Choosing accounting software is one of the first technology decisions most UK businesses make, and one of the hardest to change later. This guide explains what actually matters for a sole trader or small limited company, so you can shortlist two or three tools and try them properly.
1. Start with Making Tax Digital (MTD)
HMRC's Making Tax Digital rules require many businesses to keep digital records and submit returns using compatible software. MTD already applies to VAT-registered businesses, and MTD for Income Tax Self Assessment is being phased in for sole traders and landlords above certain income thresholds. Before anything else, check that a product is listed as compatible on HMRC's own software list for the returns you need to file.
2. Bank feeds and reconciliation
Most of the time you save comes from automatic bank feeds. Check that the software connects to your bank (including app-based banks), how often transactions refresh, and how easy it is to match transactions to invoices and receipts.
3. Invoicing and getting paid
- Branded invoice templates showing your company name, number and VAT number where required.
- Online card or Direct Debit payment links on invoices.
- Automatic payment reminders for overdue invoices.
- Support for quotes, credit notes and repeating invoices.
4. Receipts and expenses
Look for a mobile app that can photograph receipts and extract the amount, date and supplier. If you have staff who spend money, check whether expense claims and mileage are included or cost extra.
5. Payroll
If you employ anyone, including yourself as a director, you need to run payroll and report to HMRC through RTI. Some accounting tools include payroll, others charge per employee or require a separate product.
6. Ask your accountant
Your accountant will spend hours inside the software each year. Many practices prefer one or two platforms and may offer discounted subscriptions. Agreeing on a tool together avoids paying for data migration later.
7. Compare total cost, not headline price
| Check | Why it matters |
|---|---|
| Introductory discounts | Many providers discount the first months; check the full monthly price afterwards. |
| Limits on invoices or bills | Entry plans may cap the number of invoices or bills per month. |
| Payroll and add-ons | Payroll, multi-currency and projects are often extra. |
| VAT | Check whether prices are shown including or excluding VAT. |
Our shortlist approach
Pick two or three tools from the accounting section of our directory, start free trials at the same time, connect the same bank account to each, and raise a few real invoices. Within a week, the right choice is usually obvious.