Staying on top of your business finances is essential but managing invoices, expenses, VAT, payroll, and tax returns can take up valuable time you could spend growing your business.
Thankfully, in 2025, accounting software has become smarter, more connected, and more intuitive. Whether you’re a sole trader, freelancer, or managing a growing team, the right software can help you stay compliant, save time, and gain better financial visibility.
In this updated guide, we break down the best accounting software for small businesses in the UK in 2025 comparing key features, pricing, and pros and cons to help you make the right choice.
1. QuickBooks Online
Overview:
QuickBooks remains one of the most popular and feature-rich options for small UK businesses. With cloud access, strong integrations, and real-time reporting, it’s ideal for businesses of all sizes.
Key Features:
- Automated bank feeds and reconciliation
- VAT tracking and MTD compliance
- Invoice creation and payment links
- Expense management with receipt capture
- Real-time financial dashboards
- Seamless payroll integration (add-on)
- HMRC-compliant for Self Assessment and VAT
Pros:
- Scalable for growing businesses
- Strong support and tutorials
- Regular updates and feature enhancements
- Integrates with 650+ apps
Cons:
- Costs increase with add-ons and users
- Payroll and some features cost extra
Pricing:
From £16/month (Simple Start). Essentials and Plus plans are available for additional users and features.
2. Xero
Overview:
Xero continues to be a leading choice for UK-based small businesses and start-ups. With its clean interface and deep integration capabilities, it offers powerful accounting with a user-friendly design.
Key Features:
- Live bank feeds and auto-reconciliation
- Custom invoices and payment links
- Multi-currency support
- Inventory and project tracking
- 800+ integrations including e-commerce and CRM
- MTD VAT filing and Self Assessment support
Pros:
- Easy to use, even for non-accountants
- Scalable as your business grows
- Excellent mobile app
- Cloud-based access anywhere
Cons:
- Takes time to master reporting features
- Payroll integration is limited in some UK regions
Pricing:
Starts at £16/month, with higher tiers offering more users and advanced features.
3. FreeAgent
Overview:
Now offered free to NatWest, RBS, and Mettle business customers, FreeAgent is a great option for freelancers, contractors, and small businesses. It’s designed specifically for UK tax, making compliance easier.
Key Features:
- Invoice and expense tracking
- Self Assessment and MTD VAT built-in
- Real-time cashflow overview
- Time tracking and project costing
- Payroll and dividend tracking
- Mobile app and receipt scanner
Pros:
- Perfect for contractors and sole traders
- Strong tax compliance tools
- Free for certain bank customers
- UK-based customer support
Cons:
- Less suited for larger or complex businesses
- Fewer integrations compared to Xero/QuickBooks
Pricing:
From £14/month, or free with select UK bank accounts.
4. Zoho Books
Overview:
Part of the wider Zoho suite, Zoho Books is ideal for small businesses that want automation, great value, and custom workflows. It’s particularly popular with service-based businesses and tech-savvy teams.
Key Features:
- Automated invoicing and recurring billing
- Expense management and bank reconciliation
- Workflow automation and custom fields
- VAT and MTD-ready
- Project time tracking
- Integrates with 50+ Zoho and third-party apps
Pros:
- Excellent value for money
- Highly customisable
- Strong mobile functionality
- Supports multiple users even on lower plans
Cons:
- Limited integrations outside of Zoho ecosystem
- Support can be slower than competitors
Pricing:
Starts at £10/month. Higher-tier plans available for more users and features.
5. Sage Accounting (Sage Business Cloud)
Overview:
Sage remains a trusted name in the UK accounting world. Sage Accounting is their cloud-based solution, offering full functionality and HMRC compliance for small and growing businesses.
Key Features:
- Invoicing and cash flow forecasting
- Bank reconciliation
- Real-time reporting
- Inventory management
- Multi-currency and multi-user access
- Seamless Office 365 integration
- MTD-compliant for VAT
Pros:
- Strong support and UK-based help
- Reliable and secure platform
- Ideal for compliance-heavy sectors
- Integrates well with other Sage tools
Cons:
- Slight learning curve
- Add-ons can increase costs
Pricing:
Starts at £14/month. Standard and Plus plans offer greater functionality.
6. FreshBooks
Overview:
Best for freelancers and service-based professionals, FreshBooks prioritises simplicity and great client management tools — perfect for time-based businesses.
Key Features:
- Time tracking and project costing
- Professional invoicing with automated reminders
- Expense and mileage tracking
- Customisable reports and dashboards
- Client portal and estimates
- Mobile app access
Pros:
- Clean, easy-to-use interface
- Excellent support
- Great for service-based professionals
- Integrates with payment providers like Stripe
Cons:
- Limited inventory tools
- Some features locked behind higher-tier plans
Pricing:
Starts from £13/month. Plus and Premium plans available for growing teams.
🧾 Choosing the Right Accounting Software in 2025 The best software for your business depends on several key factors:
- Do you trade internationally? Look for multi-currency support.
- Need detailed project or time tracking? Focus on FreshBooks or Zoho.
- Looking for simplicity and UK compliance? FreeAgent or Sage are great options.
- Want the most integrations and scalability? QuickBooks or Xero are top-tier.
- On a tight budget? Try FreeAgent (via bank) or Zoho Basic.
📣 ISA Consortium Can Help You Choose and Set Up the Right Software
Choosing the right software is only the first step. Setting it up correctly, linking with HMRC, automating your processes, and staying compliant throughout the year are all critical.
At ISA Consortium, we:
- Provide independent software advice
- Help with setup, integration, and HMRC links
- Offer ongoing accounting and tax support
- Work with QuickBooks, Xero, Sage, Zoho, FreeAgent, and more
✅ Book Your Free Consultation Today
Need help selecting, setting up, or switching accounting software?
👉 Contact ISA Consortium to book a free appointment.
Whether you’re a sole trader, start-up, or established business, we’re here to help your finances run smarter in 2025.
All this and more
We offer all the above as part of our full Tax Services and Accounting and can also help you with Capital Gains Tax, Inheritance Tax, Retirement Planning, even filling out your Self-Assessment Tax Returns for you.
