As your business grows, handling the finances can be a bit of a nightmare. Invoicing, tax returns, VAT returns and general bookkeeping can take precious hours out of the time you spend in your business, and employing someone to do it for you may be an unnecessary cost. That’s why it makes financial sense – in more ways than one – to search out the best small business bookkeeping software for the type of business you run.

Why invest in business bookkeeping software?

Good software packages can help your business in a variety of ways. From a simple CRM system to a small business basic bookkeeping package, the right software can reduce the amount of time spent on tasks, increase accuracy and aid business planning. Take the time to choose the right package for your business, and you could find that things run more smoothly, and your time can be spent elsewhere – on business development and growth for example. This type of software is more affordable than you think and in several cases can grow with your business, giving you complete flexibility.

Where to start…

Before you even begin to look at software, take a look at your business. Understanding what you need will help you to choose an appropriate package. So what do you need to know?

  • The central tasks that you need the system to cover – general bookkeeping, invoicing, payroll, P&L accounts and balance sheets for HMRC, VAT returns and even small business expenses: make sure you understand exactly what you want the system to handle for your business.
  • The type of business you run – different businesses have different financial requirements. Do you need to keep a comprehensive stock system? Do you need to forecast sales on a quarterly basis? Do you have to run regular reports on stock? Do you need to segment your products and services to see which lines are selling best? Understanding the requirements of your business will help you to specify the best software for your needs.
  • The budget you have – whilst you can get free bookkeeping software, this type of package is really only suitable for a sole-trader start up. Otherwise, you should expect to pay for the package you choose. You may need to pay an upfront cost and then a monthly fee, which is likely to vary depending on the size of your business or the number of users you have. It’s worth investigating cost, or getting advice from your accountant or IT support service so that you know how much you might need to spend.
  • Liaising with your accountant – most businesses will use an accountancy service of some sort. These experts are ideally placed to recommend the sort of software that will be right for your business, and that is compatible with their own systems. You might also want to talk to your IT consultant, if you have one, who will be able to give you advice on hosting, backups and access. You may also be thinking about using outsourced bookkeeping services, or virtual assistant bookkeeping services and if so, these people will also need to be able to use and access your system.

Evaluating a bookkeeping tool for small business

Once you know what you need your new software to do, take the time to make sure you are choosing the best option for your business. Look for the following:

1.Trial options

Look for software that offers a trial period. This allows you to test out the user interface, see how the package integrates with other software you use, if applicable, and get a feel for whether it can accomplish the tasks you need it to cover. Some packages only give you limited access to functionality, but it is often enough for you to decide whether the style and practicality fits well with the business.

2.Professional advice

Do talk to your accountant, to your IT support and to your peers. Recommendation is often the key to choosing between two or three very similar packages and it’s wise to listen to the advice of those who are using and recommending these systems on a regular basis.

3.Independent reviews

You can find reviews of small business bookkeeping systems in a variety of places – from your trade magazine to online review sites. These reviews and bookkeeping articles can be very useful and give you a much more rounded picture of the software as a day-in, day-out tool than the standard marketing information.

4.Hosting options

Do you want your system to be hosted in-house or off-site? Again, your IT support advice will come in handy here. If you want to host in-house, you’ll need to make sure that your server is able to run the software reliably and that it is secure enough to protect your data. If you choose cloud, or off-site hosting, look for a package where the hosting is UK based and offers daily backups as well as keeping records monthly and annually via a removable backup so that should anything fail, you still have access to your data. Knowing that your financial data is secure is extremely important.

5.Remote access

Does the software allow you and your advisers to access the system remotely? If you’re working away from the office, or your accountant needs to access files, it’s important that they can do so remotely.

6.Big names or niche providers?

There are some very well-known accounting software companies out there – both Sage and QuickBooks are very well-known in the market, and offer small business solutions. But you may be happier with a smaller, niche provider, where you may be a key client and where you have a dedicated relationship with the company. However, you don’t want to go with software from a company that might not be around for ever, so consider carefully which is the best option for you.


What kind of customer support is offered by the packages you are looking at? Setting up and getting used to new software can take a while, and you’ll need someone to refer to. On-going support is just as important, particularly if you choose a package where you can add functionality as your business grows.

Taking the next step?

If you’re ready to look at bookkeeping software, we hope this article has helped you see how to make a start, ensuring that you don’t rush into buying software, but rather take the time to work out what you need, and find the best small business bookkeeping system that matches those needs.

If you’re short on time and would like to consider using our virtual bookkeeping service or would like to know more about our other bookkeeping and business services feel free to call us on 0800 994 9016 or use our contact form in the menu above.


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