Best Self Employed Accounting Software for the UK in 2021

By Henri Gisclard-Biondi
Published: 19/07/2021
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Self-employed workers and independents rely on accounting software to ensure compliance and run their daily operations smoothly. So much so that these programs have become an essential component of their profitability and efficiency. But it can be hard to choose the best solution to keep your records up to date and track revenue.

This comparison will help you choose the accounting software that best suits your needs. Discover our picks for the best accounting solutions dedicated to self-employed people working in the UK.

Keep reading to get a sense of what the right bookkeeping software can do for you!

The benefits of accounting software for independents

Accounting is vital to any business, even smaller ones. While some self-employed workers may think they don’t need one, or that their limited company resources forbid them from enjoying the benefits of such solutions, they could not be more wrong.

No matter the size of your company or its business sector, compliance and efficiency are key. Keeping clean records and filing correct tax returns are essential tasks but can be very time-consuming. To allow you to focus on running your business, accounting software exists and has become a very popular option for small businesses.

And this trend is here to stay: HMRC will make it mandatory for small businesses based in the UK to submit their tax reports online for VAT returns and sales tax as soon as April 2022.

This is why you should always look for solutions compliant with the Making Tax Digital (MTD) initiative, or your choice won’t be future-proof. These tools allow you to enjoy the benefits of tax automation, meaning doing your taxes will be easier than ever!

These can help you:

  • Gain time by taking care of recurring accounting tasks for you and simplifying data entry (bank reconciliation, invoicing...),
  • Ensure compliance by managing accounts payable and receivable or preparing tax reports,

The features provided by these handy solutions allow you to:

  • Manage your bookkeeping more easily and avoid mistakes by checking for errors automatically. Double-entry accounting is the backbone of such software and this allows you to keep an eye on your cash flows in real-time.
  • Improve customer experience and reduce payment delays by providing a convenient way to pay directly from invoices sent via email. Templates can be used to save time and various payment methods are supported depending on the software.

Moreover, additional features can be supported via add-ons or third-party app support. Payroll management is one of the most common add-ons, but specific features can be included, such as advanced analytics and forecasts, time-tracking and more.

The top 3 best accounting software for self-employed UK business owners

ClearBooks

ClearBooks is a solution for UK-based small businesses with all the tools to stay in control of their accounting. This simple yet powerful accounting and bookkeeping software allow you to reduce payment delays and streamline your processes without a steep learning curve.

  • Creating invoices has never been easier and quicker: you can create and send customised invoices directly to customers without leaving your bookkeeping solution.
  • Keep track of your expenses and purchases with powerful sorting options and search or filter transactions to find what you’re looking for in seconds.
  • Automatic bank feeds imports update every day so you have a real-time overview of your cash flow and finances. No more data import or multiple logins to your bank accounts.
  • Get reports that are both easy to understand and truly insightful. All the information you need is available from your dashboard, including your income, who owes you or which bills are due.

❤️ Strong features

  • A powerful invoicing system that calculates sales tax and totals automatically, can be accessed from your phone, provides ready-to-use templates and allows you to export PDF invoices.
  • A wide range of payment options including PayPal, Stripe, but also cash cheques, BACs and one-click payments for Revolut Business users.
  • Project accounting tools to help you store and manage invoices, quotes and budgets related to your projects. Get comprehensive reports to track your progress and reach your goals.
  • Payroll and HR add-on to generate payslips, P60s and other documents easily.

🤔 Areas of improvement

  • Only the Large plan is HMRC-recognised, meaning you won’t be able to enjoy the benefits of the MTD framework unless you subscribe to the more expensive version.
  • No multi-currency support is included in the basic version either.

💰 ClearBooks pricing

  • The Small plan starts at £12 per month and gives you access to the most important features, including invoicing and billing, bank feeds, and even to the project accounting tools.
  • The Large plan is available for £24 a month and gives you access to automated tax, CIS and VAT reports, as well as multi-currency accounting.

All prices exclude VAT and are cut in half for the first 3 months. Discounts are also available if you subscribe for 1 or 2 years. A free 30-day trial period is available, during which you can receive unlimited support from qualified accountants for free.

QuickBooks

QuickBooks is a cloud accounting software solution developed for small businesses and sole traders by Intuit. This online solution has long been one of the most complete accountancy packages available on the market.

  • This solution is MTD-compliant, meaning filing tax returns to HMRC is easier than ever and this choice is future-proof for when the new tax rules come into effect.
  • As one of the most popular accounting software, it also boasts an impressive number of compatible third-party software and bank accounts:
    • It integrates seamlessly with a range of tools, including PayPal, Shopify or Magento.
    • All the banks that support the Open Banking protocol (HSBC, Barclays, Revolut…) are compatible. You can reduce the time spent sorting and tracking expenses.
  • It allows you to get real-time cash flow charts and predict your balance up to 24 months into the future.
  • You can send personalised invoices via the use of templates or starting from scratch. Customers can then pay you directly from the email, just with one click.

❤️ Strong features

  • It’s easy to communicate data to your accountant: they can collaborate with you and access financial information securely.
  • Independents and freelancers have an easy way to track work hours and mileage costs.
  • QuickBooks includes free mobile apps for better mobile accounting on Android and iOS.
  • Payroll features can be added later on as your business grows and starts employing collaborators.

🤔 Areas of improvement

  • The Self-Employed plan doesn’t allow you to let customers pay directly from the invoice.
  • Budgets and multi-currency support are only included with the most expensive plan, which means consultants with a global business are left in the dust.

💰 QuickBooks pricing

  • QuickBooks starts at £8 per month for the Self-Employed plan dedicated to non-VAT-registered sole traders and independents.
  • It is possible to go from this basic plan to the Simple Start plan for £12 per month.

QuickBooks also offers one month of trial and discounts for first-time subscribers. All subscriptions are without engagement or cancellation fees.

Wave Accounting

Wave Accounting is a reliable solution that is easy to understand and works hand-in-hand with you, every step of the way. This free accounting software provides you with a straightforward way to manage the finances of your business.

  • Organise your income, expenses, track payments and send invoices through an intuitive interface to help you get things done more efficiently.
  • All your data is updated in real-time to give you an up-to-date snapshot of the state of your small business.
  • Get timely reminders and never forget to pay a bill or claim an unpaid invoice. Your dashboard helps you see what’s owed or due at a glance.
  • You aren’t limited to only one business: you can add multiple businesses to your free Wave account.

❤️ Strong features

  • Get started in minutes: simply create your free account and get instant access to an overview of your business you can access anywhere, anytime.
  • No need for specific training or accounting knowledge! Wave Accounting avoids obscure jargon altogether to deliver an experience tailored to small business owners.
  • You’re always ready to submit your tax returns: financial statements can be generated on the fly and are always complete with the latest data.
  • You can send invoices in any currency and let customers pay their due with one click with a credit or debit card.

🤔 Areas of improvement

  • Online payments are charged on a pay-per-use basis in the form of a fixed fee plus a commission on card payments.
  • The money won’t be transferred to your bank account immediately: transfers take 7 business days.

💰 Wave Accounting pricing

  • Wave Accounting is free to use. Pay £0 a month for unlimited transactions and clients.
  • Online payments are charged on a pay-per-use basis.
    • For European-issued cards: about £0.20 per transaction + 1.4% of the amount excluding taxes
    • For non-European-issued cards: about £0.20 per transaction + 2.9% of the amount excluding taxes

How to choose the easiest accounting software for freelancers?

Before narrowing things down, you should know that there are two main types of software:

  • Desktop accounting software
  • Online accounting software

Cloud accounting software has been on the rise since the advent of the Internet and mobile. This type of solution is hosted remotely and is accessed online: in other words, it is available on all devices with an internet connexion.

This characteristic makes it more mobile and allows for your accountant to access your data securely or for your team to work on the go.

It is also more flexible. The vendor is the one in charge of maintenance, updates and ensures customer support, which means IT costs are greatly reduced. The SaaS model consists in a month-by-month subscription service instead of a one-time payment.

This allows you to add or remove features from the package easily as your needs change by simply changing your subscription plan, as well as accessing dedicated customer service and support. These cost-savings and flexibility are what make SaaS accounting software extremely popular with growing small businesses such as start-ups.

Self-employed accounting software recap table

Software Standout features Pricing
ClearBooks
  • Included project accounting features to help you reach your goals
  • HR and payroll management features available if you ever need to add them
  • Wide range of online and offline payment options
£12 to £24 /month
QuickBooks
  • One of the most popular solutions available, with broad support and recognition
  • A dedicated Self-Employed version to cater to the needs of freelancers
  • Payroll management add-on to grow with your business
£11 to £30 /month
Wave Accounting
  • Offers real accounting functionalities for free
  • Get started in minutes and support multiple currencies and payment options
  • Access an interactive dashboard and generate tax reports easily
Free + online payment fees

Supercharge your independent business with the best accounting software

This overview should help you define your needs and compare the best options available to UK self-employed workers. If you need an even wider pool of solutions, feel free to browse our directory full of the best accounting software!

Be sure to ready your company for its digital transformation and stay on top of your accounting processes with these helpful tools. Online accounting software is just what you need to stay compliant and file corporate tax easily.

Did you find your next accounting solution in this article? How has your experience been with accounting software? Feel free to share your thoughts below!

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