One of the main deterrents stopping people from starting their own business or working freelance is the associated bookkeeping responsibilities that are part and parcel of such ventures. Larger companies can afford to appoint a finance director of course, but this isn’t always possible for smaller enterprises that simply don’t have the requisite funds to hire a suitable person. For instance, a qualified accountant can charge £40 an hour or more for their services.
Fortunately, there are plenty of paid and free bookkeeping software platforms available to hardworking freelancers and company owners to help them regulate their accounts autonomously and, ultimately, save money in the long run. However, the problem is the sheer breadth of choice which can be overwhelming; especially for those who aren’t familiar with the financial burdens placed on a business.
In an effort to sort the wheat from the chaff, ABRS Ltd. has written this article highlighting 6 of the best apps available at the moment, focussing evenly on both paid and free packages.
Probably the most recognisable of the apps on the market at the moment, QuickBooks offers a variety of packages designed to meet the needs of large and small businesses alike and is cloud-based so accessible from anywhere. They offer a 30-day free trial that allows users to try before they buy.
Costing only £6.00 a month and supporting a single user, ‘Self-Employed’ is the most basic option available. Best suited – as the name suggests – for self-employed individuals, it allows users to track their income from multiple jobs, as well as streamlining the process of submitting your self-assessment tax returns at the end of the financial year. Meanwhile, the free mobile app makes it possible to review your accounts when you’re on the move.
The ‘Essentials’ package is a bit pricier at £15.00 a month, but in return for the extra outlay, you’re able to take advantage of a more comprehensive suite; one better oriented to assist small organisations in managing their accounts. In other words, with ‘Essential’ you can systematically arrange the company’s finances, oversee VAT, invoices, and payroll without the usual hassle; it’s even able to handle currencies from around the world. Three people can be registered at a time on this platform.
Similarly, ‘Plus’ is better equipped to assist in the running of a larger firm; hence the £25.00 monthly cost and freedom to add up to five individuals on the system. It contains all of the features mentioned above, along with stock management, employee time tracking, budget creation, and purchase order functionality.
In a general sense, QuickBooks’ range of products is considered more ergonomic than many of the competing alternatives and provides a better starting point for ambitious businesses looking for significant growth.
Marginally cheaper than QuickBooks, Sage One Accounts is designed to be easier to use for those lacking in-depth knowledge of accounting. Moreover, it’s recognised as a more flexible platform than equivalently priced software, making it easier for firms to tailor the system to match their individual requirements. At the time of writing, there are 2 basic packages available: ‘Start’ and ‘Accounting’.
At £6.00 a month, ‘Start’ is a far less comprehensive system, designed primarily to suit contractors. Nonetheless, from fast sales invoicing and VAT calculation tools, to fully-integrated sales apps and profit/loss balance sheets, there’s still much to commend it. Furthermore, as ‘Start’ is cloud-based, it can be accessed anywhere at any time via the web; a significant plus point for the peripatetic freelancer.
The alternative option, ‘Accounting’ (£20.00 a month), is the sensible choice if you’re running – or planning to start – a small business. Most notably, those who favour ‘Accounting’ are able to share access to the software amongst multiple colleagues, track debts and VAT via purchase invoices, conduct financial transactions with international clients in manifold currencies, and create cash flow forecasts when needed.
Large companies may prefer to look elsewhere, however.
FreeAgent sits somewhere between QuickBooks and Sage One, following a tripartite pricing system similar to the former. Targeting organisations of all sizes, one advantage it has over both is the lack of industry jargon incorporated into the system. Instead, it prefers more neutral terms such as ‘expenses’ rather than ‘accounts payable’, in an effort to make it easier for the layman.
Practically speaking, the 3 web-based packages offer broadly the same functions, resulting in a narrower price gap. Therefore, no matter which of the 3 you choose, you’ll benefit from the software’s unlimited user functionality, award-winning support, and intuitive payment tracking features that enable you to monitor all profits and expenditures. The UI of all 3 tiers can also be re-configured to meet individual preferences, giving it an added layer of flexibility.
That’s not to say the 3 packages are exactly all the same, as this brief breakdown of each will demonstrate. ‘Sole Trader’ is the cheapest at £19 a month, offering a basic, fundamental suite of services to contractors, along with self-assessment filing to help alleviate some of the anxiety surrounding end-of-year tax returns. ‘Partnership/LLP’ is £5 more expensive, but embraces additional features, including profit share calculation. Finally, the £29 ‘Limited Company’ package is the premier option for larger or growing businesses that need a comprehensive range of services, supporting corporation tax and dividend voucher tools, in addition to the previously mentioned features.
If money is an issue or you’re reticent to pay for a service that might not differ much from its non-subscription-based cousins, there are an abundance of free bookkeeping apps out there on the World Wide Web.
One such example is VT Cash Book, an off-shoot of VT Software. Despite being free to use, both contractors and small businesses can keep a complete record of their day-to-day transactions with relative ease, thanks to the uncomplicated UI. Another benefit of this free version is that, as they use the same file format, Cash Book files can be opened in VT Transaction+ too; perfect if you decide to upgrade to the premium package at some point in the future.
Obviously, it’s slightly more rudimentary than the paid alternatives, instead focussing chiefly on recording transactions on an ad hoc basis; thus it doesn’t feature a built-in database. However, it’s still capable of assisting with your VAT returns, and can be accessed by multiple users at a time for no extra charge. Besides, although the lack of a dedicated database may seem problematic, the system enables users to import relevant information to Microsoft Excel, circumventing the issue.
All things considered, Cash Book is better suited to contractors or small traders looking for a quick and easy way to record their finances on a daily basis.
Unlike many of the bookkeeping apps on this list, GnuCash is not a web-based system, requiring adherents to download the software onto their computer instead, making it ideal for those in need of reliable (and free) accounting software that aren’t convinced of cloud computing’s merits.
It has most of the key features necessary for small businesses to function correctly, coupled with an easy-to-use and flexible interface. Among these basic features, GnuCash can be fully relied upon to keep an accurate record of income and expenses, schedule recurring transactions – with the option of postponing pending transfers if needed – and create bespoke profit/loss reports.
In addition to the above, there are plenty of advanced functions that set it apart from similar free platforms, including a swathe of features targeted specifically toward the needs of small businesses, the ability to work with multiple currencies, and a tool that track stocks individually or as part of a portfolio.
Finally, the software incorporates robust data storage and exchange features, to help you keep track of your finances. As such, you can store financial data in XML (standard format) or if preferred, you can choose to store information in an SQL database, using SQLite3, MySQL, or PostgreSQL. In terms of data exchange meanwhile, GnuCash supports OFX (Open Financial Exchange), something which many banks are starting to use. For those unfamiliar with the system, OFX is “a transaction matching system ensures that duplicate transactions are accurately recognized and automatically deleted during file import”.
Made specifically for entrepreneurs, freelancers, and small businesses with 9 employees or fewer, Wave is one of the world’s fastest growing, free cloud-based accounting software platforms.
Reliable and comprehensive, it has been recommended by a number of professional accountants for its usability. Indeed, it facilitates everything the small business owner would need to manage their accounts effectively, including report generation tools, invoicing and payroll functionality plus automatic transaction recording when linked to your bank or PayPal account.
Importantly, there are no limits to your activity, so you can create as many reports, send as many invoices, and work with as many clients as your business needs, without spending a pound. It even offers a comprehensive tutorial – ‘Get Starting with Accounting by Wave’ – for customers who wish to test its capabilities before making a commitment, providing a multitude of tips and advice for getting the most out of the software, as well as demonstrating the platform in action.
Ultimately the right software for the job is a personal choice, thus there are numerous alternatives to the 6 detailed in this article that certain individuals may find preferable.
However, it’s worth remembering many small companies and contractors use a combination of accounting software and qualified accountants to manage their finances throughout the fiscal year, consulting professionals for advice and the answer to any related questions, as much as anything else.