As 2019 comes to a close, you have a great chance to look back on the year, where you did well and what you could still work on in 2020. In the last few articles we’ve published, we’ve gone over many of the benefits of moving your accounting into the cloud, so if you’ve not already done so, now’s the time to seriously consider it, especially since Making Tax Digital is now in effect.

In today’s blog post, we’ll take a look at some of the best accounting tools for SMEs out there so that if easier accounting is your new year’s resolution, you’ll know where to start looking. Without further ado, here’s your guide to a few of the best cloud accounting suites for small businesses in 2020 and how to choose the right one for you.

What to look for in your cloud accounting software

What kind of software will be best for you depends on your priorities and budget, so the best place to start is by considering these factors. The accounting software market is heavily saturated and it’s easy to be wooed by long lists of snazzy functionalities your small business just doesn’t need. 

So start by setting a realistic budget and considering which features matter to you most: unlimited invoicing? Payroll? Easy expense reports? Make a list of must-haves and nice-to-haves to keep in mind when shopping around and don’t get distracted by features you won’t need that’ll only end up costing you extra. Be realistic about the rate at which your business is growing and look for a solution that can accommodate that growth.

Sales reps will try to woo you, so take advantage of the situation by asking all the important questions before you settle on a product. Ask about how secure their API is, how often they back up their data, their customer support and any additional fees they charge. After all, while changing cloud-based providers is cheaper and easier than it is with desktop software, you likely won’t want to repeat this process and learn to use a new product all over again any time soon.

1. QuickBooks

Quickbooks, developed by Intuit, is one of the earliest players in the accounting software market. With pricing starting at just £8 a month at the time of writing, it’s also one of the most competitively priced. The £8 plan is the self-employed self-assessment option, allowing freelancers to track their income and expenses, send unlimited invoices and more. 

For a few extra pounds a month, you can get access to the Simple Start plan, with tracking and filing in accordance with Making Tax Digital and the ability to chase up clients for late payments. There’s also an add-on available for invoicing. The platform also offers a good number of tools for monitoring and reporting as well as 24/7 customer support and integrations with Shopify, Paypal and Square.

2. FreeAgent

Our fellow Scottish business FreeAgent specialises in award-winning accounting software for small businesses and sole traders. Like a few other providers on this list, they offer your first 30 days free, followed by six months at half price with no contracts, making theirs an easy software product to try out without a large commitment. There are also no limitations on the number of users, clients and projects you can add.

Due to the size of the businesses it targets, the main focus of the FreeAgent software is on invoicing (with automatic chasing), time tracking and keeping track of your receipts and cash flow, all housed on one, intuitive dashboard. They also take cybersecurity very seriously, with sophisticated encryption and data backups taking place several times per hour on secure servers. FreeAgent also has a backup data centre just in case the primary one is compromised.

3. FreshBooks

FreshBooks is another award-winning accounting software provider designed specifically with small businesses in mind. Similar to FreeAgent, the Canadian tech company offers time tracking, recurring invoices with regular data backups and a single dashboard. Their software also integrates with Zendesk, Stripe and Paypal

FreshBooks also tracks the opening of invoices, meaning clients can no longer claim they received their bill. You can bill in any currency and keep track of expenses easily, with the ability to snap a picture of receipts for safekeeping. You can also generate reports on profits and losses with just a few clicks.

4. Xero

With Xero, you can take care of invoicing and expenses as well as inventory and payroll. Xero also makes for an attractive option for startups, offering 50% off for businesses less than a year old for the first 12 months. You might initially be tempted by their Starter package, priced at just £5 for the first three months (and £10 after that), but at closer inspection, you’ll find out this only includes five invoices and 20 bank transactions, making it too limited for a majority of small businesses.

The more comprehensive plans do offer enough for most small businesses but as these are more than twice the price of the Starter option, Xero is no more affordable than the other options in this article. They do offer dozens of configurative reports, simple budgeting and unlimited user profiles. You can also send invoices, track inventory and create purchases easily on the go with your tablet or smartphone. Payroll is offered at an extra cost through Xero’s partner, Gusto.

5. Sage

While Sage is best known for their enterprise-level accounting software, they do also offer accounting for small businesses. Sage Business Cloud handles cash flow, customers, invoicing, suppliers, VAT and more, allowing you to submit returns under Making Tax Digital in a few simple steps. 

Sage’s Accounting Start is a good product to start with for many small businesses, starting at just £6 a month for the first six months. However, this option doesn’t offer multiple users or purchase invoices. In addition to multiple fully cloud-based options, Sage also offers an option that combines cloud computing and desktop accounting software that integrates with Office 365.