tiers feature multiple currencies and advanced analytics.

Xero offers the following as standard:

• Connects straight to your bank account enabling automatic reconciliation
• Generates quotes and invoices that customers can pay online
• Manages purchase orders, bills and supplier payments digitally
• Helps track stock
• Keeps your account up to date as you buy and sell
• Customisable reports
• Range of apps in marketplace including Shopify, Stripe, PayPal and Square

However, you have to pay extra as bolt-ons if you want to do your payroll on Xero or enable staff to submit expenses, track expense claims.

Pros:

• Xero is popular with small businesses and especially sales-oriented businesses that need basic stock management built in
• Its usability, features, extendibility, and network of “Xero certified” accountants make it one of the best small business accounting websites available
• Payroll for a limited number of users is included with the top three tiers, whereas for many rivals, it is a paid add-on.

Cons:

• The Starter plan is limited, with restrictions on invoices and quotes and no access to expenses, multiple currencies and payroll
• There is no telephone customer support

Price (excluding VAT):

Ignite: £8 for 3 months (then £16 per month)  

Grow: £18.50 for 3 months (then £37 per month)

Comprehensive: £25 for 3 months (then £50 per month)

Ultimate: £32.50 for 3 months (then £65 per month)

Mobile: iOS, Android Check out Xero

Tide offers an integrated banking and accounting solution designed to simplify financial management for small businesses. With seamless connectivity between banking and bookkeeping, users can automate tasks, track business performance, and file tax returns with ease. Tide provides automated profitability insights, tax bill estimates, and HMRC-compatible VAT filing.

The app streamlines daily admin with features like bulk transaction categorisation and real-time reconciliation. Users can send invoices, track payments, and manage cash flow effortlessly. Additionally, a three-month free trial of Admin Extra allows businesses to explore premium features. Tide supports business growth with accurate financial reports, funding applications, and tax preparation, making it a comprehensive financial tool for entrepreneurs and small business owners.

Features include:

• Manage banking and accounting within the Tide app
• Auto-categorise transactions and bulk-categorise for efficiency
• Prepare Self Assessment (for sole traders) and submit VAT returns to HMRC
• Generate financial statements and track profitability
• Create and send invoices, match payments, and automate reminders

Pros:

• Combines banking and accounting for a streamlined experience
• Reduces manual effort with smart bookkeeping tools and automated admin
• Offers unlimited invoicing on select plans with auto-matching and premium templates

Cons:

• Some bookkeeping and tax tools are only available on higher-tier plans
• Only available on higher-tier plans, limiting collaboration for some users

Pricing Plans (excluding VAT)

Invoice assistant: £5.99 per month

Accounting: £19.99 per month for limited companies, £13.99 per month for sole traders

Admin Extra: £24.99 per month for limited companies, £17.99 per month for sole traders Check out Tide

Moss – best for flexible pricing

Moss is a comprehensive spend management platform designed to streamline financial processes for businesses. It automates expense tracking, invoice processing, and reimbursements while integrating seamlessly with accounting software. With AI-powered pre-accounting, Moss captures and categorises expenses, reducing manual work. Finance teams benefit from real-time visibility, custom approval workflows, and spend controls, ensuring accuracy and efficiency.

Moss offers flexible pricing with modular plans, allowing businesses to tailor their packages based on needs. Corporate cards, accounts payable, and employee reimbursements can all be included in the standard package (though all are optional), while advanced accounting (which includes AI automation), advanced control features, procurement, and enterprise resource planning are available as paid add-ons.

Features include:

• Automates transaction coding and data extraction from receipts and invoices
• Two-way API integration with accounting software for seamless reconciliation
• Issue unlimited virtual and physical cards with customisable limits
• Streamlines invoice processing with OCR-based automation and one-click payments
• Provides full visibility, spend tracking, and budget oversight for finance teams

Pros:

• Automates manual finance tasks, cutting month-end reconciliation time
• Modular pricing lets businesses tailor their spend management solution
• Centralised platform for expenses, invoices, reimbursements, and corporate cards

Cons:

• Pricing information is not available unless you make an enquiry
• Not available for businesses with fewer than 10 employees and less than £2m turnover

Pricing:

Moss Starter (Free) – For up to 3 users. Allows you to choose either corporate cards or accounts payable as your standard product. Includes standard features with limitations.

Custom Pricing – Businesses select modules (Corporate Cards, Employee Reimbursements, Accounts Payable) and add-ons (Advanced Accounting, Procurement, ERP integration) based on needs, with pricing based on features and transaction volume. Check out Moss

Zoho Books – best for international businesses

Zoho Books is an HMRC-recognised, MTD-ready accounting software designed for small and growing businesses. It streamlines financial processes by offering automated invoicing, expense tracking, VAT filing, bank reconciliation, and inventory management. On the more premium tiers, the platform supports multi-currency transactions and invoicing, making it ideal for global operations.

Zoho Books integrates seamlessly with other Zoho apps and third-party tools, ensuring smooth business operations. Its affordability, CIS filing readiness, and user-friendly interface make it a popular choice for businesses transitioning from competitors like Xero and FreshBooks.

Features include:

• Directly submit VAT returns to HMRC
• Automate workflows, reminders, and reports
• Manage global transactions with automatic exchange rate updates
• Track stock levels, set reorder points, and update purchases/sales
• Access financial data, send invoices, and track expenses on the go
• Multilingual invoicing on all plans. Multi-currency transactions and invoicing on premium tiers

Pros

• Competitive plans with comprehensive features
• Tailor invoices and automate recurring transactions
• Works with Zoho ecosystem and third-party apps

Cons

• Limitations of lower tier plans can be restrictive for smaller businesses

Pricing (paid annually and excluding VAT):

Free Plan: Basic features for micro-businesses.

Standard: £10 per month

Professional: £20 per month

Premium: £25 per month

Elite: £85/month

Ultimate: £165 per month Check out Zoho Books

FreshBooks – best for sole traders

FreshBooks is a Toronto-based small business software company that offers invoicing, bills and payments, expense tracking, quotes and financial reporting features. You can use it to submit VAT returns to HMRC and all plans feature a client self-service portal, though you are limited to five clients on the basic plan and 50 on the next tier up. The top tiers have unlimited clients.

On the top tiers you can access advanced accounting features, accounts payable, and customised email templates. The highest tier unlocks subscription payments, dedicated support, customised onboarding and more.

Pros:

• Specifically designed for small businesses
• Colourful and intuitive UX

Cons:

• Lower-level plans have client limits
• Charge for additional users
• Lacks functionality larger businesses need

FreshBooks offers the below when it comes to pricing:

Lite: £7.50 per month for first three months then £15 a month

Plus: £12.50 per month for first three months then £25 a month

Premium: £17.50 per month for first three months then £35 a month

Select: Customised pricing

Mobile: iOS, Android and Windows Check out FreshBooks

Crunch – best for ease of use

Crunch is the easy-to-use tax and accounting software that has Chartered Certified Accountants on hand to ensure you can meet your tax obligations.

Whether you opt for the sole trader plan or limited company package, Crunch’s software is MTD-ready and HMRC recognised. There’s a 14-day free trial for all plans, and each one allows you to create and send invoices, manage expenses, and connect your bank account.

On premium plans, you also get access to HMRC registration, VAT and Self-Assessment returns, and a dedicated accountant. What’s more, Crunch offers a variety of other essential small business services, including bookkeeping, payroll, insurance, and self-employed mortgages

Features include:

• Easily create and send invoices
• Record and track expenses
• Connect your bank account
• HMRC registration
• VAT filing

Pros:

• Access to advice from certified chartered accountants
• Easy to switch from another accounting software
• No minimum term for Pro and Premium plans

Cons:

• Quite expensive compared to some other providers
• Payroll costs extra

Price:

Crunch Sole Trader Pro: £21.60 (+VAT) per month

Crunch Pro for Limited Companies: £72 (+VAT) per month

Crunch Premium for Limited Companies: £109.60 (+VAT) per month

Premium Plus: £140 (+VAT) per month

Mobile: iOS, Android and Windows Check out Crunch

Ember – best for an all-in-one solution

Built for sole traders and limited companies, Ember is an MTD-ready accounting software that automates all the most mundane tax and accounting tasks to help you save you time and money.

All plans include automated expenses, the ability to create and send invoices, real time financial reporting, integrations with plenty of apps, and open banking.

On premium plans, it also offers support for more complex queries from its in-house accountants, as well as VAT returns, tax insights and multi-currency support. Ember has paid plans for both sole traders and limited companies but no longer publishes its prices.

Features include:

• Automated expense management categorises your expenses for you
• Create and send invoices at any time
• Support from Ember’s qualified in-house accountants
• Review and submit VAT returns directly to HMRC
• Automated payroll saves you time
• Tax insights and optimisations help you the most of the deductions available to your business

Pros:

• You’re not forced into a long-term contract and can cancel any time
• Supports multi-currency accounting, including live foreign exchange in USD and Euros
• Suitable for everyone from sole traders to businesses
• Has in-house accountants to advise you and file your returns

Cons:

• Multi-user access isn’t yet supported

Price

Sole trader

Contact for prices.

Limited company

Contact for prices. Check out Ember

QuickBooks – best for fast-growing businesses

As well as standard accounting features like self-assessment support, invoicing and cash flow, nifty features include a client portal, where customers can view, print and pay invoices; a customer relationship management (CRM) system, which helps you keep on top of your customer database; and AI-powered income and expenses management.

Where QuickBooks stands out is the quality of its reporting, with punchy snapshots of how your business is performing financially. Its reporting facility is ahead of rivals such as Xero when it comes to customisation.

Features:

• Ready for the introduction of MTD for income tax
• Send invoices and estimates
• Cash flow insight based on your recurring expenses an transactions
• AI-powered support for managing income and expenses (Quickbooks Sole Trader uses AI to determine which are business and personal expenses)
• Generate customised reports on everything from profit and loss to expenses

Pros:

• QuickBooks’s user experience (UX) is easy to understand and pleasing to the eye
• QuickBooks is mindful of scaling businesses and its software can have anything up to 25 users
• Professional accountants rate the professionalism of QuickBook’s reports and its bank reconciliation features

Cons:

• QuickBooks can be difficult to navigate with some features hidden in settings
• There have been complaints that QuickBooks online is still buggy with long waiting times for telephone customer support

Price (excluding VAT):

QuickBooks is offering a 90 per cent discount for the first seven months or year, depending on the plan.

Sole Trader £1 per month rising to £10 after six months

Simple Start £1.60 per month, rising to £16 after six months

Essentials £3.30 per month, rising to £33 after six months

Plus £4.70 per month, rising to £47 after seven months

Advanced: £11.50 per month, rising to £115 after six months Check out Quickbooks

ClearBooks – best for wholly UK small businesses

Clear Books provides clear and simple cloud accounting and payroll software to thousands of small businesses in the UK.

Invoices, bill and receipt tracking, reporting and MTD for income tax are all included as standard. The next tier add MTD for VAT reporting, budget tools, and purchase orders, while the most premium tier includes mutl-currency support, employee expenses and project accounting.

Features:

• Support for MTD for income tax
• Track income and expenses
• Generate and send customised invoices
• Send quotes and estimates
• Optional extras like payroll, instant bank payments, and auto bills available

Pros:

• Simple to use
• Designed for British businesses
• UK-based
• Support team sits alongside developers
• Value for money
• 30-day free trial

Cons:

• Some functions can be overly complicated
• Not suitable for enterprise level businesses
• Continual UI updates do frustrate some customers

Pricing:

Small business: £7.50 per month for first three months then £15 a month

Medium business: £15.50 per month for first three months then £31 a month

Large businesses: £20.50 per month for first three months then £41 a month

Mobile: iOS, Android and Windows Check out ClearBooks

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