Accounting software for a small business?

[redrock7]

What would you recommend is the best accounting software for a small business?

Xero, FreeAgent, QuickBooks, or something else?

Has anyone used Money Manager from Moneysoft and how does it compare? It's just a one off purchase, so no subscription is required which is a big bonus.

I like the look of FreeAgent but the cost is at least £190 + VAT per year (after the 1st year) so it's not cheap.

I'd also be interested in what you think about the invoicing capabilities (if any) of the applications.

Thanks.

 

[John Hemming]

I think to get advice on this point you would need to say a bit more about what the business does.

 

[Scalloway]

Moneysoft does not have an invoicing facility. If your business is simple, eg just billing your time, you could set up a spreadsheet system to produce invoices.

 

[WaveJumper]

I would also suggest (if you have one) checking what your accountant recommends as they may well offer cheaper subscription for software an have a preference

We use Xero

 

[MyAccountantOnline]

What would you recommend is the best accounting software for a small business?

Xero, FreeAgent, QuickBooks, or something else?

Has anyone used Money Manager from Moneysoft and how does it compare? It's just a one off purchase, so no subscription is required which is a big bonus.

I like the look of FreeAgent but the cost is at least £190 + VAT per year (after the 1st year) so it's not cheap.

I'd also be interested in what you think about the invoicing capabilities (if any) of the applications.

Thanks.

It very much depends on what your business is and what you need.

I have small business clients who use all of the above. I personally know Accounts Portal and FreeAgent very well, and can pass on discounts to clients who use either.

Accounts Portal is good for basic invoicing, its the software I use for my accountancy practice. It works well for one-off invoices and for monthly invoicing, which once set up is done automatically. FreeAgent is also very good for invoicing although the invoice formats aren't quite so flexible if that's an issue.

If FreeAgent is of interest do bear in mind it's free if you bank with Natwest, RBS, Ulster Bank or Mettle. I have a few clients who have a Mettle bank account with a debit card they use for just a few transactions to get a free subscription.

 

[Spur Support Services]

As Nicola says, the important thing to consider is your business, what it does and what plans you have for the future.

Most accountants have a preferred software, mine is Xero, because I love the integrations, both the ones that improve business operations and those that help with compliance and control.

It may be worth speaking to a few accountants who have different preferences and then signing up for support from the one that you prefer.

You will have to invest to obtain the value of an accountant's support and assistance.
It is up to you to consider whether the value of the support saves you sufficient time, so that you can concentrate on generating more business and hence more profits.

 

[redrock7]

Thanks for the replies and information, it's very helpful and appreciated!

We currently do about 50 invoices a month (roughly), and a lot of these are monthly invoices that repeat every month. We currently use old software to produce our invoices but I would like to get something more modern. If the monthly invoices could be automated that would be a big help for example.

For accounting, we're currently using an older version of Money Manager from Moneysoft. Do we upgrade to their latest version (one of the benefits being that you buy it and there are no ongoing subscription costs), or do we go for something like Xero or FreeAgent with more features, but they require an ongoing subscription cost?

Are Xero, FreeAgent and QuickBooks generally considered the leading accounting software applications? I've contacted our accountant as well to see what they would recommend.

 

[MyAccountantOnline]

Thanks for the replies and information, it's very helpful and appreciated!

We currently do about 50 invoices a month (roughly), and a lot of these are monthly invoices that repeat every month. We currently use old software to produce our invoices but I would like to get something more modern. If the monthly invoices could be automated that would be a big help for example.

For accounting, we're currently using an older version of Money Manager from Moneysoft. Do we upgrade to their latest version (one of the benefits being that you buy it and there are no ongoing subscription costs), or do we go for something like Xero or FreeAgent with more features, but they require an ongoing subscription cost?

Are Xero, FreeAgent and QuickBooks generally considered the leading accounting software applications? I've contacted our accountant as well to see what they would recommend.

I certainly highly recommend Accounts Portal to you based on your invoicing requirements. It is one of the cheaper pay monthly options too (its £6 + VAT per month for my firms clients). You can get a free trial if it's of interest. https://www.accountsportal.com/features/invoices

I think you'll find the time savings of using good software like this will well outweigh the small monthly cost.

 

[JEREMY HAWKE]

Im surprised none has mentioned Sage

I like this system

 

[John Hemming]

There are horses for courses. Sage have a lot of useful bits to their software. Personally I think software designed to be run in a browser is the way things are going. My personal target market is smallers traders really one-man bands who want a system that is really easy to understand and takes little time to operate and does the job (the basic job is done for free).

Hence trades people, small shops/takeaways or people who own a few properties. At the moment I don't do the more complicated integrated systems with stock management although I will probably extend things to do something else in the future. I have I think around 5 firms of accountants and/or book keepers using my software for the bridging and two bands (one prog rock one folk rock - neither of which has me as a member) as well as some companies with turnovers in excess of £100 Million, but my target market is the smaller business.

The OP wants something at bit more integrated/complicated than my system and I think they would be best looking at a proper cloud system - I am not sure Sage can be described as that although it may have changed and you would need to look at them in some detail. It is best to keep an eye on Making Tax Digital as MTD for corporation tax will come in at some stage. However, that will be after MTD ITSA in 2023-24 so it can be ignored to some extent.

MTD ITSA is quite a bit of programming work so I would expect some providers to decide not to do it, but the big ones (Xero, Quickbooks, Sage) have no real choice.

I am in discussion with others about me providing the MTD backend as I "roll my own" when it comes to coding so I have already written all the ITSA stuff that there is to do at the moment (there will be more requirements soon). I have written some really complicated stuff which makes it easier to interface with government APIs hence I was the first to do the new APIs just around Xmas.

 

[Paul Kelly ICHYB]

I like the look of FreeAgent but the cost is at least £190 + VAT per year (after the 1st year) so it's not cheap.

I guess you haven't seen the costs of the other you mention!

If you have a NatWest account you can get FreeAgent for free which probably does what you want (it might be worth opening up a Mettle account for this).

I use Kashflow which I like because it is relatively simple, however, I am looking at moving to Clearbooks.

 

[Cloud Accounting]

Free agent, Kashflow etc.. are fine but suspect you may eventually outgrow or just want the additional features & integrations Quickbooks/Xero bring.

The latter are subscription based, but could pay for themselves in saved effort via ability to create recurring invoices, send auto reminders, link to paypal, Gocardless etc..

 

[John Hemming]

Which all shows that there is no easy answer. After many years writing different sorts of accounting and record keeping systems I decided to have something really simple and straight forward. That does mean it will never do the more complicated things, but often for smaller organisations the time taken to work out how to do the complicated things means that any time saved is taken learning how to do it.

In larger organisations it is worth investing the time into saving time, but often in a smaller organisation just copying invoices from a word document or excel document and typing the details into a list is best. It may take more time than an automated system, but it takes less time including learning how to do things and the set up time and when it goes wrong it takes no fixing.

 

[redrock7]

Free agent, Kashflow etc.. are fine but suspect you may eventually outgrow or just want the additional features & integrations Quickbooks/Xero bring.

The latter are subscription based, but could pay for themselves in saved effort via ability to create recurring invoices, send auto reminders, link to paypal, Gocardless etc..

The ability to automate recurring invoices is definitely something I would want/need, especially if the business grows and the number of monthly invoices we are doing increases as a result. I take it neither Kashflow nor Clearbooks offers that facility?

Does Accounts Portal offer that facility? Thanks.

 

[Paul Kelly ICHYB]

I take it neither Kashflow nor Clearbooks offers that facility

What makes you think that?

 

[redrock7]

What makes you think that?

Sorry I was part asking/part assuming from what the other poster ("Cloud Accounting") said. Do they offer automated recurring invoices?

 

[Paul Kelly ICHYB]

I believe they do - why don't you take a look and see what their features are?

 

[MyAccountantOnline]

The ability to automate recurring invoices is definitely something I would want/need, ...

Does Accounts Portal offer that facility? Thanks.

Yes it does

 

[Cloud Accounting]

The ability to automate recurring invoices is definitely something I would want/need, especially if the business grows and the number of monthly invoices we are doing increases as a result. I take it neither Kashflow nor Clearbooks offers that facility?

Does Accounts Portal offer that facility? Thanks.

Sorry, i should have been a little clearer as i think both Kashflow & Clearbooks do also offer a recurring invoice function.

Quickbooks/Xero are really next level up in terms of sophistication, functionality, integrations etc.. so depends what you need. Although If you're a growing business the latter might future proof you to some extent even if for now you might technically be able to get away with something cheaper.

If you do a google you should be able to find comparisons on functionality of the main cloud accounting packages.

 

[John Hemming]

Noting that the above post is from someone who only posts to promote that App, I would make a simple point which is:

"You need to have an accounting system that either concentrates on the UK market or has facilities to automatically output data in a form that can go directly into a bridging system".

That is because MTD for VAT is already in position and MTD for Corporation tax will follow ITSA (ITSA is probably the most complex because Income Tax (and CGT) is really complicated). You must have a digital audit trail for MTD.

All the UK focussed providers will do something about this. Some are using me as a backend where they generate data that automatically feeds into my systems (I have a number of large bakeries that use my systems because of that). Others are generating spreadsheets which can be automatically linked.

The bigger and more advanced players such as Sage, Quickbooks, Xero will do MTD themselves. Others such as the Accounts Portal may decide to use someone like myself to do the difficult parts of MTD and use us as a backend.

However, if you don't have an accounting system that concentrates on the UK market this will be a problem

Unusually I am not recommending my services for holding your primary records that's because I have a really good system for smaller businesses, but it appears that you could do with something different.

 

[MyAccountantOnline]

If you are looking out for Accounting & Online Invoicing Software with functions like Estimate Management, Expense Management, Invoice Management, Inventory Management, then -

That's one I've not come across.

Is it MTD compliant?

 

[Alan]

I have used Kashflow, Quickbook and Xero in different businesses as a 'user' not an accountant.

For a small business they all do the same job, repeating invoices, integration to payment systems like GoCardless , feeds from banks, VAT etc.

I can understand why accountants prefer Xero as it speak most like an accountant, as in it it complex and not obvious to a lay person.

Quickbooks is a bit more friendly but has some interesting quirks.

In my opinion KashFlow is by far the easiest to understand, as it speaks in business terms, mainly.

I have no doubt Xero is the most 'powerful' but there is a price to pay for power.

I would say one of the major considerations is if you have any feed automations required, e.g. from a job booking system - as this would drive the selection ( operational efficiency )

 

[MyAccountantOnline]

Two new users who've not posted on the forum previously both recommending and using ***, it must be good!

I wouldn't describe QuickBooks Online, Sage, and Xero as ''basic accounting programs''

 

[johndon68]

Two new users who've not posted on the forum previously both recommending and using ***, it must be good!'

Must be, according to their website it is 'The most trusted small business software for all round invoicing needs' and 'The world's best business invoice management system'

Not a single mention of VAT on their website though...

 

[Karimbo]

loads of people recommending asking what accountant uses and go with that. Something that's easy for your accountant isn't necessarily going to be easy for you. Accounts are accounts, and they should be well versed in it, to handle accounts in any software.

I use freeagent for free now, after paying for it for it £30 for many many years. £360 a year, going back to 2015! I got it free this month through being a member of Mettle.

There is a free option, when I was researching a free option, https://www.pandle.com/uk/pricing/ came up.

If I didn't have freeagent for free, I would definately consider pandle. I think Pandle is a cloud play - they have free and pro plans for £5+ a month. They're just dirt cheap to build up their user base. They underprice themselves to compete with the sages/xeros/freeagents of the world.

They do offer a free account for life though..

caveat emptor: I never used pandle myself.

 

[Newchodge]

I use Quickfile, which meets my needs, is easy to use for a non-accountant and automates invoices.

My advice, as a non-accountant, is to do some trials and see how you find data entry (unless you are going to use book-keeping services. Something like Sage is, apparently, very efficient but when I have tried to use it I found it very complex. I used Quickbooks some years ago and never again. At that time it appeared to be a Canadian(?) system that had tacked on UK accounting practices with loads of workarounds that complicated matters because the system was not designed for the UK. I understand that has now improved?

Any accountant worthy of the name can accommodate whatever system you use, although many prefer particular systems.

 

[Karimbo]

I use Quickfile, which meets my needs, is easy to use for a non-accountant and automates invoices.

Do you use this as your complete accounting software? The specs do not mention any RTI/payroll features. Do you use a different software to run payroll then?

Freeagent is more expensive than others (when I was paying for it). But there were't silly add-ons for data, payroll etc. Everything is included which works for me.

 

[Newchodge]

Do you use this as your complete accounting software? The specs do not mention any RTI/payroll features. Do you use a different software to run payroll then?

Freeagent is more expensive than others (when I was paying for it). But there were't silly add-ons for data, payroll etc. Everything is included which works for me.

No I have completely separate payroll as I run it for other employers.

 

[Timothiii]

Is it possible to use excel to record all transactions and file with HMRC?
Does HMRC accept accounting system built by excel?

 

[Scalloway]

At present there is no restriction on what you use to prepare your accounts for Income Tax, you can do the whole lot on sheets of paper if you wish. I believe you can still file your self assessment on paper.

However as part of the Making Tax Digital (MTD) programme you will need to file online reports to HMRC in the next year or two and this will need dedicated software.

VAT must be filed online through MTD already.

 

[UK Contractor Accountant]

Is it possible to use excel to record all transactions and file with HMRC?
Does HMRC accept accounting system built by excel?

yes use Excel with bridging software for MTD vat filing and also for Income tax filing when tax digital comes in 2025?

I use VT Transaction + and their Excel bridging software for a number of my firms clients.

 

[Timothiii]

At present there is no restriction on what you use to prepare your accounts for Income Tax, you can do the whole lot on sheets of paper if you wish. I believe you can still file your self assessment on paper.

However as part of the Making Tax Digital (MTD) programme you will need to file online reports to HMRC in the next year or two and this will need dedicated software.

VAT must be filed online through MTD already.

Thanks so much.

If company turnover <50k (exempt VAT), still have to use MTD after it launched?

 

[Scalloway]

MTD for Corporation will come at some point in the future for Corporation Tax but you don't need to worry about it at the momemnt.

The more onerous accounting requirements for limited compnay accounting mean that an Ecel system needs to be very carefully set up so that a fulll set of accounts can be drawn up for Companies House and HMRC.

 

[Elliot Green]

What would you recommend is the best accounting software for a small business?

Xero, FreeAgent, QuickBooks, or something else?

Has anyone used Money Manager from Moneysoft and how does it compare? It's just a one off purchase, so no subscription is required which is a big bonus.

I like the look of FreeAgent but the cost is at least £190 + VAT per year (after the 1st year) so it's not cheap.

I'd also be interested in what you think about the invoicing capabilities (if any) of the applications.

Thanks.

FreeAgent is good and easy to use.

 

[Elliot Green]

As Nicola says, the important thing to consider is your business, what it does and what plans you have for the future.

Most accountants have a preferred software, mine is Xero, because I love the integrations, both the ones that improve business operations and those that help with compliance and control.

It may be worth speaking to a few accountants who have different preferences and then signing up for support from the one that you prefer.

You will have to invest to obtain the value of an accountant's support and assistance.
It is up to you to consider whether the value of the support saves you sufficient time, so that you can concentrate on generating more business and hence more profits.

Out of interest why is Xero preferred to FreeAgent?

 

[Elliot Green]

Im surprised none has mentioned Sage

I like this system

I think FreeAgent is simpler than Sage.

 

[Elliot Green]

Two new users who've not posted on the forum previously both recommending and using ***, it must be good!

I wouldn't describe QuickBooks Online, Sage, and Xero as ''basic accounting programs''

Even FreeAgent is not totally basic if you have to do journal entries. Interesting quirk on the dividend postings.

 

[JEREMY HAWKE]

I think FreeAgent is simpler than Sage.

Life here has complications we need Sage

 

[Maverick77]

What would you recommend is the best accounting software for a small business?

Xero, FreeAgent, QuickBooks, or something else?

Has anyone used Money Manager from Moneysoft and how does it compare? It's just a one off purchase, so no subscription is required which is a big bonus.

I like the look of FreeAgent but the cost is at least £190 + VAT per year (after the 1st year) so it's not cheap.

I'd also be interested in what you think about the invoicing capabilities (if any) of the applications.

Thanks.

Hi there
If you do your banking with NatWest, you will get FreeAgent for free. A really good accounting package that also has functionality to prepare your accounts, company tax return and personal tax return.

 

[justintime]

Thanks so much.

If company turnover <50k (exempt VAT), still have to use MTD after it launched?

At the moment yes, all sole traders/landlords with a turnover of 10k or more be will need to be on MTD ITSA. It's possible this threshold may increase before MTD ITSA is introduced.