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Online small business accounting and bookkeeping

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Last editedApr 20233 min read

As a small business owner, it’s easy to neglect the importance of accounting and bookkeeping as you build your business. But implementing water-tight bookkeeping processes early in your company’s lifetime can pay off further down the line. Find out a little more about online small business accounting, including our rundown of online small business software for bookkeeping and accounting, with our comprehensive guide.

Online small business accounting/bookkeeping explained

First off, let’s define our terms.

Accounting refers to the section of your business that analyses your financial transactions, helping you to understand operational expenses, depreciation, profit margin, and so on. Furthermore, your accounting division can also help to prepare financial documents such as the cash flow statement, balance sheet, and the profit and loss statement.

By contrast, bookkeeping is all about keeping a record of your transactions. Your bookkeeping team will record invoices and payments, collecting all of your financial information and recording it chronologically. To put it another way, bookkeeping provides the raw material that your accountants need to do their job to the best of their ability.

As you can see, bookkeeping and accounting go hand in hand. Because accounting and bookkeeping is such a critical element of your business, covering all sorts of activities from accounts receivable and bank reconciliation to paying suppliers and handling payroll, it’s vital to optimise the process wherever possible. That’s where online small business accounting and bookkeeping software comes in.

Online small business software for accounting and bookkeeping

There are many different online small business software platforms for accounting and bookkeeping that small business owners can use to handle their firm’s accounting function. These software packages are often geared towards small-business owners, making them intuitive and easy to use. Plus, they’re cloud accounting platforms, meaning that you can access your accounts from anywhere. Here’s a rundown of some of the most popular options (all of which offer software integrations with GoCardless):

  • Xero – Xero’s online small business accounting software can help you automate key tasks like invoice chasing, bank reconciliation, payroll, and more.

  • QuickBooks – A cloud-based online small business bookkeeping and accounting software, QuickBooks provides support for a broad range of accounting activities, including payroll, invoices, managing VAT, and Self Assessment.

  • Kashflow – Aimed at small-business owners, Kashflow offers an online small business accounting platform that helps with bookkeeping, payroll, and healthcare.

  • Sage – Sage offers an online bookkeeping for small business platform that provides help for managing accounting, payroll, human resources, and more.

Handling online small business tax filing

After you set up a small business, you’ll also need to start thinking about your various tax deadlines. VAT, Corporation Tax, PAYE, and Self Assessment should all be taken into consideration. Firstly, you’ll have to ensure that you’re registered for these taxes, otherwise you could end up paying too late and be hit with fines and penalties, which isn’t the ideal way to baptize your small business. Once you’ve registered (information on doing this can be found on, you’ll need to actually manage the tax filing process. Many businesses use online small business tax filing software to do this. There are a broad range of options, some of which we mentioned in the previous section of the article.

Setting up an online small business bank account

Aside from online small business bookkeeping, accounting, and tax filing, it’s also worth setting up a business bank account. Registering for an online small business bank account – rather than using your personal account, which is only legal if you’re a sole trader, freelancer, contractor, or gig worker – can provide your business with a broad range of benefits.

For a start, investors and banks may be reluctant to loan money to businesses operating with a personal bank account. It’s also important to remember that sole traders may be able to claim running costs as expenses, reducing the overall amount of tax they’re required to pay. However, this may be more difficult with a personal account, which makes it a good idea to set up an online small business bank account.

GoCardless and online small business accounting

Payments collection is an area of your business’s finances that has an enormous effect on cash flow. As such, it benefits from automation, which speeds up the payments process and ensures you get paid as quickly as possible. Adding GoCardless – a Direct Debit solution that integrates with a wide range of accounting platforms – enables you to automate payment collections, provide your clients with an effective payments option, and generate a positive cash flow.

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.

Found this article interesting? Take a look at our guide to tracking expenses for small businesses

Over 85,000 businesses use GoCardless to get paid on time. Learn more about how you can improve payment processing at your business today.

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Interested in automating the way you get paid? GoCardless can help
Interested in automating the way you get paid? GoCardless can help

Interested in automating the way you get paid? GoCardless can help

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