If you are in business, you must be constantly aware of how much money you've earned, or how much you've spent. You will want to know the finances of your business at all times. So, at some point, you might need to invest in a piece of software that will help you manage your business. But which one should it be? I’m here to help you through the jargon of cloud accounting, so you can find the best fit for you. If you don’t know what Cloud Accounting Software is then check out our last blog giving you all the details.
Xero
Xero is one of the most popular Cloud accounting software packages in the United Kingdom, as well as being used in 180 countries around the world. It is aimed at small businesses and is one of the easiest and most user-friendly software applications on the market. Xero can help with invoicing, inventory, bank reconciliation, payroll, expenses, VAT Returns, CIS and many more.
Choosing the right package for you
Starter Package
£12 plus VAT per month.
This package is designed for sole traders and new businesses and has limitations on the number of transactions you can post each month. You can post 20 sales invoices and quotes, and 5 bills each month. You can submit VAT Returns using this package, so would be ideal for very small businesses with minimal outgoings.
Standard Package
£26 plus VAT per month.
This package is the most popular package that Xero offer and is used by most of our Xero clients here at Crouchers. There are no limitations on the number of transactions you can post each month. You are not able to use multiple currencies but this is not usually a requirement for small businesses. You can submit VAT Returns, calculate CIS Returns, reconcile your bank accounts, and it has just about everything you need.
Premium Package
£33 plus VAT per month.
This package has everything from the standard package, plus the use of multi currencies and is perfect for small businesses that trade with foreign countries or have bank accounts in different currencies.
Ultimate Package
£49 plus VAT per month.
This is the largest package that Xero provide. You have everything from the premium package, plus payroll for up to 10 people, expenses and projects for up to 5 people, and advanced insights with Analytics Plus. This package is designed for more complex small businesses that want to get the best from their accounting software.
How does Xero do?
Xero also offers the opportunity to purchase additional add-ons that can help assist with the day to day running of the business. These include Payroll, Expense Claims, Projects, CIS Returns, Analytics and Xero Pay and can be added to a subscription at any time.
Pros
- Easy to use
- Mobile app
- Integration with supporting apps
- Easy setup of bank feeds
- Unlimited users
Cons
- Poor customer service
- Limited reporting
- Some aspects of the software are very basic
Xero are always looking to improve their software and are constantly bringing out new features to help them do this. There are quarterly update webinars that you can attend which give a brief overview of any new features within the software and how these will help your business to grow.
QuickBooks Online
QuickBooks were one of the first companies to develop Cloud accounting software. QuickBooks packages are similar to Xero and developed with small and medium sized businesses in mind.
Choosing the right package for you
Self Employed
£8 plus VAT per month.
Designed for sole traders who are not VAT Registered and need to prepare a Self-Assessment tax return. With this package you can manage your income and expenses, import your bank transactions automatically, and most importantly prepare your Self-Assessment Tax Return.
Simple Start
£12 plus VAT per month.
This is designed for small businesses who need to submit VAT Returns. You cannot manage bills on this package so it is not ideal for businesses with lots of suppliers. Additional features include the submission of CIS Returns and the ability to create estimates and quotes.
Essentials
£22 plus VAT per month.
This package is like the Standard package that Xero offer and is the most popular package. It has all the same features as the Simple Start package but also allows businesses to manage their supplier bills, and deal with multi-currency transactions. You can also have up to 3 users with access so it is great if there is more than one business owner that needs to access business information.
Plus
£32 plus VAT per month.
This is the largest package that QuickBooks offer and is great for businesses that need to manage projects and stock and are growing rapidly. You get all the same features of the Essentials package, plus the ability to manage stock and projects, set smart budgets, and you can add up to 5 users at one time.
How does QuickBooks do?
QuickBooks also offer users the chance to add payroll as an additional add on, which is great for businesses that want to manage their own payroll.
Pros
- Mobile app
- Easy setup of bank feeds
- Ability to customise reports
- Good customer support
- User-friendly dashboard
Cons
- Limited users
- More complex than other Cloud accounting software
Like Xero, Quickbooks are always looking to improve their software to adapt to business needs. You will be notified when logging in of any new features within the software and shown how to use these features to suit your business needs.
Sage Business Cloud
Sage is one of the biggest accounting software companies in the world and offers both desktop and Cloud accounting software packages. The desktop side of Sage is much larger than the cloud side and has taken Sage a lot longer to catch up with the likes of Xero, FreeAgent and QuickBooks in terms of their Cloud accounting software. Sage Business Cloud is aimed at small and medium sized businesses.
Choosing the right package for you
Start
£12 plus VAT per month
This plan is designed for small businesses who are VAT Registered, only require one user, and do not need to manage purchase invoices. You can create and send sales invoices and can set up bank feeds to help with bank reconciliation.
Standard
£26 plus VAT per month
This package is similar to the Standard and Essentials packages on Xero and QuickBooks and is the most popular package that Sage offer. It has all the main features expected with Cloud accounting software, including unlimited users and reports, but does not have the ability to manage inventory, or use multi-currency banking and invoicing.
Plus
£33 plus VAT per month
This package includes everything from the Standard package, but also includes Multi currency banking and invoicing, and the ability to manage inventory. This is ideal for businesses that deal with stock, and that trade with foreign countries.
How does Sage do?
Pros
- In-depth reporting
- Mobile app
- Can forecast cash flow
- Easy to integrate with supporting apps
- Strong inventory tracking
- Easy to transfer from Sage Desktop to Cloud
Cons
- The Standard package is more expensive than similar versions of other software
- No payroll add-on
- More difficult to use than other software
Sage is always looking to improve their Cloud accounting software and after falling behind Xero and QuickBooks at the start, have finally caught up in terms of the features they can now provide their users. Just like the other software companies they are often bringing out new features to help them gain an advantage over their competitors.
FreeAgent
FreeAgent is a small Cloud accounting software company founded in 2007 that helps over 100,000 small businesses. FreeAgent offers similar services to all other Cloud accounting software and can even help with Self-Assessment filing and Accounts and Corporation Tax Return filing for Limited companies.
Choosing the right package for you
Limited Company
£29 plus VAT per month
As it says on the tin, this package is designed for Limited Companies. This gives you full access to the software, without any limitations. If you choose to sign up annually this will save you £58 plus VAT per year.
Partnerships & LLP
£24 plus VAT per month
This package is designed for Partnerships and LLP’s. You get full access to the software. However, you do not get access to filing Accounts and Corporation Tax, as this is for Limited companies. If you choose to sign up annually you will save £48 plus VAT per year.
Sole Trader
£19 plus VAT per month
This package is for Sole Traders. This gives you full access to the software without the need to submit Accounts and Corporation Tax. If you sign up annually you will save £38 plus VAT per year.
How does FreeAgent do?
If you have a business current account with NatWest, Royal Bank of Scotland, Ulster Bank NI, or Mettle then you will receive free access of FreeAgent for as long as you retain your bank account.
Pros
- Free access if you bank with NatWest, Royal Bank of Scotland, Ulster Bank NI or Mettle
- User friendly
- Mobile app
- Ability to track expenses
- Can submit Final Accounts and Corporation Tax
Cons
- No basic subscription levels
- More expensive than similar packages from other software providers
- Some aspects of the software are very basic
FreeAgent is always looking for ways to improve and an example of this is the introduction of their new pricing package which is ‘coming soon’. This is a package designed for landlords to be able to manage their property finances and be ready for when Making Tax Digital arrives for Income Tax in 2024. This is something that none of the other Cloud accounting software companies are yet to announce.
Let's sum up
We get it. You want to know what the best cloud accounting software is.
But… there isn’t a best one! It depends on your business and its needs, and that’s why Crouchers are here. We have experience using all kinds of different software and have advisors that are certified and fully trained using Xero, QuickBooks, Sage and FreeAgent. Over the past 10 years we have helped move hundreds of businesses to new Cloud accounting software, so have experience setting up and training our clients on how to get the best from their new software. Get in touch and we can help you make the move!