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The Best Accounting Software for a Small Business

By Dean Laming on June 9th, 2022

Accounting software aims to help the business owner handle their accounting and is advertised as an easy and fool proof way to keep on top of finances.  However it is important to remember that accounting is complex and that even qualified accountants can sometimes make mistakes.

In this guide, we check out the best accounting software for small businesses that want to take care of their books.

What is accounting software?

Accounting software is computer software that enables accountants or business owners to manage accounts and book keeping digitally. It can be used for all aspects of accounting including recording daily transactions, balances, debits, submitting to HMRC, expenses, the payroll and everything else that any business needs to consider throughout its life span.

So whether you are maintaining all your accounts and bookkeeping yourself as a sole trader or you are a small business accountant you need to know that the program you use is the best choice for your business.

These days all professional business accountants use accounting software. Small business owners use accounting software too so whatever your case, you cannot escape using this necessary business function.

Why does a small business need accounting software?

Every small business needs accounting software in order to stay organised and on top of finances. It helps you with issues such as book keeping, managing the payroll, invoicing customers and suppliers, VAT, tax, inventory and purchase orders. Most programs enable you to track cash flow and to monitor profit and loss. These tools will help you monitor the up to the minute financial health of your business.

Accounting software is now indispensable for submitting your tax returns. The Making Tax Digital program launched by HMRC became mandatory for VAT registered businesses in April 2022. This means that choosing HMCR compatible accounting software is important for businesses that pay VAT.

The system has been designed to make tax collection more efficient and according to the tax administration, this initiative will make it easier for tax payers to get it right.

The good news is that many software programs are easy to use and will simplify the process. There are free software options on the market as well as many low cost alternatives. However, a professional accountancy firm should choose the software package that best reflects their needs.

The Best Small Business Accounting Software

The best small business accounting software will depend upon your own requirements and personal preferences. It will also depend upon the type of business you operate.

Let’s take a look at some of the major brands on the market.

Intuit Quick Books Online

Intuit Quick Books Online is the number one choice for most accounting professionals as it is easy to use. It also provides online training resources and support. It integrates with Quick Books Payroll so can be used for managing the payroll and because it is fully scalable, additional functions can be expanded as you need them.

Quick Books online is cloud based so can be accessed via mobile devices and it can be fully integrated with other platforms such as PayPal. It’s also compatible with HMRC’s Making Tax Digital system.

Intuit Quick Books Self Employed

This program is designed for self-employed freelancers and independent contractors who need to track their income and outgoings for their tax return. It can be used to track mileage and to keep track of ongoing expenditure and profits and is an easier alternative than wading through bank statements and receipts at the end of the year in order to submit the tax return. Intuit Quick Books is fairly limited but does provide a great service to people handling their own accounting needs.

Sage Accounting

Sage Accounting is the original accountancy software program and since its inception in 1981 has grown to become the industry leader worldwide. Sage provides a range of functions, can be scaled to size and is fully onboard with Make Tax Digital.

Prices start at £12 per month for single use operation so is good for sole traders and smaller companies. The Accounting Plus contract offers a wide range of functions and is suitable for small businesses. There are some great features including inventory management and multiple currency transactions. You can add Payroll to any sized plan for just £7.00 per month.

Many professional accountancy firms use Sage as standard because it offers such fantastic functionality and is scalable to all sizes of business. However for the individual user managing his or her own accounting, Inuit Quick Books is generally easier to use.


Wave may be a good option for a small service based business. It is free to use for small businesses and can be used to send invoices, carry out bookkeeping, track expenses and receipts and be used by accountants to produce a tax return. Wave is fully compatible with HMRC.

The free version of the software does not include Payroll or customer payment processing but you get all of these if you sign up for a premium contract.

Wave could be a good choice if you are looking for a free program but it is important to remember that Wave makes it money via its payment gateway so credit card transactions and bank to bank transactions all come with a higher charge than other providers.

Fresh books

FreshBooks is popular with small business users and is easy to use. The interface is user friendly and the software offers numerous functions including credit card payments , invoicing , expense tracking , time tracking , taking multiple currencies and more.

FreshBooks integrates with other services including PayPal, Gusto and Zen Desk and because it is cloud based it can function on multiple devices via the app as well as the desktop.

FreshBooks offers plenty of services for very little outlay but some customers have complained that too many functions can make it confusing.


Xero is a good all round accounting software system that is suits the needs of business owners and professional accountants alike. It offers some extras on top of the usual functions, such as expense planning and project tracking. It is HMRC compatible and it remains the first choice of professional accountants because it offers wide capabilities and is easy to use.

Key to the Xero experience is that the dashboard is clear and it is easy to access the multiple functions. In addition Xero can be used by multiple users.

Protecting Yourself with Professional Indemnity Insurance

Although accounting software has made accounting easier for clients, the same is not necessarily true for professional accountancy firms. If you are a professional accountant you already know that your clients are likely to be using a wide range of accounting software adding even more complexity to an already complex profession.

Mistakes can happen and sometimes do, yet when an accountant makes a mistake the effects can be catastrophic on the financial health of your client and yours too, if they decide to sue you for damages.

To protect yourself, taking out professional indemnity insurance for accountants will help minimise the risk of any mistakes made by you or your team. After all, accountants are human so adding the protection of professional indemnity insurance for accountants will help your business stay financially healthy.
Our team of experienced underwriters at Brisco Business ensures that your business insurance policy provides adequate coverage for your specific needs.

Dean Laming

Dean is a Chartered Insurance Broker with more than 25 years insurance experience. Through various underwriting, operational and management roles, Dean has built up extensive knowledge of how to run a business and is now Managing Director of Brisco Business, part of the wider Henry Seymour Group.

All articles by Dean Laming

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