Top 5 best accounting software and invoicing packages in 2017

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Note: Our best accounts software round-up has been fully updated. This feature was first published in July 2014.

Where business is concerned, it goes without saying that keeping your finances in order is imperative. Not only is it necessary in order to ensure that invoices are sent out and paid on time and to help with forecasting cash flow, but detailed financial records are critical when the taxman comes knocking.

Fortunately, this is much easier than it used to be. Today's accounting software and invoicing packages are built for business owners, not accountants, which means there's no complicated jargon and you can be up and running in minutes. Cloud-based services let you monitor your business from anywhere on a range of devices, and there's no need to worry about backups because the provider will handle that for you, too.

There are many features to consider when choosing accounting software. Okay, you know you need invoicing, but what about quotes? Time tracking? Purchases, payroll, credit control and more? Every package has its own mix of features, and they're not always directly comparable. To save you trawling through free trial after free trial to find the package that's right for you, we've highlighted some of the best packages available to help you get started.

• Also check out our feature on everything you need to know about SMB accounting software and our best free accounting packages.

Price: $13.50 (around £10, AU$17) per month, paid annually

FreshBooks is a popular cloud-based accounting service designed specifically for small business owners.

The package has plenty of features – invoicing, expense tracking, time tracking, a host of business reports, even an option to take credit card payments (for a 2.9% transaction fee) – but a straightforward interface aimed at non-accountants ensures you'll be up-and-running right away.

Despite the simplicity, there's real depth here. You can bill in any currency, save time by setting up recurring invoices, allow customers to pay via credit card by checking a box, even automatically bill their credit card to keep life simple for everyone.

If you need more power, the system integrates with many other services, including PayPal, MailChimp and Basecamp, Gusto, Zendesk and more.

Management hassles are kept to a minimum. You're able to access and use the system from your desktop or its free iOS and Android apps, and because it's a cloud-based system there's no need to worry about backups.

If this sounds appealing, you can try FreshBooks for 30 days without using a credit card. Pricing after that is straightforward, as the only major difference between the accounts is your number of clients.

The baseline $13.50 (around £10, AU$17) per month (paid annually) covers you for five clients, $22.50 (around £17, AU$28.50) allows billing 20 clients and $45 (around £34.50, AU$57) covers you for a massive 500.

Price: From £10.50 (around $13.50, AU$17) per month

Intuit QuickBooks may have been around since the days of DOS, but the latest version is right up-to-date – it's an easy-to-use cloud-based suite for just about all your business needs.

Even the Essentials plan for £10.50 (around $13.50, AU$17) per month has plenty of features: invoicing, expense tracking, payment handling (with a 2.70% transaction free), plus it allows you to track and calculate VAT, and manage payroll and pensions for an extra £1 per employee per month.

Just like FreshBooks, there are a pile of apps to add more features: inventory management, Shopify integration, job scheduling, CRM and more. These can be expensive – many services cost more than QuickBooks itself – but there are exceptions. Add GoCardless, for instance, and you're able to set up and take regular Direct Debit payments from customers for a mere 1% transaction fee capped at £2 – and there are no sneaky setup charges or other hidden extras.

Overall we'd usually prefer FreshBooks, but there's plenty to like about QuickBooks, too, and with free trials available it's easy to try them both.

Price: From $10 (around £8, AU$13) per month

Xero might grab your attention with its low $10 (around £8, AU$13) per month Starter account but look closely and issues soon appear. Like being limited to sending a maximum of five invoices, enter five bills, or reconcile only 20 bank transactions.

Still, if you can live with those restrictions there are some pluses here. The service offers smart expense tracking and management, optionally on your mobile with Xero's excellent app for Android and iOS. There are dozens of configurable reports, simple budgeting, and no limits at all on users or the accountants you might want to access the data.

If the invoice, bank or billing issues are a problem then the Xero Standard plan looks like a better deal. It's a lot more money at $22 (around £17, AU$28) per month, but you can issue as many invoices as you like, and there's a capable payroll system for some locations, with time and attendance tracking for up to five employees (free for three months and then £5 per month).

One disappointment is the shortage of support for multiple currencies, which only arrives if you sign up for Xero Premium ($27.50 per month – that's around £21, AU$35).

Xero offers plenty of functionality, including a handy "convert your QuickBooks files" service to help you get started, and it's certainly easy to use. But if you don't quite need all that power, there's better value to be had elsewhere.

Price: From £10 (around $13, AU$16.50) per month

Sage One makes a good first impression with its clear and straightforward pricing. There's no lengthy list of complicated plans, no paying for major features you'll never use, just a single accounting product with add-ons such as payroll available if you need them.

If you actually need a lot of functionality, this can be a problem. Subscribing to FreshBooks gets you payment handling thrown in, for example, and it's easily enabled in a few seconds. Sage One can also take credit card and direct debit payments, but this is hidden away in a Sage Pay add-on which you must find yourself and open separately.

Still, there's no doubt that the core Sage Accounting offers good value. Just £10 (around $13, AU$16.50) per month (for the first three months, rising to double) gets you modules to manage quotes, invoices, handle and submit VAT online, smart bank feeds and reconciliation, cash flow forecasting, some detailed reports, multiple currency support, project tracking and more, all available from your desktop or via a mobile app.

All this is well presented and generally easy to use. If you run into trouble, detailed web help and video tutorials are only a click or two away (take a look yourself to get a feel for what's involved).

Sage also offers a basic Start account. This has no quotes or invoicing, just core essentials like cost and income management, customer and supplier records and bank feeds, but it's only £3 (around $4, AU$5) per month and could be enough for sole traders.

Price: From £7 (around $9, AU$11.50) per month

Getting started with an accounting package (or switching from one to another) can seem like an intimidating and complicated task, but KashFlow goes to unusual lengths to make it easy.

Support for importing data from QuickBooks, Sage or Excel gets you up to speed quickly. The interface is straightforward, there's no accounting jargon to catch you out, and there are various invoice and other templates which you can start using right away.

The program has plenty of functionality to explore, covering all the key areas you'd expect. You can manage customer and supplier details, record and automate purchases, create quotes and estimates, convert them to invoices as required, automatically import your bank transactions, and have the system automatically alert you of late payers, and even print out reminder letters for the worst offenders.

KashFlow is a UK business, which means plenty of benefits for UK-based users. The package doesn't just calculate VAT figures, for instance – it produces VAT Returns and EC Sales lists, and can file them directly to HMRC from within the program.

KashFlow's £7 (around $9, AU$11.50) per month Starter account has some big restrictions – namely a maximum of 10 invoices and 25 banking transactions per month, single currency only – but otherwise seems very capable to us.

We think most people will prefer the £13 (around $17, AU$21.50) per month Business account, which removes the limits and can integrate with 85+ other systems and services (WorldPay, PayPal, stripe, GearShift, Dropbox and more). Alternatively, spending £18 (around $23, AU$30) per month gets you a capable payroll system for as many employees as you need – there are no extra charges per person.

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