Accounting software makes it easy for those who are self employed to manage their finances. As the HMRC scheme ‘Making Tax Digital’ has now been implemented, businesses which have already registered for VAT and have a turnover of more than £85,000 will be required to submit their self assessment tax return using compatible software.
You’d be forgiven for feeling slightly confused as to which accounting software you should be using as each of the software packages available has their own set of advantages and disadvantages. Before selecting a package therefore, you need to conduct your research into which software meets the needs of your business.
In this article, we have listed the five best accounting software packages which should help you to decide which software is most suitable for your business:
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Bookkeeping and Accounting Software for Business
Accounting software has traditionally been complex and cumbersome to use. In the past, these software packages were more suited to the needs of large enterprises than those of small businesses.
However, in recent times, even self employed workers and small businesses have started making use of accountancy software owing to the wide range of software which is now available for use and the fact that they are more cost effective now than they were previously.
Using this software has many benefits as they not only help businesses manage their finances but also help them manage invoicing, bookkeeping, payroll and inventory. Several convenient-to-use reporting tools may also be included in the product that you select, which can further help you with monitoring your profit and loss and also tracking your cash flow finance.
As businesses have no choice but to comply with Making Tax Digital, they need to select an accounting software which helps them keep digital records and file tax returns digitally.
The Five Best Accounting Software Packages
As there are many providers of accounting software, it has become difficult for businesses to select a program which meets their requirements. After much research, we have put together a list of options which you can explore for your business.
Most accountancy programs used nowadays are cloud-based which means you no longer have to worry about which machine you are using as they are compatible with both PC and Mac. Moreover, these programs have also been launched on mobile platforms, giving you the added benefit of managing your financial affairs even when you do not have access to a computer.
The software programs listed below offer a free trial which is usually valid for a period of one month. This gives you the flexibility to try different software free of cost and make an informed decision when you are about to purchase a program.
FreeAgent is cloud-based accounting software which focuses primarily on tasks such as time tracking, invoicing and expense management. Its functionality makes it best suited for small businesses and freelancers.
It allows the user to upload pictures of receipts and also set reminders for due invoices. The pricing has been set at £19 per month and they also offer a 50 percent discount for the first six months.
This software company claims that it is Making Tax Digital ready and that their customers have been able to submit digital VAT returns from as early as 2010.
Intuit, which has developed Quickbooks, is one of the first providers of accounting software. This software too is a cloud-based program like FreeAgent and many others.
They offer a basic package which enables small businesses to manage payroll and VAT and allows freelancers to track the income that they earn as self-employed workers. It also comes with many inbuilt monitoring and reporting tools.
Subscriptions are offered to independent contractors and freelancers at a discounted price of £3 per month for the first six months following which the user must pay £8 for each month. VAT registered companies and small businesses on the other hand need to pay £5 per month for the first six months and the price later increases to £12 per month.
A big and renowned player in the development of accounting software, Xero can help you with managing expense claims, payroll, inventory and invoicing. It also has the ability to import your PayPal, banking and credit card data and they have also developed a mobile application which works on Android as well as iPhone.
For the first three months, a user needs to pay £4 per month following which they are required to pay £10 per month. Paying for this package allows the user to submit digital VAT returns to HMRC.
Zoho Books, along with being a highly customisable application, helps you sort expenses, track inventory and issue invoices. However, it currently lacks a payroll feature.
Other applications offered as part of a suite of cloud-based software, besides Zoho books, include Zoho expense and Zoho invoice. As it is connected to your bank account, you will be provided with real time updates on cashflow. They can also be integrated with a whole host of other applications. This gov.uk listed MTD compatible application is priced at £6 per month.
FreshBooks is a cloud-based software which is known to have a user friendly interface. It has been designed with the basic accounting needs of small businesses and freelancers in mind, and can be easily integrated with applications such as Zendesk and Paypal.
According to the gov.uk website, FreshBooks is not MTD compatible but from 1st April 2019, the company has developed a portal which allows users to submit digital tax returns. Before purchasing the software you must carefully review instructions regarding the same. The UK website doesn’t provide any information regarding the price of the product but the US product has been priced at $15 per month.
Besides the paid software listed above, there are several free accounting software applications available on the internet which you can give a try. Even though we have provided information regarding particular software being Making Tax Digital compatible or not, it is advised that users refer to the tool developed by HMRC and also research extensively before making a purchase.