Help Guide for Accounting Tech Stack for UK Small Businesses

Why Your Accounting Needs a Stack

Modern accounting isn't just software that produces invoices. It's an ecosystem of connected tools that:

• Captures receipts automatically from photos
• Tracks expenses without manual data entry
• Reconciles bank accounts with live feeds
• Processes payroll and files with HMRC
• Produces reports for decisions and compliance
• Shares data with your accountant seamlessly

The right stack saves hours weekly, reduces errors, and gives you real-time visibility into your finances.

The Foundation: Core Accounting Software

Xero

Best for: Businesses wanting clean design, strong app ecosystem, accountant collaboration

Pricing:

• Starter: £15/month (limited invoices, no multi-currency)
• Standard: £30/month (unlimited invoices, multi-currency, projects)
• Premium: £42/month (all features plus expenses)

Strengths:

• Excellent UK bank feeds (direct connection to most UK banks)
• Beautiful, intuitive interface
• Strong app marketplace (1000+ integrations)
• Multi-currency handling
• Great for working with accountants

Weaknesses:

• Starter plan is restrictive
• Inventory management is basic
• Customer support can be slow

QuickBooks Online

Best for: Businesses wanting robust features, especially inventory and US/UK operations

Pricing:

• Simple Start: £12/month (1 user, basic features)
• Essentials: £24/month (3 users, bills, time tracking)
• Plus: £36/month (5 users, inventory, projects)
• Advanced: £76/month (25 users, advanced reporting)

Strengths:

• Powerful reporting
• Better inventory management than Xero
• Strong mobile app
• Good for businesses with US connections

Weaknesses:

• Interface feels busier than Xero
• Fewer UK-specific integrations
• Some features hidden in menus

FreeAgent

Best for: Freelancers, contractors, very small businesses

Pricing: £14.50/month (or free through some banks like NatWest/RBS)

Strengths:

• Simple, focused interface
• Excellent for self-assessment
• Self-employed tax estimator
• Free through partnership banks

Weaknesses:

• Limited scalability
• Fewer integrations
• Not suitable for larger businesses

Recommendation by Business Type

Receipt Capture: No More Shoeboxes

Physical receipts fade, get lost, and create compliance headaches. Digital capture solves this.

Dext (Formerly Receipt Bank)

Pricing: From £20/month

How it works:

1. Photograph or forward receipts to Dext

2. AI extracts date, supplier, amount, VAT

3. Categorises automatically (learns your patterns)

4. Pushes to Xero/QuickBooks

Strengths: Excellent accuracy, integrates deeply with accounting software, handles invoices too

Weaknesses: Price adds up, overkill for very low volumes

Hubdoc

Pricing: Included with Xero Standard/Premium

How it works:

1. Forward documents or photograph receipts

2. Auto-extracts data

3. Publishes to Xero

Strengths: Free with Xero, good integration, fetches bills from supplier portals

Weaknesses: Less feature-rich than Dext

AutoEntry

Pricing: From £10/month (pay-per-document plans available)

How it works: Similar to Dext, with competitive pricing on lower volumes

Strengths: Flexible pricing, good accuracy, works with Xero and QuickBooks

Weaknesses: Interface less polished

Recommendation

• Using Xero Standard/Premium? Start with included Hubdoc
• High receipt volume? Dext is worth the investment
• Budget-conscious? AutoEntry's pay-per-document model

Expense Management

For businesses with employees making purchases:

Pleo

Pricing: From £0 (Starter) to £10/user/month (Pro)

What it does:

• Prepaid company cards for employees
• Real-time spending visibility
• Receipt capture via app
• Auto-categorisation and sync to accounting
• Spending limits per card/user

Best for: Teams making frequent small purchases, reducing expense claims

Soldo

Pricing: From £5/user/month

Similar to Pleo with slightly different features. Worth comparing both.

Moss (Formerly Spendesk)

Pricing: Custom (typically mid-market businesses)

Features: Expense management, virtual cards, approval workflows

Basic Alternative: Accounting Software Built-in

Xero and QuickBooks both have expense claim features:

• Employees submit claims via app
• Manager approves
• Reimbursement tracked

Less sophisticated but included in your subscription.

Payroll

UK payroll is complex: PAYE, NI, auto-enrolment pensions, RTI submissions. You need proper software.

Xero Payroll

Pricing: From £5/month + £1/employee

Integrated with Xero: Journals post automatically

Handles: PAYE, NI, student loans, pensions, RTI filing

Strengths: Seamless if using Xero, clean interface

Weaknesses: Basic pension management, no HR features

QuickBooks Payroll

Pricing: From £6/month + £2/employee

Integrated with QuickBooks: Similar seamless experience

Handles: Same compliance requirements

Gusto (UK)

Pricing: From £5/month + £5/employee

Strengths: Modern interface, employee self-service, some HR features

Weaknesses: Newer to UK market

Standalone Options

BrightPay - From £99/year (flat fee)

• Powerful, popular with accountants
• Excellent value for larger employee counts
• Integrates with Xero, QuickBooks

Sage Payroll - From £7/month

• Long-established, reliable
• Good for complex payroll scenarios

Recommendation

• 1-10 employees, using Xero/QuickBooks: Use integrated payroll (simplest)
• 10+ employees or complex requirements: Consider BrightPay for value
• Growing team with HR needs: Look at combined HR/payroll solutions

Banking Integration

Bank Feeds

Automatic transaction import is essential. Both Xero and QuickBooks support:

• Direct feeds: Real-time connection to major UK banks
• Open Banking feeds: Connection via secure API
• Manual import: CSV upload for banks without feeds

Setup: Link your bank in Settings → Bank Accounts. Most UK banks support direct or Open Banking feeds.

Reconciliation

Daily reconciliation takes minutes:

1. Transactions import automatically

2. Software suggests matches to invoices/bills

3. You confirm or categorise

4. Bank balance matches accounting records

Tip: Reconcile weekly at minimum. Daily is better. Backlogs become painful.

Integrations Worth Having

Payment Processing

GoCardless - Direct Debit collection

• Integrates with Xero/QuickBooks
• Auto-reconciles payments
• Great for recurring billing

Stripe - Card payments

• Integrates with most accounting software
• Online payment links on invoices
• Enables "Pay Now" functionality

CRM Integration

Connect your CRM to push invoices and see payment status:

• HubSpot → Xero/QuickBooks (native integration)
• Pipedrive → Xero/QuickBooks (via apps)
• Salesforce → Various connectors

E-commerce

If you sell online:

• Shopify → Xero/QuickBooks (dedicated apps)
• WooCommerce → Integrations available
• Amazon → Various connectors

Time Tracking

For billable hours:

• Xero Projects (included in Standard/Premium)
• QuickBooks Time
• Toggl → Both platforms
• Harvest → Both platforms

Building Your Stack

Minimal Stack (Freelancer/Sole Trader)

Small Business Stack (1-10 Employees)

Growing Business Stack (10-50 Employees)

Working With Your Accountant

Advisor Access

Both Xero and QuickBooks allow you to invite your accountant:

• Read-only access: They can view but not change
• Standard access: They can make entries and adjustments
• Advisor access: Full access including settings

Best practice: Give your accountant proper access. Avoid sending exports—real-time access is far more efficient.

What Your Accountant Should Do

• Monthly/quarterly review: Check coding, reconciliation, adjustments
• Year-end: Prepare accounts, corporation tax, annual return
• VAT returns: Review and submit (or train you to do it)
• Strategic advice: Tax planning, business growth

What you should do: Keep transactions flowing, receipts captured, reconciliation current.

Authority Resources

• HMRC Making Tax Digital: gov.uk/guidance/making-tax-digital - Digital record-keeping requirements
• HMRC RTI (Payroll): gov.uk/running-payroll - Payroll reporting requirements
• The Pensions Regulator: thepensionsregulator.gov.uk - Auto-enrolment duties
• ICAEW Choose Your Software: icaew.com/technical/technology/software - Accountancy body guidance

Your Accounting Tech Checklist

Foundation

• [ ] Core accounting software chosen and set up
• [ ] Bank feeds connected and working
• [ ] Chart of accounts configured appropriately
• [ ] VAT settings correct (scheme, frequency)

Transactions

• [ ] Receipt capture system in place
• [ ] Expense process documented (if applicable)
• [ ] Invoice template set up with branding
• [ ] Payment methods enabled (bank, card, DD)

Payroll (If Applicable)

• [ ] Payroll software connected to accounting
• [ ] Employees set up correctly
• [ ] Pension provider integrated
• [ ] HMRC Gateway linked

Integrations

• [ ] CRM connected (if using one)
• [ ] E-commerce connected (if selling online)
• [ ] Time tracking connected (if billing time)

Accountant Access

• [ ] Accountant invited with appropriate access
• [ ] Agreed who does what (responsibilities clear)

Getting Started This Week

Day 1: Sign up for Xero or QuickBooks trial, explore the interface

Day 2: Connect your bank account and import transactions

Day 3: Set up receipt capture (Hubdoc if Xero, mobile app if QuickBooks)

Day 4: Create and send a test invoice

Day 5: Invite your accountant (or find one if you don't have one)

The best accounting stack is the one you actually use. Start simple, get the habits right, then add complexity as needed. A connected, well-maintained system beats a sophisticated one that's neglected.