Choose software that links to your business bank account and automatically imports transactions. It simplifies bank reconciliation by comparing your records with your bank statements, helping you spot errors and keep accounts accurate.
Our best small business accounting software in the UK 2026
Accounting software for UK small businesses
Choosing the right accounting software can save time, reduce costly mistakes and give you a clearer view of your finances, helping your business stay on track.
4 results found, sorted by affiliated products first. We always order products with our partners first and we may receive a small commission if you click on the deal and then purchase it. Find out how we order our comparisons.
Moss
Price
From free
Free trial
Not available
Integrations
Yes
Customer support
Phone and email
Trustpilot score
3.6/5
*T&C's apply
More Information
Key features
- The spend management platform that speeds up finance workflows and sits on top of your accounting software
- Bring corporate cards, employee expenses, accounts payable and payments into one controlled workflow
- Sync fully coded transactions directly to tools like Xero, Sage and NetSuite
- Let AI take care of receipt collection and transaction coding, reducing manual work at month-end
Eligibility
| Recommended for | Finance teams and accountants using Xero, Sage, DATEV, or Exact who need to manage accounting preparation efficiently at scale. |
| Not recommended for | Businesses looking for basic accounting or bookkeeping software or those wanting to replace their existing ledger. |
| Integrations offered | Integrates with Sage, QuickBooks, Xero, DATEV, and more via direct connections. |
2 months free of Admin Extra
Tide
Price
From £13.99 per month
Free trial
Not available
Integrations
Yes
Customer support
In-app chat support. Phone support is available for some plans/issues.
Trustpilot score
4.2/5
*T&C's apply
More Information
Key features
- integrated invoicing
- Expense management
- Auto-categorisation
- VAT filing tools
- Real-time tax estimates
Eligibility
| Recommended for | Freelancers, contractors, and small businesses who want banking and simple accounting in a single platform. |
| Not recommended for | Businesses that require advanced inventory management or multi-currency accounting without using a third-party integration. |
| Integrations offered | Connects to Tide bank accounts |
| AI tools | AI features include transaction auto-categorisation and business insights |
Xero
Price
From £7.00 per month
Free trial
30 days free*
Integrations
Yes
Customer support
24/7 online support
Trustpilot score
4.1/5
*T&C's apply
More Information
Key features
- Invoicing
- Bill payments
- VAT returns (MTD)
- Bank reconciliation
- Project tracking
- Multi-currency support
- Purchase orders
- Expense claims
Eligibility
| Recommended for | Small to medium-sized businesses, accountants, and bookkeepers, particularly those who value a large ecosystem of third-party app integrations. |
| Not recommended for | Businesses looking for a free plan, as you'll need to pay a minimum of £7 a month. |
| Integrations offered | Connects to a wide range of UK and international banks via open banking feeds. |
| AI tools | AI used for bank reconciliation suggestions, invoice data capture, and anomaly detection. |
With free Making Tax Digital tool
Zempler Bank – A Bank Account with accounting features
Price
From free
Free trial
Not available
Integrations
Yes
Customer support
In-app chat (Paid plans) & UK-based phone support
Trustpilot score
4.4/5
More Information
Key features
- From £0 Monthly
- Includes free ‘Making Tax Digital’ VAT submission tool
- With 1 year free of ‘Making Tax Digital’ Income Tax Self Assessment Software (via Coconut)
- Categorise spend as you go
- Comes with digital receipt capture
- Generate Invoices
- Integrates with leading accountancy packages (Sage, Xero, Quickbooks etc.)
Eligibility
| Recommended for | Sole traders and SMEs who want banking and bookkeeping tightly coupled or have a poor credit history |
| Not recommended for | Businesses that rely heavily on cheque deposits or physical branch access |
| Integrations offered | Xero, Quickbooks, Sage, FreeAgent, Coconut & more |
| AI tools | Automatic transaction categorisation and spending insights |
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What is accounting software and how does it work?
Accounting software is a digital tool that helps a small business record, organise and track its finances in one place.
In its simplest form, accounting software replaces manual bookkeeping and spreadsheets. Used properly, it shows you how much money is coming in and going out, what tax you owe and whether your business can afford its next move.
You can use accounting software whether you’re a sole trader, landlord, in a partnership or running a limited company, with tools designed for each type of business.
Number of small business owners that say accounting software is an essential component of their operation[1]
89%
Making Tax Digital (MTD) and accounting software
Making Tax Digital (MTD) for income tax comes into force in April 2026, initially affecting sole traders and landlords with a qualifying income of more than £50,000.
From April 2027, MTD will affect sole traders and landlords with a qualifying income of more than £30,000
From April 2028, MTD will affect those with a qualifying income of more than £20,000
Under the new rules, small businesses must maintain digital records and submit tax returns via MTD-compatible software. This means that if you don’t already, you will need to start using the correct accounting software to ensure you are MTD-compliant.
If you don’t want to invest in full accounting software, you could connect existing spreadsheets to bridging software. But because this is more lightweight, it’s better suited to businesses with simple financial records.
Note: VAT-registered businesses (those with an annual turnover of more than £90,000) should already be using MTD-compatible software, because MTD for VAT has been in place since 2019.
Why use accounting software as a small business
There’s a host of reasons why using accounting software can be beneficial for a small business:
Saves time
Automating tasks such as invoicing and expense management cuts down on manual admin, freeing you to focus on running the business
Reduces mistakes
Manual bookkeeping can often result in mistakes. Using accounting software reduces human error and keeps your records consistent
Ensures compliance
With MTD affecting many businesses from April 2026 onwards, using the correct accounting software ensures you stay complaint with HMRC rules
Clearer visibility
Accounting software makes it easier to see what’s been paid, what’s overdue and what’s coming up, so you can better manage cash flow
Tax calculations
Many platforms calculate VAT, track deadlines and prepare figures for tax returns, ensuring they are accurate and filed on time
Business bank accounts with accounting tools
You don’t always need to sign up for separate accounting software. Some business bank accounts come with free basic accounting software or tools, while others enable you to connect directly to full accounting software as part of a bundled plan.
Some of these providers include:
Barclays – Offers access to software such as FreshBooks for business customers
Mettle – Offers integration with FreeAgent if you make at least one transaction a month
Monzo – Offers integration with platforms such as Xero, Sage and QuickBooks
NatWest – Comes with FreeAgent for free
Tide – Provides its own integrated Tide Accounting service
If you already have a business bank account, check what it includes in terms of accounting tools, or whether upgrading your plan would unlock additional features. If you’re opening a new account, look closely at what’s provided, how much it costs each month and whether the tools available meet your needs.
Built-in accounting tools can work well for straightforward finances, but businesses with VAT, payroll or more complex reporting needs may find they need full standalone accounting software instead.
Key features to look for when comparing accounting software
Bookkeeping and bank reconciliation
Choose software that links to your business bank account and automatically imports transactions. It simplifies bank reconciliation by comparing your records with your bank statements, helping you spot errors and keep accounts accurate.
Invoicing
Good software enables you to create and send professional invoices, track who has paid and automatically chase late payments, so you don’t have to. Features such as automatic reminders and online payment links can improve business cash flow.
Payroll
If your business hires staff, look for packages that can help you manage employees efficiently, whether by including payroll or integrating with a payroll service. This can help you pay wages correctly as well as calculate benefits and generate payslips.
Expense management and receipt capture
Good accounting software enables you to capture receipts instantly, track and categorise expenses, and automatically match receipts to banking transactions. You can easily record employee expenses and manage payments, without staff claims getting lost.
VAT calculations and tax returns
For many small businesses, built-in support for MTD and automated VAT return preparation is essential. The right accounting software helps you prepare for tax returns in advance, calculate how much you owe and file returns on time.
Stock management
If your business handles goods, look for software that can help you track your inventory levels. Some platforms monitor stock levels and provide alerts when stock runs low in real time, as well as manage products more efficiently and track their movements.
Reporting
Some platforms provide a range of financial reports, from simple statements and key reports, such as cash flow and balance sheets, to more complex tools that handle budgeting and forecasting. In some cases, you may have to pay extra for these benefits.
Key features to look for when comparing accounting software
Bookkeeping and bank reconciliation
Invoicing
Good software enables you to create and send professional invoices, track who has paid and automatically chase late payments, so you don’t have to. Features such as automatic reminders and online payment links can improve business cash flow.
Payroll
If your business hires staff, look for packages that can help you manage employees efficiently, whether by including payroll or integrating with a payroll service. This can help you pay wages correctly as well as calculate benefits and generate payslips.
Expense management and receipt capture
Good accounting software enables you to capture receipts instantly, track and categorise expenses, and automatically match receipts to banking transactions. You can easily record employee expenses and manage payments, without staff claims getting lost.
VAT calculations and tax returns
For many small businesses, built-in support for MTD and automated VAT return preparation is essential. The right accounting software helps you prepare for tax returns in advance, calculate how much you owe and file returns on time.
Stock management
If your business handles goods, look for software that can help you track your inventory levels. Some platforms monitor stock levels and provide alerts when stock runs low in real time, as well as manage products more efficiently and track their movements.
Reporting
Some platforms provide a range of financial reports, from simple statements and key reports, such as cash flow and balance sheets, to more complex tools that handle budgeting and forecasting. In some cases, you may have to pay extra for these benefits.
How to choose the best accounting solution for your small business
Choosing the right accounting software isn’t about picking the most popular name. It’s about matching the tool to your needs, budget and processes. Here’s how to choose the best solution for your business:
Assess your business needs
Think carefully about what you want your accounting software to help you achieve. Different tools focus on different things, so it pays to understand your priorities so you can establish a shortlist. Are you trying to save time on admin, stay compliant with MTD and tax filings, manage payroll or get clearer cash flow visibility, for instance?
Decide which features matter most
When comparing software, look only at the features that matter most to your business. Automatic bank feeds are essential for most companies, while payroll is only necessary if you employ staff. Invoicing and payment tracking is important if you raise a lot of invoices, while VAT and tax support is required if you’re VAT-registered.
Consider ease of use and support
There’s no point paying for software that’s too complicated to navigate. Look for platforms with a straightforward setup and clear guidance on tasks such as invoicing and tax reporting. Check what help is available, whether that’s live chat, phone support or tutorials, and whether support is responsive when you need it.
Check compatibility and integrations
You want your accounting software to work with the tools you already rely on. This includes your business bank account, payroll system, payment platforms or CRM software. If it integrates well, transactions flow automatically, reducing extra work and human error. Before committing, check the software supports the services your business uses.
Review pricing and scalability
As well as the monthly fee, look at extra costs such as fees per user or charges for add-ons such as payroll or advanced reporting. Also think about the long-term – how will your business needs evolve and will the software scale with you? Look for platforms with a basic tier that meets your current needs, but also one that offers an option to upgrade as your business grows.
Read reviews
Once you have your shortlist of providers, check online reviews of the company (the more recent, the better) or speak to friends, colleagues or accountants to see whether they have any recommendations. Also look for free trials or demo versions, so you can see how it feels in everyday use and avoid committing to something that’s clunky to operate.
Popular accounting software options in the UK
FreeAgent
Designed for freelancers, sole traders and small businesses, FreeAgent automates core tasks such as invoicing, bank reconciliation, VAT and self-assessment. It integrates with business bank accounts from NatWest Group, which offers it free for eligible account holders.
FreshBooks
Also aimed at small businesses and freelancers, FreshBooks is cloud-based accounting software that offers support with financial tasks such as invoicing, project management, accepting online payments and VAT returns. It is simpler than some competitors.
QuickBooks
QuickBooks is a popular cloud accounting platform that offers invoicing, expense tracking, automated bank reconciliation and reporting, as well as payroll and VAT support with some plans. It centralises financial data and simplifies tax preparation
Sage
Sage is cloud-based financial management software for small to medium businesses. It offers support with invoicing, expenses, cash flow, payroll and tax reporting, and offers features such as bank reconciliation, receipt capture and financial insights.
Xero
Another cloud-based platform, Xero covers core accounting needs, including invoicing, bank feeds, reconciliation, expenses and reporting. It offers several different price plans and connects with over 1,000 third-party apps to streamline your business operations.
Zoho Books
Zoho Books is cloud-based all-in-one online accounting software for small businesses. It helps to manage finances, track income and expenses, invoice clients and reconcile bank accounts. It comes with features such as automated bank feeds, customised invoices and payment reminders.
Popular accounting software options in the UK
FreeAgent
Designed for freelancers, sole traders and small businesses, FreeAgent automates core tasks such as invoicing, bank reconciliation, VAT and self-assessment. It integrates with business bank accounts from NatWest Group, which offers it free for eligible account holders.
FreshBooks
Also aimed at small businesses and freelancers, FreshBooks is cloud-based accounting software that offers support with financial tasks such as invoicing, project management, accepting online payments and VAT returns. It is simpler than some competitors.
QuickBooks
QuickBooks is a popular cloud accounting platform that offers invoicing, expense tracking, automated bank reconciliation and reporting, as well as payroll and VAT support with some plans. It centralises financial data and simplifies tax preparation
Sage
Sage is cloud-based financial management software for small to medium businesses. It offers support with invoicing, expenses, cash flow, payroll and tax reporting, and offers features such as bank reconciliation, receipt capture and financial insights.
Xero
Another cloud-based platform, Xero covers core accounting needs, including invoicing, bank feeds, reconciliation, expenses and reporting. It offers several different price plans and connects with over 1,000 third-party apps to streamline your business operations.
Zoho Books
Zoho Books is cloud-based all-in-one online accounting software for small businesses. It helps to manage finances, track income and expenses, invoice clients and reconcile bank accounts. It comes with features such as automated bank feeds, customised invoices and payment reminders.
Should you use paid-for or free accounting software?
That really depends on the type of business you run, your budget and your requirements. If you’re a freelancer or solo entrepreneur with basic needs and a tight budget, free accounting software is likely to be the best choice – at least, for now.
But if you are a growing business that requires advanced features, support and scalability, you may find free accounting software options too limiting. Paying extra for the features and tools you need could pay off in the long run.
Accounting software pricing: what to expect
Some on-premises open-source accounting packages have no monthly fees, while cloud subscriptions vary from provider to provider. The exact price depends on your business size and the plan you choose.
Entry-level plans offer the cheapest option but are typically only suitable for sole traders and small businesses requiring basic bookkeeping. These may only cost £10 to £20 a month
Established VAT-registered businesses that require more advanced accounting features must pay more for mid-range and advanced plans, where prices can be anywhere between £30 and £100 a month
However, these costs often only cover the basic package, and you may have to pay extra for add-ons such as payroll and compliance, or multiple users. This makes it crucial to read the small print carefully and understand what’s included.
Many providers offer free trials or initial promotional pricing that can make it much cheaper for the first month or so. It’s worth taking advantage of these but check what’s included before signing up and make a note of when the free trial or discount ends.
Six questions to ask before picking your accounting software
1. Is it HMRC-recognised?
You need to pick software that meets HMRC’s requirements so you can file tax returns correctly
2. Does it support VAT and MTD?
This is essential for many businesses. Even if MTD doesn’t affect you now, it could do in the near future
3. Can my accountant access it?
Shared access saves time
4. Will it grow with my business?
Look for software that can continue to support you as your business expands
5. What support is available?
Check whether there’s live chat, phone support or guided tutorials
6. Does it integrate with my existing business tools?
Automatic connections can save hours of work and reduce costly mistakes
Top tips for setting up your accounting software
When setting up your accounting software, follow our top tips below:
Link bank accounts early on – Connect your business bank account from the very start, because automatic bank feeds save you hours of manual entry
Set up categories correctly – This ensures your reports are accurate, you file VAT returns correctly and you can easily see where your money goes
Schedule regular bookkeeping time – Set aside a weekly or monthly slot to review your transactions and check invoices and expenses
Invite your accountant – Give your accountant early access so they can help with reconciliation and provide guidance
Pros and cons
Pros
Saves time and money by automating data entry tasks like bookkeeping
Provides a single, holistic view of your business finances for greater accuracy
Offers real-time reporting, analysing and forecasting
Some packages help bring related tasks like payroll and inventory management together
Can usually be scaled up or down quickly and easily
Cons
Cloud-based software requires internet access
On-premises software can be costly to obtain and deploy on-site
Can come with a steep learning curve – particularly for non-accountants
Security of private and confidential data – whether in the cloud or on-premises
Pricing can be confusing, with costs easily inflated by add-ons
Do I need to hire an accountant?
Although accounting software may provide all you need to manage relatively simple business finances, the larger and more complex your business is, the more compelling the argument for hiring a qualified accountant. Reasons to consider hiring one include:
Offloading time-consuming duties like bookkeeping, payroll and invoicing
Learning which accounting method is best for your small business
Ensuring accounts remain accurate and compliant
Timely filing of tax returns, avoiding potential fines
Today’s accountants do more than simply number-crunch too – with 83% of UK small business owners saying their accountant or bookkeeper helped limit the impact of high inflation last seen in 2022 through expert advice and guidance, helping save those businesses an average of around £28,000 a year.
UK small business owners said their accountant helped limit the impact of peak inflation seen in 2022[2]
83%
FAQs
Can I still use spreadsheets for accounting in 2026?
Yes, but remember that the risk of error is higher when you enter data manually. You may also need to start using accounting software in the future to comply with new MTD rules. If you still want to use spreadsheets, bridging software acts as a link between your spreadsheet records and HMRC’s systems. How do I know if accounting software is HMRC-compliant?
The GOV.UK website lists all MTD and HMRC-compliant software that’s currently available, so it’s worth checking whether yours is there.
Can I use my personal bank account with accounting software?
Technically, you can use your personal bank account with accounting software, but it’s not recommended. If you’re a limited company, you must open a business bank account. Sole traders can use personal bank accounts for business transactions, but it’s less complicated if you separate your personal and business finances, and open a business account.
How much does accounting software cost?
Costs depend on the type of platform you use and the features you need. You might pay £10 a month for a basic setup, rising to more than £100 a month for more advanced options.
What features should I prioritise when choosing accounting software?
The features you should prioritise when choosing accounting software are its core tools covering bookkeeping, billing, invoicing, and reporting. Once you’ve evaluated these, move on to other features your business might require, such as payroll or project management tools.
Can I use Excel for bookkeeping?
Yes, you can use Excel for bookkeeping. You’ll find many websites offering a selection of templates, but remember that the more complex your business needs, the less suitable Excel is as a substitute to a dedicated accounting software, which eliminates the need for multiple spreadsheets and minimises potential errors.
Does a sole trader need accounting software?
A sole trader needs accounting software only if they are registered for VAT to meet the UK’s MTD (Making Tax Digital) requirements for taxation. Those not registered will not be required to use accounting software until April 2026, according to the Gov.UK website.
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References
1. Data from Intuit: As reported in Insider, accounting software can have multiple benefits for any business, large or small, which is why 89% of small business owners say it’s an essential component of their operation
2. Data from Intuit: 83% of UK small business owners said that their accountant or bookkeeper helped limit the impact of inflation in 2022 through expert advice and guidance, helping save those businesses an average of around £28,000 a year.