As a medium-sized business owner, you could be in a vulnerable position: you’re growing but you still need of help so you don’t stagnate.
You aren’t necessarily dealing with the accounting processes you once knew. HMRC is in the process of rolling out Making Tax Digital (MTD), meaning that many business owners have had to change the way they do their accounting.
The problem is that a lot of accounting software providers gear their products towards small businesses, sole traders and/or freelancer. As the owner of medium sized business, that leaves it up to you to sift through the figures and cast your own judgements.
To help you decide, we’ve looked at the best UK mid-sized business accounting software packages on the market.
Best UK medium sized business accounting software
Every business is different. Most smaller businesses can make do with basic functions like invoicing, bank reconciliation, income and expense tracking and financial report generation. However, some slighter bigger businesses might need more.
Indeed, most UK small business accounting software offers the same features, it’s just that you may feel more comfortable with how one is designed over another – and then of course, there’s the cost.
Best accounting software for UK medium sized businesses
First, make a list of what you need to do in terms of bookkeeping and accounting.
- Do you need to track inventory and purchase ordering?
- Do you need to invoice payment deadlines?
- Do you need foreign currency transactions?
- Do foreign currency transactions convert to sterling?
- How many users will need to use the accounting software?
How much can you afford?
Free accounting tools can be a practical solution when your needs are relatively straightforward, but they might not have the features to accommodate you as you scale. Some providers limit the number of invoices you can send or charge extra for VAT filing, reporting and other functions. You should also factor in transaction fees, additional users and the cost of upgrading as your business grows.
The other change that has happened is the rise of monthly subscription as opposed to a one-off software licence. On the plus side, Software-as-a-Service (SaaS) means your tech is always up to date. The downside is that, as the months roll on, you eventually end up paying more than if you’d bought a one-off licence.
4 questions you need to ask your accounting software supplier
- How do you back up data?
- Tell me about customer support. What are your hours and how quickly should I expect a response if I raise an issue?
- Can you tell me about a similar client who’s signed up to your software?
- Does your platform support foreign currency payments and convert them into sterling?
Pick an accounting software solution that will grow with you
Don’t be tempted to buy the most basic licence only to find you’ve outgrown what’s provided within a year. Ask your would-be supplier to explain how its accounting software can scale with your growing business.
Sage Accounting
Sage is great for scaling businesses, with tools for cash flow and VAT, payroll, expenses and financial reporting. Its Standard plan also includes cash flow forecasting, custom reporting and Construction Industry Scheme (CIS) management.
Its AI-powered tools take on much of the workload. Sage Copilot can help you manage financial tasks, while automated receipt capture and bank reconciliation reduce the amount of data you need to enter yourself.
Sage offers three cloud-based accounting plans, from Start, which covers basic bookkeeping and invoicing, to Plus, which adds more sophisticated features such as inventory management, budgeting and multi-currency accounting.
Features:
- Invoicing and bank reconciliation
- VAT calculation and submission through Making Tax Digital
- Cash flow forecasting and custom financial reports
- Payroll and CIS management
- Inventory management and multi-currency accounting (Plus)
- AI-assisted bookkeeping and receipt capture
Pros:
- Broad range of accounting features for growing businesses
- Built-in payroll and AI assistance
- VAT and CIS functionality
- Unlimited users on the Plus plan
Cons:
- Start is limited to one user and Standard to three
- Inventory and multi-currency features require Plus
- Additional charges can apply for receipt capture and payroll usage
Price (excluding VAT):
Sage currently offers 90% off for the first six months.
- Start: £2 per month for six months, then £20 per month
- Standard: £4.30 per month for six months, then £43 per month
- Plus: £5.90 per month for six months, then £59 per month
Mobile: iOS, Android
Xero
You can use Xero to send invoices, reconcile bank transactions, track bills and expenses, manage payroll and generate financial reports. More advanced features, including multi-currency accounting, cash flow forecasting and project tracking, are available on its higher-tier plans.
One of its biggest selling points is that it integrates with over 1,000 apps, including ecommerce platforms, payment processors and inventory management tools, making it easy to share data across different business functions.
Another advantage, especially for businesses with several employees involved in managing finances, is that Xero doesn’t charge per user for general accounting access. You can give your accountant and other members of your team access without paying for additional licences.
Features:
- Bank feeds and reconciliation
- Invoicing, purchase orders and bill management
- Basic inventory tracking
- VAT and CIS management
- Payroll, expense claims and mileage tracking
- Financial reports, dashboards and cash flow forecasts
- Multi-currency accounting (Comprehensive and Ultimate)
- Integration with more than 1,000 business apps
Pros:
- No per-user licence fees for general accounting access
- Extensive range of integrations
- Decent reporting and financial management features
- Payroll included in higher-tier plans, subject to employee limits
Cons:
- Ignite is limited to 20 invoices and 10 bills per month
- Multi-currency accounting requires Comprehensive or Ultimate
- Additional charges apply when you exceed certain payroll, expense and project allowances
- Project tracking is reserved for Ultimate
Price (excluding VAT):
Xero currently offers 90% off for the first six months.
- Ignite: £1.80 per month for six months, then £18 per month
- Grow: £3.90 per month for six months, then £39 per month
- Comprehensive: £5.50 per month for six months, then £55 per month
- Ultimate: £7 per month for six months, then £70 per month
Mobile: iOS, Android
Tide
With Tide, you can manage you banking and accounting from the same account. Its accounting tools automatically categorise transactions and reconcile payments, so you don’t have to spend as much time updating your books. You can also create invoices, capture receipts, monitor cash flow and see how much tax you might owe.
Its accounting tools automatically categorise transactions and reconcile payments, so you don’t have to spend as much time updating your books. You can also create invoices, capture receipts, monitor cash flow and see how much tax you might owe.
Tide offers free Making Tax Digital tools for eligible sole traders. If you need more than the basics, its paid accounting service includes features such as financial reporting, VAT filing and cash flow forecasting. You can connect external bank accounts too, so you don’t necessarily have to move all your transactions over to Tide.
Features:
- Automatic transaction categorisation and bank reconciliation
- Receipt capture and storage
- Invoicing and payment tracking
- Cash flow forecasting and financial reports
- VAT and Income Tax filing through Making Tax Digital tools
- Corporation Tax and Self Assessment estimates
- Accountant access and external bank account connections
Pros:
- Banking and accounting integrated into one app
- Free MTD tools available for eligible sole traders
- Automated bookkeeping reduces manual data entry
- Cash flow insights and tax estimates
Cons:
- Requires a Tide business account
- Full accounting functionality requires a paid subscription
- Free invoicing is limited to three invoices per month
- VAT filing through Tide Accounting doesn’t support the VAT Flat Rate Scheme
Price (excluding VAT where applicable):
- Free MTD tools: £0 for eligible sole traders
- Invoice Assistant: £5.99 per month
- Tide Accounting: £13.99 per month for sole traders; £19.99 for limited companies
- Admin Extra: £17.99 per month for sole traders; £24.99 for limited companies
Admin Extra combines Tide Accounting with Invoice Assistant, including additional invoicing and payment-chasing features. Separate business banking charges may also apply depending on your Tide account plan.
Mobile: iOS, Android
Countingup
Unlike Sage and Xero, which offer several accounting plans with different features, Countingup includes its banking, accounting and tax tools in one subscription. The amount you pay depends on how much money is deposited into your account each month.
Countingup takes care of much of your manual bookkeeping for you. It automatically categorises transactions as money moves in and out of your business account, giving you an up-to-date picture of your income, expenses and profit.
Tax management is another of its strengths. Countingup provides real-time tax estimates, suggests expenses you may be able to claim and sends reminders when filing deadlines are approaching. You can also set money aside automatically for your tax bill and earn 1.2% AER (variable) interest on those savings.
Features include:
- Automatic income and expense categorisation
- Receipt capture and storage
- Invoicing, payment links and automatic payment matching
- Real-time profit and loss reporting
- Tax estimates and automated filing reminders
- Making Tax Digital-compatible VAT filing
- Automatic tax savings with 1.2% AER (variable) interest
- Secure accountant access through Accountant Hub
Pros:
- Banking, accounting and tax tools included in one subscription
- Automatic bookkeeping saves time on transaction categorisation
- Real-time tax estimates help with financial planning
- Three-month free trial
Cons:
- Requires a Countingup business account
- Less suitable for businesses needing advanced inventory, project or multi-currency accounting
- Additional banking transaction fees can apply
Price:
Countingup offers a three-month free trial, after which your monthly subscription is based on the total deposits received into your account.
- £5 per month: Monthly deposits of £0–£750
- £12 per month: Monthly deposits of £750.01–£7,500
- £20 per month: Monthly deposits over £7,500
All subscriptions include Countingup’s banking, accounting and tax features. Three account transfers or outgoing Direct Debits are free each month, with additional transactions costing 27p each.
Mobile: iOS, Android
