6 Best Accounting Software for Startups

Just started a new UK business? One of the first things you’ll need to do is put a system in place to manage your accounting. Get it right from the start, and you’ll be in a better position later on.

Accounting software can make life much easier for startups and small businesses. But which is the best choice?

In this guide, we’ll compare some of the best accounting software for startups available in the UK right now. This includes a look at features, fees, eligibility and more. It’s all to help you decide which is the right option for your brand new company.

And while you’re thinking about ways to make managing your business easier, make sure to check out clever solutions like Wise Business. This powerful multi-currency account integrates seamlessly with popular cloud accounting solutions, making it easier to manage business finances both in the UK and internationally.

💡 Learn more about Wise Business

Accounting software for startups

With limited time to manage accounts in-house and limited budget to outsource it, startups are likely to need accounting software from day one.

But it needs to be cost-effective, with an affordable monthly fee along with all the features and services a growing business might need. This includes support with invoicing and quotes, paying bills, reconciling incoming payments and expenses, VAT, project and time tracking, or even payroll if you’re employing others.

Below, we’ll see what some of the UK’s best accounting software startup solutions have to offer. This includes the following providers:

• Xero
• Sage One
• FreeAgent
• Quickbooks
• NetSuite
• FreshBooks.

Startup accounting software: overview

Let’s start with an at-a-glance comparison of each provider in terms of what really matters to your business.

This includes the monthly cost, and what existing customers think of the provider over on review site Trustpilot:

Provider	Trustpilot score	Monthly fee	Best known for
Xero	3.6²	£16 to £59 (discounts available for first 6 months)¹	Cloud-based solutions for small businesses
Sage	4.4⁴	£15 to £39³ (discounts available for first 3 months)	AI-powered accounting for small businesses
FreeAgent	4.7⁶	£9.50 to £16.50 (discounts available for first 6 months)⁵	User-friendly accounting for small businesses
QuickBooks	4.5⁸	£10 to £90 (discounts available for first 6 months)⁷	Cloud-based solutions for small businesses and sole traders
NetSuite	1.5⁹	On request	Global ERP solutions, including accounting software
FreshBooks	2.3¹¹	£15 to £35 (discounts available for first 3 months)¹⁰	User-friendly accounting for small businesses

Comparing accounting software for startups: criteria

To help you compare options and find the best startup accounting software, we’ll look at a few key criteria. These are:

• Eligibility and who each solution is aimed at
• The main features and services
• Fees - including monthly subscription fees and costs for any add-on services.

Xero

Xero is cloud-based accounting software designed for smaller businesses.

It has four plans available - Ignite (£16/month), Grow (£33/month), Comprehensive (£47/month) and Ultimate (£59/month).¹

Of these, Ignite and Grow are likely to be the best options for startups.

Some of the main Xero features include:

• Sending invoices and quotes
• Bills management
• Reconciling bank transactions
• Submit VAT returns to HMRC
• Automatic CIS calculations and reports
• Short-term cash flow snapshot function
• Expenses management (available in Grow, Comprehensive and Ultimate plans)
• Payroll (available in Grow, Comprehensive and Ultimate plans).

Xero has an ‘Average’ score of 3.6 on trustpilot, based on over 7,400 reviews.²

Sage

Formerly known as Sage One, Sage Business Cloud Accounting is a cloud-based solution aimed squarely at small businesses - including startups. Plans range from £15 to £39 a month.³

Sage Accounting offers the following features:³

• AI-powered automation via Sage Copilot
• Create and send invoices
• Bank reconciliation
• Track sales invoices
• Calculate and submit VAT (including MTD support).

The higher your plan tier, the more features you get - including things like managing/submitting CIS, cash flow forecasting, automated receipt capture and multi-currency invoicing.

None of the Sage Accounting plans include payroll, however. For that, you’ll need a separate product - Sage Payroll.

Sage has an ‘Excellent’ score of 4.4 on Trustpilot, based on over 18,500 reviews.⁴

FreeAgent

UK-based cloud accounting software FreeAgent offers solutions for limited companies, partnerships, sole traders and even landlords.

For startup companies, FreeAgent costs £16.50 a month. For sole traders, it’s £9.50 a month. Both options are free if you have a business bank account with NatWest, Royal Bank of Scotland, Ulster Bank or Mettle (provided you make at least 1 transaction a month).⁵

Features vary depending on your plan, but they include:

• User-friendly dashboard featuring cashflow, profit and loss, invoice and tax timelines
• Mobile app
• Smart invoicing tools and estimates
• Expenses tracking
• Smart Capture for receipts
• Time tracking
• Payroll
• MTD-compatible VAT returns
• Bank reconciliation and smart categorisation.

FreeAgent has an ‘Excellent’ Trustpilot score of 4.7, based on over 2,400 reviews.⁶

QuickBooks

Similar to Xero, Intuit QuickBooks is cloud-based accounting software. It offers four different account plans for companies of all kinds, including an additional one for sole traders.

Prices range from £10 to £90 a month. For startups, the best options are the Simple Start plan (£14 a month) and the Essentials plan (£28 a month).⁷

All accounts can be connected to your business bank account, or other accounts like Wise Business.

Features of the Essentials plan include:

• VAT deadline reminders, error checking and submission
• Self assessment and income tax preparation support
• Reporting services
• Upload receipts and track mileage for expense management
• Employee time tracking
• Customised reports and cash flow insights
• Create estimates, send invoices and manage bills
• Multi-currency accounting.

If your startup trades across borders and you need to manage multiple currencies, discover more about Wise Business account, an international money provider that connects with QuickBooks to seamlessly reconciliation.

💡 Learn more about Wise Business

Regarding additional features, with all but the very cheapest account you can also choose a QuickBooks payroll optional add-on which starts at £1 per month depending on your needs.⁷

And if you select one of the more comprehensive plans, you can access features like project management, advanced reporting, automatic data backup, and budget management tools.

Intuit QuickBooks has an ‘Excellent’ score of 4.5 on Trustpilot, based on over 15,100 reviews.⁸

NetSuite

While it may be known for its Global ERP (Enterprise Resource Planning) solutions for larger businesses, Oracle NetSuite also has Cloud Accounting Software available for startups. Pricing is only available on request, as a solution will need to be tailored to your company’s needs.

Features vary depending on your core plan and optional add-ons, but include:

• General ledger capabilities
• Monitor bank accounts and optimise cash flows
• Automated accounts receivable and payable
• Multi-currency accounting
• Audit and compliance reporting, including built-in analytics and enhanced compliance support
• Tax management and reporting capabilities.

Oracle NetSuite has a ‘Bad’ score of 1.5 on Trustpilot, although it’s worth noting that the profile is unclaimed and this rating is only from 27 reviews (some based in the US).⁹

FreshBooks

FreshBooks is known as easy-to-use accounting and invoicing software for small businesses, sole traders and freelancers.

If you’re a new company and don’t need a lot of advanced tools, this user-friendly solution could be a good fit.

Plans cost between £15 and £35 a month, with more features and fewer limits for each subsequent tier.¹⁰

Features of the FreshBooks software include:

• Automated invoicing, including recurring billing
• Automatically capture bills and receipt data for expenses management
• Multiple payment methods
• Financial and accounting reports
• Submit MTD-compliant VAT returns directly to HMRC
• Accountant access.

Freshbooks add ons include £8 per user per month for adding team members to your account, and £15 a month to enable advanced payments.¹⁰

FreshBooks has a ‘Poor’ rating of 2.3 on Trustpilot, based on over 800 reviews.¹¹

FAQs - accounting software for startups

Do you need an accountant for a startup?

There’s no legal obligation to have an accountant if you’re a new business, nor do you necessarily need one at first. You may be fine simply using accounting software. But bear in mind that you may need an accountant to help you submit annual returns for the company, manage payroll (if you have employees) and make sure you’re compliant with tax and other rules.

What is the best accounting method for startups?

Each startup is different, but most find that at least some form of accounting software or the services of a professional accountant can be very useful. Spreadsheets can be complicated, time-consuming and at risk from human error, as well as not necessarily being Making Tax Digital (MTD) compliant.

What to consider when choosing an accounting software for startups?

Cost is an important factor to consider when researching the best accounting software for startups.

But it’s not the only thing to consider. You might also want to look at the user-friendliness of the software, whether it offers the services and features your company needs, and whether it can scale up as your business grows.

You should also make sure the software is Making Tax Digital (MTD) compliant, and that it can connect to your bank or other business account.

International finances made easy with Wise Business account

Wise Business can help startups in the UK to manage finances across multiple currencies, with low fees and the mid-market exchange rate.

Wise Business account connects with Xero, QuickBooks, FreeAgent, FreshBooks and more solutions to help you seamlessly manage your finances across borders.

When you open a Wise Business account, you’ll benefit from all of these useful features:

• Hold and exchange 40+ currencies;
• Send payments to 160+ countries for low fees and the mid-market exchange rate - this is a fair exchange rate with no margins or mark-ups added to it;
• Get local account details to get paid in 8+ currencies like a local;
• No monthly fees or minimum balance requirements;
• Debit and expense cards for you and your team, which you can use in 150+ countries;
• Multi-user access for team members, with ways to control and manage permissions;
• Pay up to 1,000 people at once with the Wise batch payments feature;
• Integrate with your favourite cloud accounting solutions, like Quickbooks.

Get started with Wise Business 🚀

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And that’s it - our rundown of the best accounting software for startups available in the UK right now. We’ve covered all of the big names, including QuickBooks, Xero and Sage, along with the features, fees and Trustpilot scores for each provider.

This should allow you to compare options easily and choose the best one for your brand new business. Good luck!

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Sources used:

1. Xero - Pricing plans
2. Trustpilot - Xero
3. Sage - Sage Accounting
4. Trustpilot - Sage
5. FreeAgent - Pricing
6. Trustpilot - FreeAgent
7. QuickBooks - Pricing
8. Trustpilot - Intuit QuickBooks UK
9. Trustpilot - NetSuite
10. FreshBooks - Pricing
11. Trustpilot - FreshBooks

Sources last checked on date: 23-Oct-2024