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Best accounting software for small business in 2020

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedNov 20203 min read

Small business owners need to keep a close eye on their company’s finances. While there are a broad range of reasons why businesses fail, ineffective accounting and bookkeeping is often top of the list. By investing in the right small business accounting software, you can stop your business from falling victim to financial mismanagement. Find out more about accounting packages for small business, right here. We’ve put together a list of some of the best accounting software for small business, so you can find a solution that suits your business down to the ground.

What are the benefits of accounting software for small businesses?

Is it the right time to invest in a new piece of equipment or real estate? What’s your projected cash flow for the upcoming year? Are you registered for Corporation Tax? How long will it be before the business breaks even? How profitable is your business anyway?

Finding the right small business bookkeeping software can help you answer all of these questions, and more. Accounting and bookkeeping is a complex and time-consuming area of business. From simple tasks like paying bills and tracking revenue to more complex questions about the future of your company, there’s an enormous amount of ground to cover, and as the owner of a small business or start-up, you’ve probably got other things on your plate.

In addition, accounting packages for small business are more efficient than traditional bookkeeping methods that rely on manual accounting processes. By automating a whole host of accounting tasks – from preparing financial documents and running bank reconciliation to chasing/paying invoices and calculating depreciation – you can save an enormous amount of time and money, leaving your team to focus on more value-added tasks.

Furthermore, there are legal reasons why it may make sense to invest in small business accounting software. Since the introduction of Making Tax Digital (MTD) back in 2019, the government has stipulated that businesses which are enrolled in the initiative need to use MTD-compatible software to submit VAT returns. Consequently, using small business bookkeeping software may be a necessity, rather than a preference, for businesses over a certain size (£85,000+ annual turnover).

2020 guide: best small business accounting software in the UK

Clearly, the benefits of accounting software for small businesses are extensive, so it makes sense to invest in a package that works for your business. Whether you need an entry-level financial management tool or a fully featured accounting software package, here are some of the best options for small business accounting software in 2020:

Xero – Xero is a cloud-first accounting platform that offers over 600 integrations, helping businesses manage inventory, payroll, and invoicing from a single dashboard. With 24/7 live chat support and the ability to track time across specific projects, Xero is one of the best accounting packages for small business.

QuickBooks – QuickBooks is one of the most popular small business accounting software platforms in the world, offering an extensive array of features, add-ons, and integrations. Although it is relatively expensive, its depth, ease of use, and flexibility more than make up for the additional cost outlay.

Sage – Sage is a great choice of small business bookkeeping software for small to medium-size businesses, offering an extremely sophisticated set of financial tools and exceptional customisation options. For businesses that deal with a large number of products, it’s also especially strong in the area of inventory management.

Kashflow – Kashflow is a UK-based accounting and invoicing package for small businesses. It’s very easy to use and provides a broad range of bookkeeping features, including managed payroll, invoicing, and VAT returns.

FreeAgent – FreeAgent offers small business accounting software that’s specifically designed for small businesses and freelancers. It provides a broad range of accounting tools, with features covering project management, invoicing, expense management, and more.

Choosing the right accounting packages for small business

When considering the best accounting software for small business, one of the most important aspects to think about is compatibility. Can the software integrate effectively with your other accounting tools? Is it likely to introduce an additional level of complexity to your team’s internal processes? All the small business bookkeeping software solutions mentioned above fully integrate with GoCardless, so if you’re already using our automated solution for payment collections, you can simply plug it into your new accounting software and get to work.

We can help

GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.