Online Accounts Software Compared

For any small business, managing your accounts is key. A pile of receipts in a shoe box is not going to give you an up to date financial view of your business. Here I review 3 popular online accounts software.


Xero Online Accounting Software

Xero (pronounced zero) is an Online Accounting Software package and is probably the world’s market leading small business online package. The company was started only in 2006 in New Zealand but now have a presence in Australia, the US and in the UK.

Although any user can sign up for their own Xero account and start working on their accounts straight away Xero has an international network of Accountants and Bookkeepers who partner with Xero.

For myself and I’m sure many other micro-business owners ‘Accounts’ is a dirty word which keeps us from our families and prevents us from spending time doing what we love. Xero has a number of features which can help you claim back some of these lost hours number crunching. They have the ability to get an automatic feed from your bank (check you bank allows this) and import and automatically code your transactions which allows you to reconcile your accounts with just a few clicks.

Of course Xero does all the usual accounts functions such as pay bills, create purchase orders and invoices, run your payroll and handle expenses claims. For businesses which sell to around the world or in foreign currency Xero can handle 160 foreign currencies and exchange rates are updated hourly letting you have true visibility on gains and losses made through currency fluctuations.

If you run a retail operation or an online store then Xero integrates with third party packages to automate this without having to spend a fortune on web design or POS (Point Of Sale) equipment.

Speaking of integrations this is one of Xero’s strong points, they allow you to integrate with other systems such as inventory or job management systems, Customer Relationship Management systems and Quoting tools.

Pricing – From £12 to £24 per month,

Support – 24/7 email support

Free Trial – yes – reduced feature set only start paying when you’re ready.


Kashflow Online Accounting Software

Kashflow is a 10 year old, UK based company which has over the years made a name for itself providing a great accounting package aimed at small businesses. If you listen to commercial radio in the UK you might well have heard their adverts over the last couple of months.

Kashflow covers the basic accounting functions including sales and purchase orders, invoicing, bank reconciliation, reporting etc but doesn’t have quite as rich set of features as Xero. For instance it doesn’t allow reconciliation via bank feeds or support payroll functions.

However it does have a lot of functionality geared towards the UK market such as reports for Self Assessment and HMRC reporting. Another plus for Kashflow is the large amount of payment processors it integrates with including PayPal, SagePay, PayPoint and Barclaycard to name a few. In fact integrations with other systems is a real focus for Kashflow and there’s more to choose from than with Xero, I counted 40+.

As with Xero, Kashflow has a partnership arrangement for Accountants and bookkeepers.

Pricing – A flat £17.99/month

Support – 24/7 email support

Free Trial – Yes, full featured trial for 14 days.


Freshbooks Online Accounting Software

Freshbooks has been around for nearly as long as Kashflow and is based in Canada but has customers in 120+ countries. Freshbooks is probably the simplest most intuitive packages to use and is geared very much towards businesses that bill for time so is great if you have a service oriented business such as IT Support, Social Media or Business Consultancy. Unlike the two above, unless you’re in North America there isn’t a partnership scheme for accountants.

As you would expect Freshbooks makes it super simple to track time spent on clients, expenses tracking and client rebilling. They also make it easy to take payments online, integrating with 14 payment processors including PayPal of course. In fact where I was impressed with the integrations available with Xero, my mind was blown by Kashflows integrations Freshbooks integrations are just mind bogglingly extensive.

Although Freshbooks has slightly less whistles and bells than the rest it is by far the simplest to use, for those of us, myself included, who hate doing the accounts this could end up being the deciding factor.

Pricing – from Free (limited to 3 clients) to $39.95/month.

Support – email and phone support Mon-Fri 9am-6pm EST (GMT – 5hrs).

Free Trial – yes, 30 days.

(Ed – there is also FreeAgent)

micro business actionToday’s Micro Action

There are a lot of Accounts packages out there so take a look at the solutions above as well as any others you find on Google and compare their features to what YOUR business actually needs to keep your accounts in order.

Tanya Jayne Park

Tanya Jayne Park is a cloud computing evangelist and all round girl geek. Constantly connected to the internet helping micro businesses and non-profits increase profitability whilst reducing IT headaches. If you need some guidance on setting up cloud based apps then Tanya is a Google Apps and Capsule reseller.

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  1. Good roundup. I recently switched our well-established (13 yrs!) microbiz from QuickBooks. I evaluated several of these an went with Xero in the end. The ability to import transactions from bank statements – either using its automatic feeds or just by uploading the downloadable version you get from interent banking – is amazing. It saved me hours getting our books up to date (yes, I’m one of those!) and meant there were none of those stupid mistakes where you’ve entered a digit wrong. There is also support for importing just about any data from cab file – invaluable as I do timetracking and invoicing in a different system (Harvest). It means you’re not reliant on there being a pre-built integration to get information into Xero. My accountant was really impressed too. It has all the advanced features she needed like fully customisable chart of accounts, journal entry etc… She’d previously labelled all such systems a bit ‘mickey mouse’ but I think may be becoming a convert.

    I also looked at FreeAgent which is a UK system very popular with a lot of freelancers I work with. It’s much less intimidating if you’re just starting out as it hides all the accounting jargon. It also does time tracking. I found Xero much more suitable for moving to as an established business – It was almost impossible to replicate our custom chart of accounts in FreeAgent – but for a sole trader or partnership it’s worth checking out too.

  2. I will add another recommendation for FreeAgent. We started using it as a sole tradership several years ago and have since grown into a Ltd company, still using FreeAgent happily. It is probably better suited for smaller businesses, but I can’t praise the product and the support team enough. It hasn’t removed the need of having an actual accountant as well – it has made the bookkeeping and day-to-day tasks a lot more enjoyable and easy though.

    The expense is definitely worth it, and of course the very generous referral programme means that you get 10% off your subscription every time you refer a new customer. …which is why I shall add my referral code here, in case your readers want to make use of it: 3wwldv5i (or direct link:

  3. I’m a big fan of Freeagent. I admit this is partly because of its ease of use and partly because the people are so friendly and helpful.

    My cloud option is Google Docs. For a one man band with very simple accounts it’s a great option. Simple, with the functionality you need without the complication of Excel. And it’s free.
    Rosie Slosek recently posted..3 reasons cake belongs with bookkeepingMy Profile

  4. Thank you all for your comments.

    I’ve not been able to reply until now as I’ve spent the morning giving a Cloud Computing training course which is one of my favourite activities.

    This is because when I start the course I have a room of participants who, mostly, don’t really know much about cloud computing but by the end they’re all enthused about the very real benefits available for their businesses.


  5. Having got very fedup with Sage, I tried a dozen online accounts software packages and after comparing price, contract and easy of use, we went for Kashflow. It has been so easy to you, the support is great and we even got a discount price for life. If you want a fre trial and also a discount for life click here – Clive

  6. An excellent option is SlickPie( free web based accounting software, for my business. It saves tons of my time because it’s a very simple tool for an effective invoice management. I also set up automatic recurring invoices for my regular clients and an automatic reminder to late payers, auto data entry tool – MagicBot and more.

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