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The Ultimate Guide To Accounting Software

All businesses need to keep accounts.

How you do that depends on your business’s legal status (limited company, sole trader etc), how much income your business has, and the number, type, and complexity of transactions.

Making The Right Choice of Accounting Software

It’s a choice for what’s right for you and what’s right for your business.

If it doesn’t work for you, you aren’t going to get it done easily and are likely to put it off.

Creating A Bookkeeping System That Works means considering what your business or freelancing needs.

What to consider

  • Sole trader or limited company
  • Income
  • Number of transactions
  • Do you like to use your smart phone?
  • Prefer the cloud?
  • Like the brand colours of one software over another?
  • Love the cloud or want desktop?
  • Your computer operating system
  • Do you want an automatic bank feed?
  • Do you have a separate business bank account?
  • Office based or on the go?
  • Cloud data servers non-US based?
  • What will be easiest for you to keep up to date?

A big part of your decision is whether you have a limited company or are a sole trader.

Limited Company

If you have a limited company, you need to use ‘proper’ accounting software such as Freeagent.

Your business is a separate legal entity which means extra legal obligations. No matter how large or small your profits or transaction numbers, it’s too easy to make expensive mistakes if you use a spreadsheet.

(For more about limited companies, read here and here)

There are ‘professional’ options which are designed for accountants and bookkeepers (Sage, Quickbooks etc). Even the ones that say they are simple can often be super confusing, and a bit overkill.

Unless you want nothing to do with your accounts at all (in which case, you’re probably in the wrong place reading my blog instead of a traditional accounting blog), one of the user friendly accounting software options is your best best.

Most are roughly similar so have a look at the integrations (e.g. Receipt Bank, automatic bank account feed with your bank), do you like the colour and what’s the customer service like.

There are options that aren’t in the cloud (that means you use them via a web browser) but I’m talking to digitally savvy folks so I haven’t included them since they tend to be jargon heavy and professional focused.

Accounting software for limited companies

They can also do your invoicing and send reminders, and a lot can do dividend slips and payroll. You can add your accountant/bookkeeper/VA to your account so they can get the information they need or do work for you, without you needing to give them admin access or bother you at all.

Using accounting software is also a way of keeping your accountant bill down (which is a service I offer – remember I help you do it yourself or as much of it yourself as you can, not do it for you).

Sole Trader

When your business income is below £70k and you have a low number of non-complex transactions, it’s ok to use a spreadsheet for your bookkeeping. There isn’t a rule that you need to use software over £70k but it’s good practice to use accounting software if your business has that level of income (it might be an idea to explore becoming a limited company too, talk to me).

When your business has a high number of transactions or they’re more complex, use accounting software. Also do this if you may apply for a business loan in the next few years or want to sell your business.

For most though, a spreadsheet is absolutely fine. The simpler, the better, as long as it has all the info you need on it.

Spreadsheets for sole traders

(If you’re not a blogger or don’t have any advertising, affiliate or sponsorship income, you can delete those categories)

Spreadsheets in the cloud:

Spreadsheets for Mac:

Spreadsheets for PC –

Spreadsheets for Linux –

Accounting software for sole traders

Ask your business friends what they use and why.

Contact me for a chat if you want to explore some coaching about the right option for your business. It can save a lot of time and money – and sanity – getting it right.

And don’t forget the cookies.

What accounting software do you use and what do you like about it?


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