Cloud Accounting Questions
FAQ's All About Cloud Accounting Software
Xero is an online accounting software that is used predominantly by small businesses. It is used for bookkeeping and accounting functions such as invoicing, payroll, account statements, credit notes, expenses, purchasing, inventory, financial management, payment processing, cash flow tracking, pensions and more.
It can also be used for VAT returns and can be connected to a live bank feed – meaning you can essentially do the majority of your basic accounting tasks within this software.
Additionally, it can be accessed anywhere – even on the go with a handy mobile app.
It is a helpful system that should be used in conjunction with an accountant – it shouldn’t replace all of your accounting and bookkeeping needs.
Xero is very modern and straightforward compared to classic accounting systems and can be picked up quite easily. The software itself offers a variety of learning programmes to help ensure businesses get the most out of this software.
These are:
- Xero advisor certification
- Xero Payroll certification
- Become a Xero Tax specialist
- Use Xero to run your business
- Move to Xero from another system
- Set up accounting and processes in Xero
- Use Xero add ons in your business
And more! Whether you’re a complete beginner at using accounting software or you’ve been using it for years and want to take it to the next level and streamline your accounting to be even more convenient, there is likely to be a course or learning programme to suit you.
Xero also hosts various helpful webinars too.
There are plenty of different accounting software to choose from and what works best for some companies may not work best for your business. Essentially it boils down to your business’s budget and needs!
Some of the most popular alternatives to Xero are:
These are recommended as most similar to Xero in terms of features and price, but there’s also the option of software like Synder.
If you’re unsure of what software is best for you, take time to do your research. Many accountants can offer advice on what software works best for your company’s particular needs, and many accountants also have the preferred systems that they already use and can get you set up on.
Xero accounting isn’t free, but it does allow businesses the opportunity to try it free for 30 days and access all the features before deciding what plan suits them best.
The price plans are:
- Starter for £10 a month
- Standard for £24 a month (their most popular plan)
- Premium for £30 a month
What type of price plan is best for your business again depends on your needs and the size of your business.
The starter plan, for example, is ideal for sole traders, new businesses and self-employed. The standard plan is best for growing small businesses – and the premium plan is designed for established businesses of all sizes.
This depends on your business needs.
Both Xero and Sage are really user-friendly and offer cloud-based features which are perfect for small businesses through to big.
More importantly, both software offer easy training programmes to help you get the best out of the systems. Sage E-learning courses range from Your First Pay Run In Sage Payroll to Sage 50 cloud Accounts Certification, whereas Xero offers Set up accounting and processes in Xero and Use Xero add ons in your business.
So both are easy for beginners and are designed to help businesses of all sizes. Though one may seem easier than the other, in reality, both have training programmes to ensure using them is easy and straightforward.
QuickBooks is an online software that offers simple and smart accounting alongside expert support – all in one place. The software includes features like invoices, expenses, VAT, taxes, time tracking, payroll and even HMRC self-assessment. With it, you can also link to systems like PayPal or GoCardless for payments, as well as Making Tax Digital.
Like most other accounting systems, QuickBooks offer different pricing and packages based on your company’s needs.
Here’s a quick look:
- Simple Start is £12 a month for sole traders or small businesses who need to manage VAT and Income Tax
- Essentials is £20 a month for small businesses working with suppliers who need to manage VAT and Income Tax – with up to three users
- Plus is £30 a month for businesses managing projects, stock, VAT and Income Tax – with up to five users.
It’s also worth mentioning that at the time of writing, all plans are currently 50% off for four months. The above prices are based on pricing after the four introductory months.
QuickBooks is an online accounting system used by small businesses to deal with a variety of accounting services. QuickBooks offers set up and support and:
- Everyday admin such as Managing income and expenses, sending ‘pay-enabled’ invoices, connecting your bank, forecasting cash flow, snapping and sorting receipts, tracking mileage, creating estimates and quotes, running customised reports, managing bills, doing business in 145+ countries and tracking stock.
- Tax activities such as preparing self-assessment, getting income tax estimates, checking VAT for errors, submitting VAT to HMRC, calculating and submitting Construction Industry Scheme paperwork
- Employee and project management such as tracking employee time, seeing project profitability, and setting budgets
QuickBooks offers the overall services most companies would need when it comes to accounting and often goes hand in hand with outsourcing for an accountant. It’s worth noting that although QuickBooks is ideal for admin and accounting tasks, there’s only so much it can do.
If you’re a small business looking to grow, for example, an accountant will offer advice on business transactions and financial management. Experience and advice are things you won’t be able to find on QuickBooks (or most other softwares either).
QuickBooks presents its own positives and challenges. QuickBooks is more comprehensive than other accounting software for small businesses, but it isn’t necessarily difficult. If you or your business are already familiar with accounting software then you’ll certainly find it easy.
QuickBooks does offer some video tutorials on the basics of the software to get you started, as well as a dedicated platform to offer users additional training. There are plenty of tutorials to find online to help you get to grips with the system too.
However, as with most things, the more practice you have using the system, the easier you will find it.
There’s not a whole lot of difference between Xero and QuickBooks – both offer great selling points and variations of the same features.
However, one clear difference is that Xero includes fixed asset management in all plans – whereas QuickBooks Online requires downloading a third-party add-on or manually setting up an asset account.
Xero also offers integrations with more than 1,000 apps – QuickBooks only offers 650.
QuickBooks is also predominantly better known in the US – and is one of the most popular choices in the US. Xero is more recognised outside of the US and within the UK.
This could be something to consider if you’ll also be outsourcing to an accountant – as you’ll want them to have experience of the system at hand.
When it comes to choosing either Xero or QuickBooks based on price, it depends on what plan your business needs.
Xero’s most basic plan – the Starter Plan is just £10 PCM, whereas QuickBooks Simple Start plan is slightly pricer at £12 PCM.
Xero’s middle plan – Standard – is £24 PCM. QuickBooks middle plan, Essentials, is £20 PCM – £4 cheaper.
Both software’s most expensive plans work out at £30 a month!
Additionally, both offer a 30-day free trial, but QuickBook also offers 50% off for the first three months.
So to conclude, as a sole trader or a small business, the cheapest option would be Xero. If you’re a slightly bigger business, you’ll find QuickBooks is the most affordable choice.
Quickbooks, Xero or FreeAgent: which is the best accounting software for your business?
Before you take a look at what software is best, it’s a good idea to first sit down and establish what your company needs from accounting software – what is essential, what you can take or leave and what isn’t necessary. You’ll also want to have a budget in mind.
At the basis of it, all three offer the basic accounting features that any business would need – from invoices and reporting to bookkeeping and client onboarding.
FreeAgent, for example, is generally more simplified and easy to use out of the three – meaning it’s ideal for SME’s or sole traders who just want the basics.
Xero is the best for integrating fixed asset management and lots of apps, whereas Quickbooks can help with tax assessment and even submit VAT to HMRC.
If you’re really struggling to decide, try talking to your accountant. They’ll know which system is best for you and your business needs.
FreeAgent helps small businesses with their accounting and bookkeeping needs. Some of the features that FreeAgent includes is:
- Estimates
- Invoicing
- Expenses
- Projects
- Time tracking
- Payroll
- Banking
- Cashflow
- Accounting
- VAT
- Self-assessment
- End of year filing
FreeAgent also offers additional add-ons such as finding an accountant, integrations and small business insurance.
This particular software is designed for small businesses, startups or sole traders.
Yes – FreeAgent is a cloud-based accounting software. FreeAgent is aimed at helping small businesses keep on top of their bookkeeping and accounts records.
This is actually a great feature – cloud-based software means it is continually up to date which is really helpful for things like chasing invoices, sorting through financial records or updating contacts.
Because it is cloud-based, it also means that FreeAgent can be used anywhere, at any time – on any device. So, for example, if you’re travelling to a business meeting and someone at the office has a question about an invoice, you can easily log on and find their answer – even when you’re not physically in the office.
Most modern accounting software is cloud-based.
FreeAgent was actually designed for small businesses which makes it one of the easiest accounting software to use. In fact, it even won Best Small Business Accounting Software at Accounting Excellence Software Awards in 2020!
What makes it so easy to use is that it was designed with small businesses in mind which means many processes within the software are streamlined to be as simple as possible.
For example, FreeAgent auto-populates most of your tax return for you, allowing you to file directly to HMRC – without even leaving the software.
It can also automatically generate MTD-compatible VAT returns and give instant access to financial reports. You can do pretty much everything in one place.
This means no more time wasted scrambling about trying to round up year-end reports mere days before your VAT return is due!
FreeAgent is owned by NatWest Group and was acquired by them in 2018. FreeAgent states that they ‘remain operationally independent of the group.’
However, one benefit is that NatWest business current account holders can then access FreeAgent in full for free.
Anyone with a business account with Royal Bank of Scotland can also benefit from free access to FreeAgent.
You don’t need an accountant with FreeAgent as it is designed to be as simple as possible for SMEs. Most of the sign-up process is relatively simple and there are plenty of in-depth training videos to help every step of the way.
However, for financial advice or future financial planning, it would be worth outsourcing to an accountant. FreeAgent is great at dealing with invoices or digital paperwork, but at the end of the day, it is just a piece of software.
There’s also the matter of changing legislation and accounting standards or planning for big business changes – in cases like this, it’s always helpful to have an accountant to hand, especially as it’s quite time-consuming trying to stay on top of all the changes in the financial sector.
An experienced accountant can share plenty of advice on growing your business further.
FreeAgent VS Quickbooks – which is best?
It essentially boils down to what your business wants and what your needs are. Some companies have a dedicated accountant to hand and simply want to make the transition to digital accounting. In this case, things like submitting end of year tax returns are much easier as it’s all kept at your fingertips!
So if you’re just looking to digitize your paperwork and have an accountant that can help you with other areas of accounting (like financial advice for example), then QuickBooks may be the answer.
Though more expensive than the latter, FreeAgent has won awards and was designed with small businesses in mind. Therefore if you’re a sole trader or a start-up, for example, and you’re not yet ready to outsource and find an accountant, FreeAgent may be your best bet when it comes to accounting matters.
Like most accounting systems, Sage Accounting does a whole lot to manage your company’s accounting. It allows you to create and track invoices, track cash flow, take payments, record transactions, capture expenses and more.
It also offers payroll features and Sage HR – as a way to manage staff from wherever you want in the world.
Overall, Sage means you can stop flicking through old paper records lost amongst the office or filing away expense receipts.
All of these tasks – and more – can be done in one place online.
Sage also has a clear breakdown of what features are offered for different business sizes, as well as software specifically for accountants and bookkeepers.
Sage Accounting isn’t free – but it does offer different packages for different sized businesses:
Accounting Start is from £12 a month and offers popular features such as invoicing, tracking, automatic bank reconciliation, VAT support and access to Making Tax Digital Ready.
Accounting Standard is from £24 per month and offers the above features, plus: unlimited users, CIS, advanced reporting, quotes and estimates, cash flow forecasting, purchase invoices and three months free access to AutoEntry.
Accounting Plus, from £30 a month, again offers all of the above – and allows businesses to invoice in multiple currencies and inventory management.
Each package offers a 30 day free trial.
Simply put, Sage 50 is a desktop solution/version which is also more detailed than Sage Accounting. A little more suited for established businesses, Sage 50 features stock control, sales order processing, purchase order processing, project processing and in-depth business reports. It is also not cloud-based.
Sage Accounting, on the other hand, is more suited for small businesses and offers core accounting. It offers simple to use software and features that small businesses will benefit from – without overwhelmingly complicated features for bigger businesses.
If you’re a small business or sole trader often needing to access software on the go, then Sage Accounting is perfect.
If your business is a little larger and thrives off desktop access with larger files and lots of requirements for reporting, then Sage 50 is more fitting.
Sage Accounting is one of the best software for small business owners or sole traders. It has a plethora of helpful features that you will actually use, such as:
- Invoice sending and tracking
- The ability to capture and store receipts in one place
- Taking care of tax and compliance, being HMRC approved software for Making Tag Digital
- Cash flow forecasting
- Payroll
Additionally, there are different packages designed for different business sizes and different products such as Sage HR (workforce management) and Sage People (HR).
As you can see, Sage Accounting offers features and products for all business sizes – meaning it’s a flexible software that you can stick with as your business grows and needs change.
