The Best Small UK Business Accounting Software 2024
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Many types of accounting software exist. However, not all of them are for small businesses and new startups, and many apply to non-UK businesses. That’s why we don’t include tools such as Access, Oracle, or SAP in this article.
At Fusion Accountants, we’ve tested probably a dozen accounting tools in the 30 years we’ve been doing accounting. For UK small businesses, we recommend only working with the following three programs (in no particular order):
- FreeAgent
- Xero
- QuickBooks Online
However, which of the three should you choose?
In this article, we review each product’s features and provide an in-depth review.
The challenge of comparing accounting tools in 2024
The accounting software field has grown immensely competitive. Online accounting software providers constantly work to add features that match—and beat—their competitors. A few years ago, a clear line existed between QuickBooks Online, Xero, and FreeAgent. Today, that line has grown blurry, with each of the apps offering excellent essential features such as:
- Bank feeds
- Automatic reconciliation
- Invoice templates
- Online payments
- Bills management
- Out-of-pocket expense tracking
- Mileage tracker
- Cashflow functionality
- Integrated payroll
The largest gap exists between FreeAgent and the other two tools—Quickbooks and Xero—because FreeAgent was designed primarily for a DIY contractor accounting market whereas the other tools were created more for accountant-centric functions and for larger businesses. Still, Quickbooks and Xero provide a great DIY experience as well, and much of what differentiates one tool from the other depends on your specific purposes.
A quick summary of each tool
Quickbooks has been around for several years and has an excellent reputation in the desktop market. They’ve offered a cloud version of the tool for a while now and invested heavily in ensuring that they have a wide-ranging support network.
Xero started life as a fully cloud-based, subscription service and very rapidly gained a wide and loyal following. Many accountants recommend it as standard, even though the online software did not arrive in the UK until 2008. Some accountants believe that Xero led the way to push for SaaS-based accounting software.
FreeAgent has gained a lot of traction in recent years and is a popular choice for DIY entrepreneurs and small limited companies that want a simple bookkeeping tool with no fuss. It has always been a SaaS (Software as a Service) tool and is currently owned by the Royal Bank of Scotland which acquired FreeAgent in 2018.
Overall winners
Just because a tool might be lower ranked than another doesn’t mean it’s not the right one for you because some of the tools have specific needs that carry more weight depending on your company’s size and needs.
QuickBooks and Xero were closely matched, but we found that QuickBooks has better support than Xero, while Xero has more (and better) third-party integration capabilities.
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3.3 Stars (best for tiny businesses or sole proprietors) | 3.7 Stars (best for larger businesses) | 3.7 Stars (best for integrations) |
Round 1—Usability
Ask three different people about the usability of these three tools, and you’ll get three different answers. We’ve heard our accountants saying that they love Xero’s interface while others swear by QuickBooks.
The simple truth is that all of these companies have had to up their game and improve their user experience to stay competitive. Whereas QuickBooks and Xero have traditionally targeted the accounting sector and larger businesses, they can’t ignore the market that FreeAgent has been steadily taking over.
Repeated poor user experiences result in 80% of people switching to a different brand, according to research from ZenDesk. Although this figure might be less if you’re entrenched with one system, making it challenging to switch over, it does strongly affect new customer acquisition. If each of these accounting tools wants to continue expanding its market share, they must ensure an excellent user experience.
FreeAgent does the best job at making accounting appear “not scary” to newcomers. The company has designed its interface and experience in a way that users can get by intuitively, and even undo accounting actions easily, which sometimes isn’t always possible when you follow the strictest accounting rules.
QuickBooks and Xero are far more rigorous, which is a good thing because larger companies don’t have the luxury of making “minor changes” in their books that could be considered suspicious, thus drawing attention from HMRC.
As for the QuickBooks versus Xero experience, the best we can say is that they’re different, but not necessarily better. However, we feel that Xero has somewhat of a slight edge in this respect, providing a slightly more intuitive interface than QuickBooks.
If this guide was aimed at only small businesses, FreeAgent would get five stars. If it was aimed at only accountants and larger businesses, Xero and Quickbooks would both get five stars.
FreeAgent: 
Quickbooks: 
Xero: 
Round 2—Additional Features
This one is challenging to rate because each tool offers different features according to its primary target market. All three systems offer the core accounting features that all companies need. As for additional features, FreeAgent excels in time tracking if you’re a small enterprise, while QuickBooks and Xero excel at stock management—with Xero slightly better than QuickBooks in that respect.
If you’re a small enterprise, then FreeAgent’s additional features would probably be a five-star. However, pitted against the other two giants, it falls short.
QuickBooks gets a three-star because Xero’s stock management is more feature-packed.
FreeAgent is aimed at sole proprietors and smaller businesses, which is probably why the company created a dedicated time-tracking tool that you can use inside FreeAgent. The tool either logs time as you work, for the logged-in user, or allows you to log timesheets for different employees. You can also add as many users as you like in the Limited Company plan, allowing users to use the app to track their time.
FreeAgent does contain a rudimentary stock management feature. However, we feel it’s inadequate for any companies selling large quantities of stock.
QuickBooks doesn’t offer time tracking out of the box. However, if you’re using QuickBooks Online Payroll Premium or Elite you get QuickBooks Time included, which allows you to add timesheets and even collaborate on projects with team members.
The offering is more sophisticated than FreeAgent, with its collaboration features.
QuickBooks comes prebuilt with excellent stock and inventory support intended for larger organisations.
Xero is on par with QuickBooks in that time tracking is an additional feature which comes packaged with Xero Projects or Xero Payroll. If you’d like to give employees the ability to track time themselves on the mobile app, you’ll need Xero Projects. However, you’ll need to pay for each additional user.
FreeAgent: 
QuickBooks: 
Xero: 
Round 3—Support
FreeAgent’s claim to fame was that it opened the market to non-accountants and gave those people the opportunity to “do their own books.” Sure, they might make some mistakes (and occasionally a costly one, which is why it’s always best to have an accountant side-check your books). However, the cost of paying an accountant for an occasional side-check is often still more affordable than full-scale bookkeeping services. If you have a tiny business with only a handful of transactions, doing the bulk of your bookkeeping yourself might make sense.
FreeAgent creates a simple-to-use product, but also provides comprehensive and useful support aimed at beginners. In FreeAgent’s case, you can often ask an accounting question and obtain a comprehensive answer, which is then easy to implement because the interface was designed for non-professionals.
On the downside, FreeAgent doesn’t provide live chat support, and its email and phone support are limited to weekdays during working hours.
QuickBooks provides 24/7 live chat support and also phone support during business hours PST time.
Although QuickBooks offers easy-to-understand support, and its email responses are almost always comprehensive, its lack of 24/7 support knocks it down a star. Sometimes, those urgent matters just need to be handled.
Xero doesn’t offer live chat support and also provides no phone number on its website. However, you can ask for a customer rep to reach out to you directly.
Quickbooks and FreeAgent tie on this win, but for different reasons. If you’re a total accounting beginner, FreeAgent is better for support. If you prefer 24/7 support, go with QuickBooks.
FreeAgent: 
Quickbooks: 
Xero: 
Round 4—Connectivity and Integration
FreeAgent loses this race, offering far fewer bank and app integrations than the other two contenders. However, the banking integration issue is more of a problem for users outside the UK, as FreeAgent does connect with “most UK banks,” according to its help pages.
QuickBooks integrates with a wide variety of banks across the world and offers over 750 integrations with apps. Unfortunately, QuickBooks’ integrations tend to be more disorganised than Xero’s, and reviews for its ecommerce integrations—Shopify and A2X, specifically—indicate poor customer satisfaction.
Xero integrates with over 1,000 different apps and provides bank feeds for over 21,000 global financial institutions.
FreeAgent: 
Quickbooks: 
Xero: 
Round 5—Reporting
All three tools provide adequate financial and management reports to know where your business stands—P&L, balance sheet, cash flow, and so on.
FreeAgent’s reporting is more basic than Xero and QuickBooks, and its Cashflow report is hidden under the “Banking” menu item instead of the “Reporting” menu item. FreeAgent also doesn’t offer comprehensive reporting on payroll and management accounts.
Overall, Xero and QuickBooks’s reporting is somewhat on par, depending on who you ask, and FreeAgent does a decent job of giving you an overview of where your business stands.
FreeAgent: 
Quickbooks: 
Xero: 
Round 6—Pricing
All other factors being equal, the decision to buy often comes down to the price.
Many packages for each of these platforms exist, but we compare the basic pricing for Limited Liability Companies only.
Notes | Monthly Price | Annual Price | |
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![]() | Free for Royal Bank of Scotland, NatWest, and Ulster Bank customers for as long as you have an account with them. Also free for Mettle bank account owners so long as you make one transaction a month. | £33/month (£16.50 for the first six months) Includes payroll | £330/year (£165 for the first year) Includes payroll |
![]() | £28/month (50% of the first 6 months) + £8/month for payroll. Other packages exist, but this one is the most similar to what you get with FreeAgent. | No annual price. | |
![]() | Opaque pricing structure. | £47/month for the comprehensive plan, which only includes five people on the payroll and 10 bill payments. | No annual price. |
Xero has both the most expensive and the most complex of all the pricing models. It also offers no annual subscription.
QuickBooks’ pricing is less opaque but is more expensive on a monthly basis than FreeAgent when you add payroll. It also offers no annual subscription.
FreeAgent has the best pricing model of all three and even offers the software for free if you bank with Royal Bank of Scotland, NatWest, or Ulster Bank.
FreeAgent: 
QuickBooks: 
Xero: 
Which UK accounting software should you choose?
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Usability | ![]() | ![]() | ![]() |
Additional Features | ![]() | ![]() | ![]() |
Support | ![]() | ![]() | ![]() |
Connectivity and Integrations | ![]() | ![]() | ![]() |
Reporting | ![]() | ![]() | ![]() |
Pricing | ![]() | ![]() | ![]() |
Overall | 3.3 | 3.7 | 3.7 |
As we’ve mentioned, our rating is heavily influenced by use cases. Determining which tool to use depends very much on the size of your business and what you plan on using the accounting software for.
As a general guide, we recommend FreeAgent for very small businesses and QuickBooks or Xero for more established businesses. However, even if your business is small, understand that changing platforms later once you’ve got years of transaction data in a platform can be challenging. So it’s best to make a long-term decision now rather than later.
In all cases, we strongly recommend using professional accounting services to augment your use of these tools. We’re not just saying that because we’re accountants. We’ve seen the fingers of many businesspeople burned when they thought they could do their own accounting. The great news is that these tools bring down the overall cost of accounting because accountants can be more efficient and your data is presented in a familiar tool to them.
To learn more about how Fusion Accountants can help your small business, view our website here.
