Medium-sized business owners are in a vulnerable position in that they are growing but are still in need of help so that they don’t stagnate.

But these firms aren’t necessarily dealing with the accounting processes they once knew. HMRC is in the process of rolling out making tax digital (MTD), meaning that many business owners have had to change the way they do their accounting.

The problem is that a lot of accounting software providers gear their products towards small businesses, sole traders and/or freelancer. As the owner of medium sized business, that leaves it up to you to sift through the figures and cast your own judgements.

To help you decide, we’ve looked at the best UK mid-sized business accounting software packages on the market.

Best UK medium sized business accounting software

Every business is different. Most smaller businesses can make do with basic functions like invoicing, bank reconciliation, income and expense tracking and financial report generation. However, some slighter bigger businesses might need more.

Indeed, most UK small business accounting software offers the same features, it’s just that you may feel more comfortable with how one is designed over another – and then of course, there’s the cost.

Best accounting software for UK medium sized businesses

First, make a list of what you need to do in terms of bookkeeping and accounting.

• Do you need to track inventory and purchase ordering?
• Do you need to invoice payment deadlines?
• Do you need foreign currency transactions?
• Do foreign currency transactions convert to sterling?
• How many users will need to use the accounting software?

How much can you afford?

Although there are free options available, when it comes to UK business accounting software – and especially something as sensitive as financial information – it’s probably wise to pay for a package. Back in the 1970s, the US television industry coined the phrase, “If you’re not paying for the product, you are the product.” These days that means that the software provider sells on your data. Keep that in mind when doing your search.

The other change that has happened is the rise of monthly subscription as opposed to a one-off software licence. On the plus side, Software-as-a-Service (SaaS) means your tech is always up to date. The downside is that, as the months roll on, you eventually end up paying more than if you’d bought a one-off licence.

4 questions you need to ask your accounting software supplier

• How do you back up data?
• Tell me about customer support. What are your hours and how quickly should I expect a response if I raise an issue?
• Can you tell me about a similar client who’s signed up to your software?
• Does your platform support foreign currency payments and convert them into sterling?

Pick an accounting software solution that will grow with you

Don’t be tempted to buy the most basic licence only to find you’ve outgrown what’s provided within a year. Ask your would-be supplier to explain how its accounting software can scale with your growing business.

Sage Accounting – best for businesses who want easy functionality

Overview:

Sage’s cloud-based accounting platform offers everything a growing business needs to stay on top of its finances, streamline operations and remain compliant. Features include core financials, reporting, billing, project accounting and time and expense management.

Features it offers include:

• General ledger
• Purchasing
• Order management
• Multi-currency support
• Accounts payable
• Accounts receivable

Pros:

• The software is intuitive
• Reviewers rate the reporting function
• Easy to process transactions
• Strong integration capabilities

Cons:

• Complicated dashboard
• On the more expensive side
• Can struggle with large amounts of data

Price (excluding VAT):

• Start for sole traders and microbusinesses: Free for three months then £18 per month. One Copilot user included
• Standard: Free for three months then £39 per month. One Copilot user plus 30 AI-captured receipts and invoices included (20p per additional capture).
• Plus: Free for three months then £59 per month. One Copilot user plus 100 AI-captured receipts and invoices included (20p per additional capture).

Mobile: iOS, Android

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QuickBooks – best for app integration

Overview:

QuickBooks is geared at sole traders but also has packages for limited companies and their accountants.

Nifty features include a client portal, where customers can view, print and pay invoices and you can get your accountant involved by letting them review your books and give you up-to-date advice. There’s also a free 45-minute onboarding session from QuickBooks to get you started.

Pros:

• QuickBooks’ user experience (UX) is easy to understand
• Integrates with over 750 business apps including PayPal, GoCardless and Mailchimp
• Professional accountants rate the professionalism of QuickBooks’ reports and its bank reconciliation features

Cons:

• Limited functionality for larger businesses
• Reviewers report issues with connecting bank accounts
• There have been complaints that QuickBooks Online is buggy with difficulty accessing customer support

Price (excluding VAT):

QuickBooks is currently offering a 90 per cent discount for the first six months.

• Simple Start – £1.60/month (then £16): Adds VAT submissions, CIS returns, and accountant access
• Essentials – £3.80/month (then £38): Multi-user, bills, time tracking, multi-currency
• Plus – £5.60/month (then £56): Stock tracking, project profitability, budgeting
• Advanced – £12.30/month (then £123): Up to 25 users, automation, batch invoicing, advanced reporting

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Xero – best for larger SMEs with multiple users

Overview:

Like FreeAgent and QuickBooks, Xero offers the following as standard:

• Connects straight to your bank account enabling automatic reconciliation
• Generates quotes and invoices that customers can pay online
• Manages purchase orders, bills and supplier payments digitally
• Helps track stock
• Keeps your account up to date as you buy and sell
• Customisable reports
• Range of apps in marketplace including Shopify, Stripe, PayPal and Square

However, you have to pay extra as bolt-ons if you want to do your payroll on Xero or enable staff to submit expenses, track expense claims.

Pros:

• Xero is popular with sales-oriented businesses that need basic stock management built in
• Good reviews for customer support

Cons:

• The Starter plan has limited functionality
• The drop-down menus on Xero can be a bit clunky
• Reviewer report flaws with reporting functions
• You must subscribe to the Premium tier if you want multicurrency transactions

Price (excluding VAT):

• Ignite: £1.60 per month for first six months, then £16 per month
• Grow: £3.70 per month for first six months, then £33 per month
• Comprehensive: £5 per month for first six months, then £50 per month
• Ultimate: £6.50 per month for first six months, then £65 per month

Mobile: iOS, Android

Read more

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