Accounting Software for Small Businesses Explained
Accounting software can make it easier to keep on top of your business finances. It can reduce paperwork, save repeated typing and help you see what you are earning, spending and owed.
But how much does it actually do? Can it prepare your accounts and tax return? And will you still need an accountant?
This guide explains what to expect, what to check before subscribing and how Craigerne Accountancy can help you get started.
What can accounting software do
Most cloud accounting packages let you work through a web browser, with a mobile app for certain everyday tasks. Depending on the package and subscription, useful features include:
Bank feeds: import transactions from supported bank accounts.
Invoices: create and send invoices, track unpaid amounts and send reminders.
Receipts and expenses: upload documents or photograph receipts, with some tools extracting the details.
Bookkeeping: organise income and spending into categories and match payments to invoices.
Reports: show business income, costs and profit, plus money customers owe you.
Tax tools: help with estimates, VAT or other submissions where supported.
These features can reduce the amount of information you enter more than once. Availability, limits and extra charges vary, so check the specific plan.
Is it easy to use
You do not need to become an accountant to handle the everyday tasks. The aim is to learn a few useful routines: sending an invoice, uploading a receipt and checking what a bank transaction relates to.
There is still a learning curve, particularly at the start. Correct opening figures, sensible categories and the right settings make a difference.
At Craigerne Accountancy, we can help you set up your software and show you how to use the features relevant to your business. You can start with the basics and build confidence as you go.
Does it really make bookkeeping easier
It can, especially if you currently type transactions into a spreadsheet or sort through receipts at the end of the year.
For example, you might photograph a supplier receipt when you buy something, then match it to the payment when it appears through the bank feed. Keeping the document and transaction together makes them easier to find later.
However, imported transactions and suggested categories still need checking. A loan paid into your bank account should not be treated as sales income, and personal spending should not simply be recorded as a business expense.
Software reduces repetitive work, but the records still need to reflect what actually happened. A short, regular bookkeeping routine helps prevent a backlog.
Can it prepare my accounts and do the filings
Some packages can handle parts of this process, but bookkeeping, preparing annual accounts and filing tax returns are different functions.
Software can turn your bookkeeping records into reports showing income, expenses and profit. Those records provide the starting point for preparing your annual accounts and tax returns, reducing the need to enter the same information again.
Depending on the product and the features you subscribe to, it may also support submitting VAT returns, personal tax returns or company accounts and Corporation Tax returns to HMRC and Companies House. Some functions are built in, while others need an add-on or your accountant’s professional software. We can help you establish what is included and what additional support you need.
The key is to distinguish a report generated from your records from a completed set of accounts or a return that is ready to file. Missing transactions, the treatment of equipment purchases and expenses that are not allowable for tax can all affect the final figures.
Before filing, someone still needs to check that the records are complete and that any necessary accounting and tax adjustments have been made. At Craigerne Accountancy, we can agree who handles the bookkeeping, who reviews the figures and who prepares and submits each return.
Does it link to my Self Assessment
It can, but check exactly what the product supports.
It can help connect the two. Your bookkeeping records provide the business income and expense figures needed for your tax return, reducing repeated data entry. The exact process depends on whether you are within Making Tax Digital and which software you use.
Some filing tools are designed for accountants, while others can be used directly by business owners. Buying a bookkeeping subscription does not necessarily give you everything needed to complete your personal tax return. We can explain the appropriate route for your circumstances.
Your business records may only cover part of your tax position. Employment income, savings interest, dividends, property income and other relevant details may also need to be included. A business profit figure on a dashboard is not necessarily your final taxable profit or personal tax bill.
Craigerne Accountancy can help bring the information together and check that the chosen filing route covers your circumstances.
Can software automate Making Tax Digital filings
Yes, some software can automate submissions as well as prepare the figures.
Compatible software can use your bookkeeping records to prepare quarterly updates and support the annual tax submission, reducing manual entry. You or your accountant can manage the filing process through the appropriate software.
Automatic preparation is different from automatic submission. Some providers go further: FreeAgent, for example, can schedule quarterly submissions once configured. This does not extend to its year-end submissions. The available automation depends on the provider and settings.
The process should be agreed in advance: who keeps the records up to date, who checks them, whether approval is required before submission and who checks that HMRC has accepted it. An automated submission can still contain incomplete or incorrectly categorised information.
We can help configure a suitable process and explain which parts your chosen software automates.
If Making Tax Digital for Income Tax applies to you, compatible software is needed to maintain digital records, send quarterly updates and submit your annual tax return. Quarterly updates are summaries of business income and expenses, not separate tax returns.
You may use one suitable product or a combination of compatible tools. Spreadsheets can still play a role when connected through appropriate bridging software. The software must support the income sources and submissions you need. HMRC’s software guidance explains what to check.
We can help you check what applies to you and choose a workable approach. Our Making Tax Digital guide explains the wider requirements.
Could it reduce my accountancy fees
Possibly, if it reduces the work involved. Doing the everyday bookkeeping yourself can reduce the work you need to pay an accountant or bookkeeper to do. Complete, well-organised records can also help avoid additional charges for missing paperwork, correcting entries or reconstructing the books.
That principle applies whoever prepares your accounts. It does not guarantee that every accountant will reduce a fixed fee or include all support at no extra cost.
However, buying software does not automatically reduce your fees. The overall cost also depends on:
How much bookkeeping you do yourself.
The quality and completeness of your records.
The accounts, tax returns and advice you need.
Software subscriptions, setup, training and any ongoing support.
Poorly maintained software records can still take time to put right. The sensible comparison is the combined cost of software and professional support, alongside the time it saves you.
At Craigerne Accountancy, we can discuss the division of work and explain what is included in your fee before you commit.
Can Craigerne Accountancy access the software and help me
Yes. With your permission, Craigerne Accountancy can have a separate accountant or administrator login, where supported, with access appropriate to the work you have agreed.
A practical arrangement is for you to handle the core day-to-day work: raise invoices, upload receipts and check incoming bank transactions. Craigerne Accountancy can help you learn the process, resolve queries and review the records at agreed intervals.
Because you work from the same records, Craigerne Accountancy can look at the transaction you are asking about and help put it right. The aim is to build your confidence and maintain cleaner books throughout the year, reducing the amount of sorting out needed later.
You should use the software’s invitation and permissions settings rather than share your personal password. Software access and authorisation to act for you with HMRC are separate arrangements.
Access also does not mean someone is continuously monitoring your records. We would agree how often reviews take place and which tasks each of us will handle.
Which software providers are available and how much do they cost
Xero, FreeAgent, QuickBooks and Sage are among the options available, alongside other accounting packages and specialist tools. There is no single best choice for every business.
Many packages charge a monthly or annual subscription, with the cost depending on the features, number of users and level of functionality. Some providers offer free or lower-cost options for simpler needs, and software may sometimes be included with a qualifying business bank account.
Look beyond an introductory discount and consider the ongoing cost, VAT and any extras for payroll, receipt processing or tax filing. A lower-priced plan may be enough for a straightforward business, while more complex requirements can justify a fuller package.
Craigerne Accountancy can help you compare suitable providers and choose a package that fits your business, budget and confidence with technology. If you already use software, we can first discuss whether it meets your needs before recommending a change.
We can help you choose suitable software or make better use of the package you already have. Our advice is guided by what suits your business.
How do I choose the right package
Start with what your business needs. Consider your business structure, transaction volume, invoicing, VAT, payroll, stock and any other systems you use. Check that the software supports your bank and the filing requirements relevant to you.
Compare the ongoing subscription price as well as any introductory discount. Ask whether receipt processing, extra users, payroll, tax filings or other features cost more.
A trial can help you judge whether the everyday tasks feel manageable. It is also worth checking how you can export your records if you later change provider.
We can help you assess suitable options before you subscribe, so you pay for the features you need.
Can I keep using spreadsheets or switch from another system
The right approach depends on your reporting obligations and how you prefer to work. A simple spreadsheet may still suit some businesses, although applicable digital filing rules must be met.
If you are moving to new software, you do not necessarily need to re-enter every historic transaction. The amount to transfer depends on the changeover date, reporting needs and what the new system can import. Opening balances, unpaid invoices and outstanding bills need particular care.
We can help plan the changeover and check the starting figures, while making sure the records you need remain accessible.
How Craigerne Accountancy can help
At Craigerne Accountancy, we combine software certification with strong practical experience across a range of accounting packages. We can help you choose a suitable system, get set up and confidently manage your day-to-day bookkeeping.
We support small businesses in Peebles and the Scottish Borders, whether you are starting from scratch or looking to improve your existing bookkeeping routine.
Our aim is to get you comfortable with the everyday tasks, with professional support available where you need it. You remain involved in your finances while giving your accountant clearer, better-organised records.
Depending on the support you need, we can:
Help you choose a suitable package and subscription.
Set up your business details, opening figures and bookkeeping categories.
Help connect supported bank feeds and establish receipt and invoicing routines.
Show you how to handle the everyday tasks.
Use agreed accountant access to answer questions and help resolve problems.
Review your records and prepare accounts and tax submissions within your agreed service.
You may want to do most of the bookkeeping yourself, share the work with us or ask for more ongoing support. We can discuss an arrangement that suits your business and confidence with technology.
Thinking about accounting software, or already paying for a package you are struggling to use? Get in touch with Craigerne Accountancy to discuss your options and request a free quote.