Although one of the more expensive solutions on the market, we're inclined to think that Xero might be worth the money. It's feature rich, easy to use and VAT ready. A 30 day free trial is available and thereafter the cost is £20/month + VAT for unlimited users. The setup process is an easy step-by-step affair. After this, the main screen is the Dashboard which is easy to understand. Navigation is straightforward, using tabs at the top of the screen or links through the screen itself. We found it very easy to get to where we wanted to go.

Sales and purchase invoices, the raw data for the package, are almost identical. Invoices, whether for products or services, are easy to create and the figures can be entered as VAT inclusive or exclusive. A credit note can be created directly from an unpaid invoice or from scratch. If a credit note is allocated to an invoice, it is shown as a deduction on the invoice, making the amount left to pay very clear within the system as well as to the customer. Repeating invoices can be created very easily in both sales and purchases. An existing invoice can be used as a template, making the process very quick to set up. Bulk payments are only available for purchase invoices.

Access to a very comprehensive help centre is available on every page. Just typing in what you want to know does result in a large number of links to various parts of the help centre, which could be frustrating, but if you choose “help for this page” you’ll find a step by step explanation of exactly what you want to know.

Xero supports bank feeds as well as being able to upload bank statements in ofx, qif and csv formats, a unique feature amongst its competitors. We uploaded our csv file without any problems. Once the bank statement lines are in Xero it’s quick and easy to match them to invoices or create cash transactions directly from them, whilst reconciling at the same time. In addition, Xero tries to help speed up the process further by suggesting invoices or transactions for you. These suggestions are usually correct.

The search features within Xero make finding invoices and transactions very easy. Digital copies of documents can be emailed, uploaded or dragged and dropped into a library within Xero. From there they can be attached to invoices, transactions, journal entries and contacts. They can also be attached directly without using the library area. Journals are an enabled feature but manual journals can only be created by users with an advisor status. Purchase orders are available, but there is no quotation module.

The VAT return report, for a VAT registered company, may well be the best on the market. It is set out exactly like a VAT return with an audit report attached so that it is very easy to find out how the figures were calculated. The VAT return can be submitted to the HMRC directly from Xero. The Profit and Loss report is detailed but uncomplicated. The default setting is the current month alongside the previous three months and the year to date figures. All the figures can be accessed directly to find out where they came from.

Overall Xero is very intuitive and enjoyable to use. It is flexible and capable of some fairly complex accounting procedures making it suitable for businesses of many types and sizes. The Help Centre is very detailed, with step by step explanations which are easy to understand a follow through, and the VAT and bank integration modules look to us to be better than any others out there.

Subscription – £20 + VAT per month for unlimited users


Software Interface

Cloud Accounting

Free Agent

FreeAgent is a feature-rich cloud accounting application which nevertheless has a few annoying omissions and interface issues. Its most unique feature, perhaps, is a customised account which recognises your status as a sole trader, partner or limited company.


Sage One

Sage One is an intuitive, easy to use piece of cloud accounting software which nevertheless lacks many of the features of its competitors.



QuickBooks is a piece of cloud accounting software full of useful features and reasonably easy to use, with a few hidden annoyances.



When it comes to features that you might expect from a subscription cloud accounting service, Kashflow ticks all the boxes, but we found it awkward and complicated to use.



One of the major advantages of Wave's intuitive and feature-rich cloud accounting software, is that it's free. Designed for small businesses, there is no trial period and it’s very easy to set up an account.