Top 10 Accounting Software in the UK

Managing business finances can be time-consuming and stressful. Keeping track of invoices, expenses, and tax obligations while ensuring everything is accurate often feels like a full-time job. Relying on spreadsheets or manual bookkeeping increases the risk of errors, which can lead to cash flow problems or compliance issues.

That’s why choosing the right accounting software is important. A good system can help businesses automate financial tasks, stay organised, and get a clear view of their cash flow. With so many options available, it can be difficult to know which one suits your needs best.

This guide explores 10 popular accounting solutions for businesses in the UK. We’ll look at the features they offer, who they’re best suited for, and how they can help you manage your finances more efficiently. Whether you’re self-employed, running a small business, or managing multiple clients, this list will help you find a system that works for you.

We will guide you through:

What to Look for in Accounting Software?

Choosing the right accounting software isn’t just about finding a tool to record income and expenses. The best solution should align with your business needs, simplify financial tasks, and ensure compliance with UK tax regulations. Before deciding on a system, consider the following factors:

1. Compliance with UK Tax Laws

In the UK, businesses must follow Making Tax Digital (MTD) regulations, which require VAT-registered businesses to keep digital records and submit tax returns electronically. A good small business accounting software should be MTD-compliant, making tax filing easier and reducing the risk of errors.

2. Bank Integration & Open Banking

A key feature to look for is whether the software connects directly to your bank account. Open Banking allows accounting software to automatically pull in transactions, eliminating the need for manual data entry. This ensures your records stay up to date and minimises reconciliation errors.

3. Ease of Use & Accessibility

If a system is too complicated, you’ll end up spending more time trying to figure it out than actually managing your finances. The best solutions have:

• A user-friendly dashboard.
• Mobile access for checking financials on the go.
• Customisable reports to track income, expenses, and profit.

4. Features That Match Your Business Needs

Every business has different accounting needs. Some software options offer advanced features that may not be necessary for freelancers or small businesses. Consider:

• Invoicing & Payment Tracking: Does the software allow you to send invoices and accept payments?
• Payroll Management: If you have employees, does it include payroll processing?
• Multi-Currency Support: Important for businesses dealing with international transactions.

5. Scalability & Pricing

Many providers offer different pricing tiers based on the size and complexity of your business. While some tools are ideal for startups and freelancers, others are better suited for growing companies that require advanced reporting and automation.

By keeping these factors in mind, you can choose an accounting software that fits your business without overpaying for features you don’t need.

10 Best Accounting Software Options for Small Businesses in the UK

1. Xero

Xero is one of the most widely used accounting software solutions for small businesses in the UK. It’s designed to help business owners keep their finances organised, automate key tasks, and stay on top of cash flow. With features that cater to freelancers, startups, and growing businesses, Xero is a solid choice for those looking for a small business accounting software that integrates with banking systems and tax authorities.

Key Features:

• Automatic Bank Feeds: Connect your bank account to Xero for real-time transaction imports, reducing manual data entry.
• Customisable Invoicing: Create and send invoices with payment links, track outstanding payments, and set up reminders.
• VAT & MTD Compliance: File VAT returns directly with HMRC and ensure compliance with Making Tax Digital regulations.
• Expense Management: Upload receipts and categorise expenses automatically.
• Multi-Currency Support: Ideal for businesses that deal with international transactions.

Who is Xero Best For?

✅ Freelancers and small business owners who want accounting software UK that automates bookkeeping and tax filings.
✅ Growing businesses that need multi-user access and advanced reporting.
✅ Businesses working with accountants, as Xero allows direct collaboration.

Pricing

Xero offers different pricing plans based on business size and features required. It usually includes a basic plan for sole traders and freelancers, a standard plan for small businesses, and an advanced plan for larger companies needing additional tools like payroll.

Pros & Cons

Pros	Cons
Easy-to-use interface	Learning curve for beginners
Strong integration with UK banks	Can become expensive as business scales
MTD-compliant for VAT returns	No phone support—only chat and email

Xero stands out for its user-friendly design, automation capabilities, and seamless banking connections. For small businesses that want a comprehensive accounting software UK solution without needing an accountant for every task, Xero is a reliable choice.

2. QuickBooks Online

QuickBooks Online is another leading accounting software for UK businesses, offering a wide range of features for financial management, invoicing, and tax preparation. It’s particularly well-known for its integration with payroll services, making it a good choice for businesses with employees.

Key Features:

• Bank Reconciliation: Syncs directly with UK bank accounts for automated transaction tracking.
• Invoice Customisation & Payment Tracking: Create branded invoices and track when customers have viewed or paid them.
• Payroll & VAT Filing: Simplifies payroll management and helps with tax returns, including MTD compliance.
• Expense & Mileage Tracking: Useful for businesses with travel-related expenses.
• Multi-User Access: Allows business owners, accountants, and employees to collaborate securely.

Who is QuickBooks Best For?

✅ Small business owners who need an all-in-one accounting software with payroll management.
✅ Businesses that want detailed financial reporting and forecasting.
✅ Freelancers who need a basic plan for tracking expenses and invoicing clients.

Pricing

QuickBooks offers multiple pricing plans based on the features you need. There are options tailored for freelancers, small businesses, and enterprises.

Pros & Cons

Pros	Cons
Wide range of accounting features	More expensive than some competitors
Payroll and VAT filing included	Some advanced tools require higher-tier plans
Mobile app for managing accounts on the go	Can be overwhelming for beginners

QuickBooks Online is a great option for businesses looking for a full-featured small business accounting software that handles bookkeeping, payroll, and compliance in one place.

3.Sage Accounting

Sage has a long history in the UK business software market. Its Sage Accounting platform is aimed at small and medium-sized businesses that want a flexible system for everyday bookkeeping, VAT management, and optional payroll features. Below are some core elements of Sage Accounting, with details verified for accuracy.

Key Features

• Making Tax Digital (MTD) Compliance:
  Sage Accounting lets you submit VAT returns to HMRC in a digital format, meeting current MTD requirements.
• Bank Integrations:
  Users can connect their business bank accounts for direct transaction imports. This saves time on manual uploads and reduces the chance of errors.
• Invoicing & Quotes:
  The software includes customisable templates for creating invoices and quotes, plus tools to track which ones are paid or outstanding.
• Expense Tracking & Reporting:
  With expense categories and automated summaries, Sage Accounting gives you an overview of where money is coming in and going out.
• Payroll (Optional Add-On):
  Sage offers integrated payroll for businesses with employees. It covers calculating wages, National Insurance, and tax deductions.

Best Suited For

1. Small Business Owners:
   If you need to handle daily bookkeeping and want to stay up-to-date with UK tax regulations, Sage Accounting provides a reliable framework.
2. Medium-Sized Firms:
   Sage has scalable features, which means you can add payroll or other modules as your business requirements grow.
3. Businesses Seeking a Familiar Brand:
   Sage’s long-standing presence in the UK market makes it a common choice among accountants and bookkeepers who prefer established solutions.

Pricing

• Sage typically offers tiered plans, such as Sage Accounting Start, Sage Accounting Standard, and Sage Accounting Plus.
• Prices often begin at around £12 per month for a basic package and can increase to £30+ per month for additional features like multi-currency support or advanced reporting.
• Note: Actual pricing may vary based on promotions, contract length, or bundled offers. Always check Sage’s official site for the latest pricing details.

Pros	Cons
Recognised and widely used in the UK	May feel complex for very small businesses
MTD-compliant for VAT filing	Advanced features usually require higher-tier plans
Optional payroll add-on for growing businesses	Interface can seem less modern compared to newer tools

4.FreeAgent

FreeAgent, which is part of the NatWest Group, caters to freelancers, contractors, and small business owners. It aims to reduce the complexity of day-to-day bookkeeping by offering user-friendly tools for invoicing, expenses, and project-based billing. Here are some verified details about its features and pricing.

Key Features

• Tax Timeline & Deadlines:
  The software provides reminders for important dates, including VAT, Self Assessment, and Corporation Tax submissions.
• Automatic Bank Feeds:
  Connect your UK bank accounts to pull in transactions, cutting down on manual data entry.
• Invoicing & Estimates:
  Create professional invoices, track when they’re viewed, and set up payment reminders for clients.
• Time Tracking & Project Management:
  Useful for freelancers billing by the hour or managing multiple projects with different rates.
• MTD Compliance:
  FreeAgent supports Making Tax Digital requirements, helping with accurate digital record-keeping.

Who It’s Best For

1. Freelancers & Contractors:
   Built to handle project-based billing, time tracking, and individual tax obligations.
2. Micro-Businesses:
   Owners who need core financial management tools without advanced or enterprise-level features.
3. Sole Traders:
   Individuals looking for a simpler approach to bookkeeping, invoicing, and tax deadlines.

Pricing

• Single Plan Approach:
  FreeAgent generally offers one main subscription plan that includes the majority of its features.
• Typical Monthly Cost:
  The monthly fee often starts around £14–£19 (plus VAT), although promotions or bank partnerships can sometimes reduce this cost.
• Free Trial:
  A 30-day free trial is usually available for new users to test the platform before committing.
• Bank Account Offers:
  Some UK banks, especially NatWest, Royal Bank of Scotland (RBS), and Ulster Bank, provide FreeAgent free of charge to qualifying business account holders.

📚 Guide to FreeAgent Pricing for Startups

Pros	Cons
Good for freelancers with project-based billing	Limited advanced features for larger companies
Helps track tax deadlines (VAT, Self Assessment)	Customisation options for reports and invoices are fewer
Bank connections for automatic transaction imports	Single pricing plan may not suit all budgets

5.FreshBooks

FreshBooks is often chosen by freelancers and small businesses that place a strong emphasis on professional invoicing, payment collection, and basic accounting functions. It has gained popularity for its user-friendly design and options for tracking both expenses and billable time.

Key Features

• Invoicing & Payments
  FreshBooks offers customisable invoice templates and integrates with popular payment gateways, making it easier to collect payments from clients.
• Time Tracking
  Users can log the hours spent on each project and generate invoices based on tracked time.
• Expense Management
  Record expenses by category, attach receipts, and review monthly or yearly spending.
• Multi-Currency Billing
  Bill clients in different currencies, which is helpful if you have international customers.
• MTD Compliance
  FreshBooks supports Making Tax Digital for UK users, assisting with VAT submissions when configured properly.

Who It’s Best For

1. Freelancers and Consultants
   If you need to track time and send invoices with minimal hassle, FreshBooks is a straightforward option.
2. Small Teams
   Businesses with a few team members can use collaborative features like project management and expense sharing.
3. Service-Based Businesses
   Ideal for those who bill primarily by the hour or project, rather than tracking large inventories.

Pricing

• Multiple Plans
  FreshBooks generally has tiered packages (Lite, Plus, Premium), starting around £11 per month for a basic subscription and going up as you add more clients or team members.
• Client Limit
  Lower-tier plans have a limit on the number of billable clients; you need to upgrade for higher limits.
• Free Trial
  A 30-day free trial is typically available, allowing users to test core functionalities before paying.

Pros & Cons

Pros	Cons
Simple and clear interface for non-accountants	Client limits on lower-tier plans
Strong invoicing and payment features	Not as many advanced accounting tools as competitors
MTD support for UK VAT compliance	Less suitable for product-based businesses needing inventory management

6.KashFlow

KashFlow is a UK-based accounting platform known for its focus on the needs of small businesses. It’s currently under the IRIS Software Group, which specialises in solutions for payroll, HR, and financial management. KashFlow helps with everyday bookkeeping tasks, VAT returns, and optional payroll features for those with employees. Below are accurate, up-to-date details on its core features and typical pricing.

Key Features

• MTD-Ready VAT Submissions
  KashFlow integrates with HMRC, allowing you to file VAT returns according to Making Tax Digital guidelines.
• Invoicing & Quotes
  Users can create professional invoices and quotes, send them to clients, and set up automatic reminders for overdue payments.
• Bank Feeds & Reconciliation
  Connect KashFlow to your UK bank account to import transactions, then categorise and reconcile them in one place.
• Optional Payroll Add-On
  For businesses with employees, KashFlow Payroll (offered by IRIS) handles wage calculations, pension contributions, and payslips.
• Integration with Payment Services
  Integrates with PayPal, Stripe, and GoCardless to help you get paid faster.

Who It’s Best For

1. Small UK Businesses
   KashFlow was designed with UK tax rules in mind, making it a strong fit for local sole traders and small limited companies.
2. Owners Seeking Basic Accounting & Payroll
   The optional payroll add-on means you can handle wages, taxes, and bookkeeping in one system if needed.
3. Individuals Prefering a UK-Centric Platform
   Since KashFlow focuses on UK requirements, it’s particularly user-friendly for businesses that don’t need advanced international features.

Pricing

• Essential and Business Plans
  KashFlow typically offers two main plans. The Essential plan starts around £8–£10 per month, while the Business plan is usually around £20–£25 per month.
• Payroll Add-On
  Adding payroll functionality can increase the monthly cost. The exact fee varies based on the number of employees.
• Free Trial
  A 14-day free trial is usually available, allowing you to test the platform before committing.

Pros	Cons
Built with UK tax and MTD requirements in mind	Advanced features require higher-tier plans
Optional payroll integration via IRIS	Interface may feel basic compared to some modern competitors
Flexible invoicing and payment integrations	Limited multi-currency support on lower plans

7.Capium

Capium is a cloud-based accounting software designed with accountants and small businesses in mind. It combines bookkeeping, tax filing, and client management features, making it especially appealing for those who manage multiple business accounts under one platform.

Key Features

• Multiple-Client Management
  Accountants can switch between clients in a single dashboard, streamlining processes like VAT returns and year-end accounts.
• Tax Compliance
  Capium covers Corporation Tax, Personal Tax, and VAT submissions in line with HMRC rules, including Making Tax Digital.
• Bank Feeds & Reconciliation
  Supports direct connections to major UK banks, so transactions flow automatically into the software.
• Practice Management Tools
  Time tracking, task assignment, and document sharing features help small accountancy practices or businesses collaborate.
• Payroll Integration
  Offers integrated payroll, simplifying wage calculations, payslips, and real-time information (RTI) submissions.

Who It’s Best For

1. Accountants & Bookkeepers
   The platform is tailored for professionals handling multiple clients, ensuring they can view and manage each account with ease.
2. Small Firms with Growing Needs
   Built-in tools for team collaboration and tax compliance make Capium suitable for businesses that plan to expand.
3. UK-Based Operations
   Since it’s developed with UK tax rules in mind, local businesses can rely on it for up-to-date compliance.

Pricing

• Modular Pricing
  Capium typically offers separate modules (e.g., Accounts Production, Tax, Practice Management), allowing you to pick and pay for what you need.
• Monthly or Annual Plans
  Costs vary based on the number of modules and the scale of your operation.
• Free Trial
  A time-limited trial is generally available for new users who want to test core features before subscribing.

(Check Capium’s official site for the latest details on plans and pricing.)

Pros & Cons

Pros	Cons
Focused on multi-client and practice management	Fewer tutorials and community resources compared to major brands
Built-in modules for tax, accounts, and payroll	Interface may not be as modern as some competitors
Complies with HMRC’s MTD for VAT	Modular pricing can get costly if you need multiple services

8.Clear Books

Clear Books is a UK-based provider of accounting software, designed to help small businesses and accountants handle day-to-day financial tasks with HMRC compliance in mind. Below is an overview of Clear Books’ main capabilities, verified for accuracy.

Key Features

• VAT & Making Tax Digital (MTD)
  Clear Books offers direct submissions for VAT returns, aligning with the UK’s MTD regulations.
• Bank Feeds
  Connect your UK bank account to automate transaction imports, reducing manual data entry.
• Invoicing & Quotes
  Users can create professional invoices and quotes, track payments, and send reminders for overdue amounts.
• Reporting & Analytics
  Generate real-time reports on profit and loss, balance sheets, and cash flow to keep a clear view of your business finances.
• Payroll (Add-On)
  Clear Books Payroll is available if you have employees and need a platform to manage wages, tax deductions, and payslips.

Who It’s Best For

1. Small UK Businesses
   Clear Books is built around UK compliance, making it suitable for limited companies, sole traders, and partnerships.
2. Accountants & Bookkeepers
   The software allows multiple users, letting accounting professionals manage multiple clients under one interface.
3. Budget-Conscious Owners
   Different pricing levels provide options based on whether you need basic bookkeeping or more robust financial tools.

Pricing

• Tiered Plans
  Often split into smaller packages (e.g., Small, Large) with a starting price around £10–£15 per month.
• Payroll Add-On
  Offered at an additional monthly cost, with fees sometimes tied to the number of employees.
• Free Trial
  A 30-day free trial is commonly available, giving you a chance to test the features before subscribing.

Pros & Cons

Pros	Cons
UK-based platform with MTD compliance	May have fewer integrations than larger competitors
User-friendly reporting and dashboard	Advanced features often require higher-tier plans
Optional payroll add-on	Less known outside of the UK, so international support is limited

9.Wave

Wave offers core bookkeeping and invoicing features suitable for small businesses and accounting professionals who manage clients with simpler requirements. It provides a free plan that includes expense tracking, basic reporting, and invoice creation, making it appealing for situations where you want to keep costs low.

Key Features

• Accounting & Invoicing at No Cost
  Users can record transactions, send invoices, and accept online payments.
• Bank Integration
  Connect UK bank accounts to import transactions, which helps reduce manual data entry.
• Receipt Management
  Upload pictures of receipts to organise and store them digitally.
• Basic Reporting
  Generate profit and loss statements and balance sheets to help monitor financial health.

Who It’s Best For

1. Accountants Serving Small, Cost-Sensitive Businesses
   If your clients have minimal accounting needs and don’t require advanced tax support, Wave can fit well.
2. Freelancers and Sole Traders
   Individuals who only need simple invoicing and bookkeeping tools may appreciate the cost savings.
3. Basic Cash-Based Operations
   For companies without complex VAT obligations or multi-currency transactions, Wave’s features can cover essential tasks.

Points to Note

• No Direct MTD Support
  Wave doesn’t currently offer built-in tools for Making Tax Digital. Accountants may need an external bridging solution for VAT submissions.
• Optional Payment Processing
  Online payment features carry transaction fees; this is separate from the free accounting elements.

Pros	Cons
Free core bookkeeping and invoicing	Lacks built-in VAT and MTD capabilities
Easy to set up for clients with simple needs	Limited support for complex or growing businesses
Allows receipt scanning and basic reporting	Transaction fees apply for online payments

10.ZipBooks

ZipBooks is another online accounting software solution that can serve UK-based clients. It offers invoicing, financial reporting, and time-tracking features in a straightforward interface. While it doesn’t provide direct MTD filing, it includes enough functionality for accountants overseeing smaller clients who don’t need advanced tax integrations.

Key Features

• Invoicing & Payment Tracking
  Send customised invoices, see if clients have viewed them, and track payment status.
• Bank Feeds
  Connect UK bank accounts to import transactions for reconciliation.
• Time Tracking
  Log hours for billable services, which is especially helpful for freelancers or service-oriented businesses.
• Reporting Dashboard
  Keep an eye on profit and loss, cash flow, and balance sheets to guide financial decisions.
• Multi-Currency
  Bill clients in various currencies, useful if your clients have international customers.

Who It’s Best For

1. Accounting Professionals Serving Service-Based Firms
   Time tracking and simple project billing make ZipBooks appealing for businesses that primarily charge by the hour or project.
2. Clients Needing Basic Features
   If advanced VAT handling isn’t a top priority, ZipBooks can manage general invoicing and bookkeeping.
3. Users Seeking a Lower Price Point
   ZipBooks offers a free starter plan and paid options that expand capabilities as needed.

Points to Note

• No Direct MTD
  Like Wave, ZipBooks doesn’t offer a built-in solution for MTD. An external bridging tool would be necessary for digital VAT filing.
• Paid Plans in USD
  Subscription fees are listed in USD, so currency conversion may apply for UK-based clients.

Pros & Cons

Pros	Cons
Free starter plan offers essential tools	Doesn’t include native VAT or MTD filing
Time tracking built into the platform	Plans priced in USD, requiring currency conversion
Works well for service-oriented businesses	Might be limited for complex accounting needs

How to Choose the Right Accounting Software?

Selecting a suitable accounting software is crucial for accountants and businesses in the UK. Whether your focus is on VAT compliance, payroll, or multi-user access, matching the right tool to your specific requirements can streamline day-to-day financial management.

1. Scope of Services
   Determine whether your top priority is automated invoicing, payroll, multiple-client management, or advanced reporting. Different platforms excel in each area.
2. Scalability & Add-Ons
   If you expect your client base or operation to grow, look for software that can expand alongside you—offering additional modules or upgrading capacity without excessive fees.
3. Compliance & Reliability
   Confirm the software supports Making Tax Digital (MTD) or easily integrates with bridging solutions. Staying on the right side of UK regulations reduces stress and avoids penalties.
4. User Experience & Support
   Platforms with a clear interface, detailed guides, and responsive customer support can simplify the learning curve—especially if you’re juggling multiple clients or complex bookkeeping needs.

Why Integrate Finexer into your Accounting Software

For accounting professionals seeking to integrate banking data, accept payments, and onboard clients, The Finexer can offer valuable add-on services that align with many of the UK-friendly accounting solutions discussed here:

• Real-Time Transaction Sync:
  Automatically update your chosen accounting software with new transactions, reducing manual data entry.

• Seamless Payment Handling:
  Process client payments through The Finexer, allowing you to track incoming funds in tandem with invoices raised in your accounting platform.

• Efficient Onboarding:
  The Finexer supports streamlined account creation for new clients, making it easier to handle KYC (Know Your Customer) checks or compliance steps, and integrate client data into your financial workflows.

By pairing your accounting software with The Finexer’s services, you create a more robust financial ecosystem—combining automated data capture, straightforward payment workflows, and smooth client onboarding in one place.

Final Thoughts

Finding the right accounting software doesn’t have to be overwhelming. Whether you choose a well-known platform like Xero or QuickBooks, or opt for a more budget-friendly tool like Pandle or Wave, the best choice is the one that fits your budget, meets your main financial needs, and follows UK rules like Making Tax Digital (MTD).

By adding Finexer into the mix, you can connect real-time bank data, accept payments, and onboard clients with less hassle. This makes your accounting workflows smoother and keeps everything in one place.