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Top 5 Accounting Software for Contractors

GoCardless
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Last editedAug 20223 min read

There is a huge variety of accounting software products out there, which can make it difficult to choose the best one for your contracting business.

To make that decision easier for you, we’ve compiled a list of the best accounting software for contractors on the market today. Plus, we’ve also snuck in a quick guide on what to look for when making your choice.

Accounting software for contractors: what to look for

The essentials for accounting software include: invoice generation, profit and loss charts, and functions for identifying debtors and creditors.

However, there are some additional features you may want to look out for. These include:

  • VAT calculation - If you are registered for VAT, it will be very useful to opt for a software that can calculate VAT and produce VAT returns. Some software also offer features for sending VAT returns straight to HMRC which can make things even more efficient.

  • Payroll accounting - If you’re a contractor with employees, you may require payroll features which allow you to calculate employee wages, generate payslips and even make national insurance deductions. Some software can submit payslips to HMRC automatically, further streamlining payroll.

  • Budgeting and forecasting - It may be useful to choose a software that can use data from one financial year in order to make a budget and forecasts for the coming year. This can help you stay on top of your finances as a whole.

  • Fixed asset management - Another important feature is audit history and records and options to calculate depreciation on fixed assets.

How to compare the best accounting software for contractors

When comparing accounting software solutions, the features they offer are only one of the key aspects to consider. Some additional considerations are outlined below:

Price

Affordability as well as value for money are of course other important considerations. Most service providers offer a free trial for up to 30 days. This allows you to try out the software before deciding whether you want to begin paying for it or not. Sometimes it can be worth trying out a few different providers before choosing on one that works best for you.

Note that most software providers charge a monthly or yearly fee, although some may work on consumption-based pricing models. This means you pay for the amount of features you use. Some take payment through a combination of subscription fees and user consumption.

Integration

Another important consideration is how well the software integrates with any other software, applications and services you use in your business. GoCardless integrates seamlessly with all the top accounting software recommended below.

Cloud-based

You should also decide whether you want to go with a cloud-based software, which can be accessed from any device with internet, or a PC/Mac-based software which can only be accessed on the desktop or laptop where it has been installed.

Naturally, the advantage of cloud-based software is that they allow for far more flexible and convenient access.

5 best accounting software for contractors

Now that you have a clear idea of what features to look for in your software, let’s delve into the top 5  best online accounting software for contractors.

1. Xero

One of the best known and most reputable providers, Xero offers a range of accounting features relevant to contractors, including payroll, invoicing, inventory and expenses services. It also has a function for importing data from business bank accounts, credits cards and even PayPal. Prices start at £12 for the starter pack to £33 for the premium package.

2. QuickBooks

QuickBooks is one of the original pioneers of accounting software, and is still going strong today. With several packages suitable to contractors, the software offers features for payroll, VAT monitoring and reporting tools. Prices start at £3.60/month for the first 3 months, then £12/month for the simple plan.

3. Sage

Sage is an all-inclusive accounting package that comes with all the necessary features for contractors, including payroll, invoice management and cash flow forecasts. At the time of writing, Sage is offering the first 3 months free for new customers for all plans, with the starter plan prices at £12/month thereafter.

4. Zoho

Tailored to small businesses, Zoho is an ideal piece of accounting software for accountants. It comes with a range of packages, starting from a free package all the way to the professional plan at £199/monthly.

5. FreeAgent

FreeAgent is a great choice for contractors who prefer a simple software that’s easy to navigate and comes with great customer support. Prices vary depending on whether you operate as a sole trader or a limited company. For sole traders, plans start at £9.50/month for the first 6 months and £19/month after that. Meanwhile, for limited companies, plans start at £14.50/month for the first 6 months and £29/month after that.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.

Article Sources

1.   https://www.xero.com/uk/pricing-plans/ 

2.   https://quickbooks.intuit.com/uk/pricing/ 

3.   https://www.sage.com/en-gb/sage-business-cloud/accounting/pricing/ 

4.   https://www.zoho.com/uk/subscriptions/pricing/ 

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