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Michelle Monck

Michelle Monck

Consumer Finance Expert
Published: 02/04/2020

At a glance

  • Accounting software apps allow businesses to manage their finances and accounts.
  • You can choose between a paid for and a free software service.
  • Some accounting apps meet the requirements of HMRC for digital tax returns.


Accounting software apps can help small businesses and business owners to more easily manage their finance and VAT returns. In April 2019, HMRC introduced Making Tax Digital, and this compelled some businesses to use digital accounting software to submit their tax returns. This guide aims to help you understand what accounting software apps is, how it works and includes a summary of some of those available.

What are the best accounting apps for small businesses?

There are now many accountancy software apps for you to choose from. Some of these are free to use, but you should check how your data is used, advertising you may receive or if you may be restricted in your use of the app. Many of these offer free trial periods so you can test and find the right one for you.

We've listed a selection of these software apps, to get started.


Featured provider Information

More Details

  • Take the hassle and complexity out of accounting with a range of solutions available to you.
  • Create and send invoices in seconds, reduce manual admin, and manage your VAT with ease.
  • The simple interface means you can get started with ease.
  • It comes with award-winning free support, available over phone, email, and web chat.
  • Regardless of whether you are a sole trader, small business or large enterprise, there is a Sage product to suit your needs.

  • Try for free before you purchase.

Find out more
  • Smart, simple account software - Trusted by 4.5 million small businesses.
  • Free, award winning UK phone support
  • Manage everyone in one place – Manage taxes, pay staff, send invoices and sort bills and expenses automatically.
  • Stay on top of your taxes and use the SmartScan™ feature to check your VAT return for mistakes
  • Simplify payroll and choose from two payroll solutions which automatically sync to your accounts for a full view of your cash flow
  • Your money faster – create and send customized, pay enabled invoiced that let your customers settle up in seconds and send reminders to avoid late payments.
Find out more
  • Xero gives you the insights to plan for the future of your business
  • Gives a clear view of income and expenditure
  • Try free for 30 days
  • Trusted by over 2 million subscribers worldwide
  • Online accounting software that automates everyday business tasks
  • From only £10/month
Find out more
  • All-In-One small business invoicing and accounting solution.
  • Save time with automation.
  • Robust reports for powerful insights.
  • More ways to get paid.
  • Try it for free.
Find out more



The list of featured providers on this page is a selection of services available and gives you an idea of the kind of options available. You can find out more about the individual products by visiting any of the providers listed. will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions.

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How do accounting software apps work?

Accounting software apps are designed to help small businesses and the self-employed to manage the finances of their businesses easily and on the move. If you are a small business owner or are self-employed then you probably spend most of your time either working away or meeting with your clients and suppliers. Accounting software apps allow you to manage your accounts, send invoices, keep receipts, and track expenses and cashflow from anywhere through your mobile device. There are an increasing number that will also integrate with HMRC so they can be used to submit your tax returns digitally. As long as you provide all the required information into the accounting software app as you go, then compiling your tax return should be easier and faster to do. Furthermore, if the app is recognised by HMRC then you can also use this to comply with HMRC’s Making Tax Digital scheme.

What are the different types of accounting software app?

There are four types of accounting apps and in some cases some brands will specialise in one area, whereas others offer all of these services in one place (often allowing you to choose which ones you want to access and pay for):

1. Apps for managing expenses

There are apps available to help manage receipts and expense claims. For example, you can quickly end up with a pile of receipts as a result of making purchases or managing your business. There are apps that can scan these, capture the image and convert this into data for inclusion on an expenses claim form.

2. Apps for managing invoicing

You can make it quicker to send out invoices by using an app that lets you create these on the move and as you complete each order or job. In addition, there are also apps that will use transaction data from your bank and then match these automatically to the invoices you have issued.

3. Apps for bookkeeping and bank reconciliation

These apps use data from your business bank account to remove the need to manually add banking transactions into your accounts. They automatically add transactions into your accounts, which you can then categorise. This means you can update your books on a regular basis using your mobile rather than leaving it as a bulky task at the end of each month.

4. Apps to manage your cashflow

Accounting software apps often come with reports and dashboards already built to help you keep track of your revenue, late invoices, expenditure and money you have been paid.

Will a mobile accounting app work on my phone?

When you sign up to a mobile accounting service, you will be asked to create an account so you can log into this securely. Most of these are usually accessible via a desktop, mobile or mobile app; meaning you can use either of these to make updates to your accounts and this will be tracked across all of them. This also means that if you change from an Android phone to a iPhone, or vice versa you can do so without losing your data.

How does Making Tax Digital work?

HMRC is moving towards a digitally based tax return system for the self-employed. They started by mandating all VAT registered businesses with a turnover of more than £85,000 to complete their tax returns electronically. This requires these businesses to submit their returns using compatible accounting software.

What is QuickBooks?

QuickBooks is an accounting software service that is delivered by Intuit. It is currently used by 4.5million businesses and allows you to access dashboards to see your profit and loss, expenses, sales and bank account balances. It is also compatible with HMRC’s Making Tax Digital, meaning businesses required to submit digital tax returns will be compliant. For smaller businesses, the self-employed and sole traders this can save you significant amounts of time in automating your tax returns.

Which accounting software is free and meets the needs of HMRC Making Tax Digital for VAT?

HMRC has a free facility to search for accounting software providers. There are hundreds of free providers that offer accounting software for businesses that can be used for digital VAT record keeping and are compatible with HMRC.

Is Xero easier than Quickbooks?

QuickBooks and Xero are both similar offerings, allowing you access to a financial dashboard wherever you are, whether that is on your mobile or on your desktop. Both accounting software tools are a subscription-based service allowing you to pay monthly and have three tiers with access to different features. Both accounting software providers also provide a free 30-day trial. Although Xero has free online support, Quickbooks has free telephone support.

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

man looking at phone sat at a desk with a newspaper and laptop

At a glance

  • Accounting software apps allow businesses to manage their finances and accounts.
  • You can choose between a paid for and a free software service.
  • Some accounting apps meet the requirements of HMRC for digital tax returns.

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