Where business is concerned, it goes without saying that keeping your finances in order is imperative. Not only is it necessary in order to ensure that invoices are sent out and paid on time, and to help with forecasting cash flow, but detailed financial records are critical when the taxman comes knocking.
Fortunately, this is much easier than it used to be. Today's accounting software and invoicing packages are built for business owners, not accountants, which means there's no complicated jargon and you can be up and running in minutes. Cloud-based services let you monitor your business from anywhere on a range of devices, and there's no need to worry about backups because the provider will handle that for you, too.
There are many features to consider when choosing accounting software. Okay, you know you need invoicing, but what about quotes? Time tracking? Purchases, payroll, credit control and more? Every package has its own mix of features, and they're not always directly comparable. To save you trawling through free trial after free trial to find the package that's right for you, we've highlighted some of the best packages available to help you get started.
- Also check out our feature on everything you need to know about SMB accounting software and our best free accounting packages
FreshBooks is a popular cloud-based accounting service designed specifically for small business owners.
The package has plenty of features – invoicing, expense tracking, time tracking, a host of business reports, even an option to take credit card payments (for a 2.9% plus 30 cents transaction fee) – but a straightforward interface aimed at non-accountants ensures you'll be up-and-running right away.
Despite the simplicity, there's real depth here. You can bill in any currency, save time by setting up recurring invoices, allow customers to pay via credit card by checking a box, and even automatically bill their credit card to keep life simple for everyone.
If you need more power, the system integrates with many other services, including PayPal, MailChimp and Basecamp, Gusto, Zendesk and more.
Management hassles are kept to a minimum. You're able to access and use the system from your desktop or its free iOS and Android apps, and because it's a cloud-based system there's no need to worry about backups.
If this sounds appealing, you can try FreshBooks for 30 days without using a credit card. Pricing after that is straightforward, as the only major difference between the accounts is your number of clients.
The baseline $13.50 (around £10, AU$18) per month (paid annually) covers you for five clients, $22.50 (around £16, AU$29) allows billing 50 clients and $45 (around £32, AU$59) covers you for a massive 500. Additional users can each be added for $10 (around £7, AU$13) per month.
Intuit QuickBooks may have been around since the days of DOS, but the latest version is right up-to-date – it's an easy-to-use cloud-based suite for just about all your business needs.
Even the Essentials plan for £10.50 (around $15, AU$19) per month has plenty of features: invoicing, expense tracking, payment handling (with a 2.70% transaction free), plus it allows you to track and calculate VAT, and manage payroll and pensions for an extra £1 per employee per month.
Just like FreshBooks, there are a pile of apps to add more features: inventory management, Shopify integration, job scheduling, CRM and more. These can be expensive – many services cost more than QuickBooks itself – but there are exceptions. Add GoCardless, for instance, and you're able to set up and take regular Direct Debit payments from customers for a mere 1% transaction fee capped at £2 – and there are no sneaky setup charges or other hidden extras. QuickBooks also offers mobile apps for iOS and Android.
Overall we'd usually prefer FreshBooks, but there's plenty to like about QuickBooks, too, and with free trials available it's easy to try them both.
Xero might grab your attention with its low $10 (around £7, AU$13) per month Starter account but look closely and limitations soon become apparent: like being restricted to sending a maximum of five invoices, entering five bills, or reconciling only 20 bank transactions. The Starter plan also doesn't support payroll functions, and lacks multi-currency support.
Still, if you can live with those restrictions there are some pluses here. The service offers smart expense tracking and management, optionally on your mobile with Xero's excellent app for Android and iOS. There are dozens of configurable reports, simple budgeting, and no limits at all on additional users or the accountants you might want to access the data.
If the invoice, bank or billing issues are a problem then the Xero Standard plan looks like a better deal. It's a lot more money at $30 (around £21, AU$39) per month, but you can issue as many invoices as you like, and there's a capable payroll system for some locations, with time and attendance tracking for up to five employees (free for three months and then £5 per month).
One disappointment is the shortage of support for multiple currencies, which only arrives if you sign up for Xero Premium ($70 per month – that's around £50, AU$90).
Xero offers plenty of functionality, including a handy "convert your QuickBooks files" service to help you get started, and it's certainly easy to use. But if you don't quite need all that power, there's better value to be had elsewhere.
Sage Business Cloud Accounting (formerly Sage One) makes a good first impression with its clear and straightforward pricing. The core Sage Accounting plan offers good value at just £10 (around $14, AU$18) per month (for the first three months, rising to double)
For this, you get modules to manage quotes, invoices, handle and submit VAT online, smart bank feeds and reconciliation, cash flow forecasting, some detailed reports, multiple currency support, project tracking and more, all available from your desktop or via a mobile app.
All this is well presented and generally easy-to-use. If you run into trouble, detailed web help and video tutorials are only a click or two away, with the offer of “free unlimited 24/7 telephone and email support” that should help make any newbie comfortable.
Sage also has a more basic offering called Accounting Start. This has no quotes or purchase invoicing, just core essentials like cost and income management, customer and supplier records and bank feeds, but it's only £3 per month (around $4.20, AU$5.50 – again for the first three months, rising to double) and could be enough for sole traders.
Getting started with an accounting package (or switching from one to another) can seem like an intimidating and complicated task, but KashFlow goes to unusual lengths to make it easy.
Support for importing data from QuickBooks, Sage or Excel gets you up to speed quickly. The interface is straightforward, there's no accounting jargon to catch you out, and there are various invoice and other templates which you can start using right away.
The program has plenty of functionality to explore, covering all the key areas you'd expect. You can manage customer and supplier details, record and automate purchases, create quotes and estimates, convert them to invoices as required, automatically import your bank transactions, and have the system automatically alert you of late payers, and even print out reminder letters for the worst offenders.
KashFlow is a UK business, which means plenty of benefits for UK-based users. The package doesn't just calculate VAT figures, for instance – it produces VAT Returns and EC Sales lists, and can file them directly to HMRC from within the program.
KashFlow's £7 (around $10, AU$13) per month Starter account has some big restrictions – namely a maximum of 10 invoices and 25 banking transactions per month, in a single currency only – but otherwise seems very capable to us.
We think most people will prefer the £14 (around $20, AU$26) per month Business account, which removes the invoice limits and can integrate with 85+ other systems and services (WorldPay, PayPal, stripe, GearShift, Dropbox and more). Alternatively, spending £19 (around $27, AU$35) per month gets you a capable payroll system for up to five employees.
While Kashoo’s price is a little higher than some of the other recommended offerings on this page – it starts from $16.65 (around £12, AU$22) per month – when it comes to features, the argument can be made that you get what you pay for.
For example, Kashoo shines when it comes to multi-currency support, an important feature for today’s global economy. It also supports credit card transactions for all the major carriers – Amex, Visa and Mastercard – at a competitive 2.9% plus 0.30 cents transaction fee.
You also benefit from unlimited invoices and connections to over 5,000 financial institutions to reconcile accounts online. We liked the uncluttered interface of this product, and the dashboard that provides a good summary of your current financial situation at a glance.
Kashoo also offers customer support across the gamut of email, phone, live chat and social media – this company will even respond to an old-fashioned letter! One current shortcoming to note, however, is that there is only a mobile app for iOS, leaving Android users out in the cold for the time being. Kashoo offers a 14-day trial for those looking to test the service out.