Accounting Software

Do any of my readers run a small business? Can anyone recommend an accounting software which either allows you to do your tax returns and financial reporting yourself, or keeps track of everything such that you can hand it to an accountant?

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25 thoughts on “Accounting Software

  1. You might want to check out Mamut Software’s Account Edge:

    I’ve been using it for about 5 years and it does everything I need it to do. Takes a bit of time to set up the account’s list and VAT options and Quote/Invoice templates but once that’s done it’s a great bit of kit. Has multi-currency and payroll options as well.

  2. Would depend on the type of business, but we’re a tiny consultancy (in the UK) and use – good for time tracking, invoicing etc and does tax calculations (wouldn’t deal with stock etc so well if you’re thinking of selling widgets). We do still get a accountant to do our annual returns but he can do a minimal job pretty cheaply (it’s mostly checking the calculations for peace of mind).
    I’d recommend testing the free trials of a few packages though. I tested Xero as well: lots of people like it but I couldn’t get on with it.

  3. There’s quite a few options out there.

    I use quickbooks and I’m very happy with it, but I can’t pretend I’ve done an exhaustive survey of the alternatives. It’s easy to use, support has been ok and it has a wide base of support amongst accountants, which is also important.

    Xero also seems to be popular and widely supported.

    You should probably only go for a product that is on top of HMRC’s Making Tax Digital program (there are over 100 supposedly, so it’s not restrictive). Even if you aren’t registering for VAT, it’s only going to go more in that direction over time and you need to work with a company that will invest to keep pace.

    I do book-keeping, VAT and run a one-person payroll quite happily from quickbooks. I could probably get micro-company accounts done myself as well – I understand the basics of accounting – although I have an accountant do that and I’d need a bit more training to understand the U.K. formats and a few quirks.

    But corporate income tax means you are still likely to need an accountant. The form is pointlessly complicated – lots of jargon about schemes that probably will never apply but you need to know what it all means – and the stakes are arguably higher.

    So you can (and probably should) ask for the advice of the small business accountant you intend to work with. Most of them work with 2-4 of the systems on the market.

  4. I’m an idiot and I managed to figure out MYOB. Lots of people rave about Xero.

    Really, there’s gonna be a bunch of programs that’ll work for you. I would second Oblong’s advice: see what your accountant recommends. He’s charging by the hour, so it’ll save you money to cut down on the time he spends doing data entry, futzing about with the formats, etc, etc

  5. I use GnuCash which is a free Open Source accounting package. It provides proper double-entry book-keeping, but obviously doesn’t provide services such as HMRC upload for “Making Tax Digital” if you are registered for VAT.

    Even if you don’t use it for your business accounts you should consider it for your personal (home) accounts.

  6. Based on what I think you’ll need it for, I’d recommend a niche product called Excel by a precocious little startup called Microsoft.

    Have a tab to cut and paste your bank and credit card statements and to manually add any expenses not on those. Reference lists using drop down menus on another tab to maintain the categories of expense and income.

    If you want to be really fancy, have a third tab that summarises the costs, income, tax, salary and pension amounts.

    Works fine assuming you’re not flogging FMCG at a thousand units a second.

    I’ll email you mine later this week. Royalty free but you’re buying dinner next time we meet.

  7. Depends what you will be doing, am assuming here we are talking about ltd company accounts. I use three different software packages for the various tasks –

    An old version of Sage for bookkeeping, I find it a bit clunky and keep meaning to check out Quickbooks or Freeagent

    An accounts preparation add-on for Excel (VT Accounts) which lets me generate final accounts in iXBRL format for submission to HMRC (Corporation Tax return). You won’t need this if your accounts are simple enough for the HMRC online tool to cope with or you are having an accountant submit your CT return

    A Corporation Tax package (TaxCalc) that calculates CT and submits the CT600 and CT computations to HRMC, along with the accounts iXBRL generated previously. I’ve found this to be decent software and TaxCalc do other products for individual tax etc. I also found their customer service to be very good when I needed it. Again you won’t need this if your accountant is submitting your CT return. HMRC used to let you submit a CT600 with their online tool but I’m not sure if this is still the case.

    For Companies House annual accounts I just use their online tool as I find that simplest.

    For VAT I submit manually using the HMRC website as we are not in scope for Making Tax Digital. If you are in scope and your bookkeeping software can’t submit VAT returns you would need something like TaxCalc VAT Filer

    I had a look a while back for a single package that combines all of the above but couldn’t find anything, not saying it doesn’t exist though.

  8. I second the Ockham’s Razor method. If you have just a few customers and expenses paid as you go, there is no need for more that a way of providing a summary of the transactions for your accountant to review and mangle into the officially sanctioned forms. It will save you money and your accountant’s time if you make things tidier than a shoe-box full of bills at the end of the year. But anything more than a spreadsheet summary will just confuse you and be useless to the accountant.

  9. Quickbooks. The only bad part of the software is the VAT module which you can easily bypass. Nobody makes good payroll software. I use my own quick and dirty software for that. I currently use about ten different accounting packages including some heavyweights and Quickbooks is my choice.

  10. Try Wave.
    Free. Good enough for my one-person show, with up to half a dozen invoices a month. Records expenses and issues invoices, has a simple GL. Seems to be funded by a skim if you choose to take credit card payments.

  11. Just for bookkeeping and creation of annual (or daily!) P&L accouns and Balance Sheets (but not automatic filing with HMRC under the MTD crapola) – I’d recommend LedgerLite from Responsive Software at
    I’ve used their predecessor free program “Ledger” (no longer provided) for the past dozen or so years with nil complaints. Mind you, I do my own accounts before letting my accountant weave his financial magic so might be tolerant of any shortcomings – except I don’t think there are any.

  12. Xero is a scam. Looks pretty and all, but most of the cool functionality is provided by 3rd parties, so you keep having to pay for upgrades to get it working really well. Kinda like an App Store business model.

    But it is pretty, so there’s that. Use Quickbooks,

  13. I used Gnucash when I was self-employed. As I’m odd & avoid Windows except when I really can’t, Gnucash was Hobson’s Choice, really. It’s easier to set up for double entry bookkeeping than a spreadsheet & does the usual reports, but as noted, no integration with HMRC or accountants. But I’m an engineer so that didn’t bother me. If I had been running anything more corporate than that it would have been a whole different ballgame, I’m sure.

  14. After 20+ years of various flavours of Sage, we’ve just moved to QuickBooks Online, which is subscription (boo!) but better in almost every way. And the accountant can just log into it directly, so can do stuff like opening balance corrections, etc, without me having to mess around entering a load of journals. Live import of transactions from all the bank accounts is fantastic.
    If you use one of Sage, QB or Xero then you’ll be fine with any UK accountant.

  15. Wow! Think about all the thousands of man-hours small businesses are using to find ways to deal with their tax obligations! Think about how much innovation the people running those companies could be contributing if they did not have to waste time with excessively complicated taxes. Think about how many people look into starting their own business, and then decide not to do it because they can’t endure the bureaucracy — or decide to do the business under the table instead.

    Yet in the calculation of GNP, time & resources wasted on taxes counts as a positive. We really have screwed ourselves up.

  16. @Gavin,

    Yes, the overhead in time can be a real pain. I’ve simplified my method over the years to the point where I can create the quarterly records for the accountant in about 30 minutes but that’s through a lot of practice. When I started out it could take an entire evening.

    Then there’s the tax and other liabilities one has to pay. I agree with Kerry Packer on paying tax; if the idiots in parliament looked like they were spending it competently, I wouldn’t mind so much. Happily, I’m not currently paying for the three year process to avoid Brexit. I imagine I’d be tempted to submit highly-fraudulent records to thoroughly minimise my contribution to that if I was a UK taxpayer.

  17. Nothing says “interesting man of the world” more than using Easter to blogging a discussion about accountancy software.

    Is this a test or something? Sort of like “What’s the most amazing pickup line you’ve ever heard used?”,
    “What’s the dullest snorefest of a holiday blogpost you’ve ever pulled on your readers?”

    This is top work!

  18. Whatever software you decide upon, the wise man installs two copies & runs them on separate computers 😉

  19. Thanks for the suggestions everyone, they’re most useful. Now I need to spend time exploring each.

  20. Nothing says “interesting man of the world” more than using Easter to blogging a discussion about accountancy software.

    I didn’t even realise it was Easter, although I suppose that’s why my school is closed for two weeks. I’m too busy trying to figure out how I can make a living over the next 20-30 years, plus finishing my course and blogging.

  21. Use your MBA knowledge and open a disruptor brothel

    bis might be interested in being Marketing & HR director

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