Choosing the right accounting package for your small business

Managing a small business comes with lots of challenges. From tracking revenue from sales to managing expenses, the financial side can quickly become overwhelming. That’s why it’s essential to choose the right accounting package for your business. In this article, we’ll explore the most popular accounting packages available for small businesses in the UK, as well as the benefits of using an accounting package and what to look out for when selecting the best option.

Why every small business needs an accounting package?

Running a small business often means managing finances manually, leading to countless hours spent chasing and reconciling payments.

An accounting package goes beyond simple bookkeeping. It's a powerful tool designed to automate manual tasks, track income and expenses, manage invoicing, and simplify payroll. This automation doesn't just save time — it provides real-time financial visibility, empowering you to make smarter business decisions and makes sure you're always prepared for tax obligations. For accountants and bookkeepers in particular, these tools simplify the invoice and Direct Debit set-up process, freeing up more time to give strategic advice to clients.

Focus on your business needs

The reason why you use an accounting package depends entirely on your specific business needs, but some features stand out for most small businesses. 

Look out for user-friendly dashboards, customisable invoicing tools, and strong reporting capabilities that offer visibility of your profit and loss, EBITDA, and cash flow.

You’ll also need to consider integration capabilities. The best accounting software works easily with other tools you use daily, especially your payment systems. Meaning automatic reconciliation of transactions, fewer manual errors, and a real-time picture of your finances. This is particularly important for businesses with niche needs, such as:

• Builders and construction firms that need detailed project-based tracking. 

• Gyms and personal trainers that manage sign ups and recurring memberships with varied payment schedules.

• Landlords that need to manage multiple properties and rental income in one platform. By focusing on these features, you’re more likely to end up with a package that truly supports your business, both now and in the future.

Popular accounting packages for small businesses

Accounting packages for small businesses vary depending on a number of factors, but let’s get started with a few examples from the UK market. Many of these accounting solutions are used by entrepreneurs, sole traders, and small firms. While each has its unique strengths, their main goal is to simplify financial management.

Here’s a list of some of the accounting package providers in the UK:

• FreeAgent is a popular choice for businesses on the smaller side (such as microbusinesses or freelancers) with good options for tax return submissions directly from the platform (self-assessment, VAT, Companies House). 

• QuickBooks offers convenient mobile features, enabling users to effortlessly upload photos of receipts and invoices for streamlined expense and bill management.

• Sage provides various solutions, from desktop software to cloud-based options, catering to diverse business needs from small businesses to large-scale enterprises. 

• Xero is one of the most popular choices among small businesses. It has a user-friendly interface offering real-time data insights as well as a high number of integration options.

These are just some of the accounting packages available on the market in the UK. You can find an extended list of those that integrate with GoCardless in this article. Choosing any of them should help you manage your small business finances easily.

Top five things to consider when choosing an accounting package

Next, you’ll need to determine the features that are non-negotiable for the accounting package of your choice. Here are the top five factors to consider:

1. Cost: Beyond the monthly subscription fee, consider any set-up costs, add-on features, or potential charges for extra users. Look for transparent pricing that fits your budget.

2. Features: Prioritise the core functionalities your business really needs. Do you require inventory management, time tracking, multi-currency support, or advanced payroll features? Don't pay for what you won't use.

3. The learning curve: How intuitive is the interface? Will you and your team be able to quickly grasp the system, or will it require extensive training? Choose a package that minimises disruption.

4. Integration capabilities: This is vital for streamlining your operations. Make sure the software integrates seamlessly with your bank accounts, CRM, and, critically, your preferred payment processing provider like GoCardless.

5. Scalability: Will the software support your business as it grows? Look for a package that can handle increasing transaction volumes, additional users, and evolving reporting needs without requiring a disruptive system overhaul later on.

Choosing software that matches the nuances of your specific industry and offers relevant integrations will keep things simple for you.

Choose the right accounting package for your small business

Choosing the right accounting package for your small business is about more than just managing numbers. It's making sure your business is maximising efficiency and has a strong foundation for sustainable growth. By focusing on integration, ease of use, and the specific needs of your business, you can transform your financial management from a chore into an advantage. Don’t forget, GoCardless connects with multiple well-known accounting packages to help simplify your payment admin.