The Software Your Business Actually Needs
Walk into any software comparison website and you'll find hundreds of options for everything from accounting to project management. It's overwhelming.
Here's the good news: most small businesses need far less software than vendors want to sell you. This guide cuts through the noise and helps you identify what you actually need—and what's just nice to have.
According to the Federation of Small Businesses, UK SMEs spend an average of £1,200-2,400 per year on software. That's not insignificant, so it pays to choose wisely.
The Essentials: Software Every Business Needs
Accounting Software
This isn't optional. You need to track money coming in and going out, manage invoices, and prepare for tax. Trying to do this in spreadsheets creates problems.
Top choices for UK small businesses:
Xero (from £15/month)
- Most popular with UK accountants
- Excellent bank feed integration
- Good for growing businesses
- Strong app marketplace for add-ons
QuickBooks (from £12/month)
- Similar features to Xero
- Often cheaper for basic needs
- Good if your accountant prefers it
- Simple interface
FreeAgent (from £14.50/month, free with some banks)
- Designed specifically for freelancers and small businesses
- Very user-friendly for non-accountants
- Included free with NatWest, Mettle, and some other bank accounts
- Limited for larger teams
Sage Business Cloud (from £12/month)
- Long-established, trusted brand
- Good for businesses that might grow larger
- More traditional interface
- Strong payroll integration
According to Sage's 2024 UK Accountant Survey, 89% of UK accountants now prefer working with clients who use cloud accounting software. Your accountant's preference matters—ask them.
Email and Productivity
You need professional email (yourname@yourbusiness.co.uk) and basic tools for documents and spreadsheets.
Microsoft 365 Business Basic (£4.90/user/month)
- Professional email with your domain
- Web versions of Word, Excel, PowerPoint
- 1TB cloud storage per user
- Microsoft Teams for video calls
- Best if: your team uses Microsoft Office regularly
Google Workspace Business Starter (£5.20/user/month)
- Professional Gmail with your domain
- Google Docs, Sheets, Slides
- 30GB cloud storage per user
- Google Meet for video calls
- Best if: you prefer simpler tools and lots of collaboration
Both are excellent. Most small businesses do fine with either. The choice often comes down to personal preference and what you're already familiar with.
Banking and Payments
Your bank probably has an app. For taking payments, you need something more.
Card payments:
SumUp (1.69% per transaction, free reader)
- Simple and cheap for in-person payments
- No monthly fees
- Reader costs nothing to start
- Good for low-to-medium volume
Square (1.75% per transaction)
- Excellent free point-of-sale system
- Good inventory management
- Online store included
- Best for retail and hospitality
Zettle by PayPal (1.75% per transaction)
- Integrates with PayPal
- Good hardware options
- Reliable and well-supported
For online payments, Stripe (1.4-2.9% + fixed fee) integrates with almost everything and is the standard choice.
The Important (But Not Urgent) Category
These tools help when you have specific needs, but don't rush into them.
Customer Relationship Management (CRM)
A CRM helps you track customers, sales leads, and interactions. You need one if:
- You have multiple salespeople
- Your sales cycle is longer than a quick transaction
- You struggle to remember customer history
- You're losing leads because nobody followed up
You probably don't need one if:
- You have few enough customers to remember them all
- Sales happen quickly (retail, simple services)
- A spreadsheet genuinely works fine
Options:
HubSpot CRM (free for basics, paid from £15/month)
- Generous free tier
- Easy to use
- Good for growing into paid features
- Integrates with marketing tools
Pipedrive (from £14/user/month)
- Very visual pipeline view
- Focused purely on sales
- Good for sales-driven businesses
- Simple and not overwhelming
Zoho CRM (free for up to 3 users, paid from £12/user/month)
- Lots of features for the price
- Part of a broader Zoho ecosystem
- Good value but steeper learning curve
Project Management
You need project management software if:
- Multiple people work on the same projects
- You struggle to track what's done and what isn't
- Things fall through cracks regularly
- You manage client projects with deliverables
Options:
Trello (free for basics, Business from £10/user/month)
- Visual board-based system
- Very intuitive for simple projects
- Good free tier
- Limited for complex project tracking
Asana (free for basics, Premium from £9/user/month)
- More structured than Trello
- Good for teams with clear workflows
- Multiple views (list, board, timeline)
- Lots of integrations
Monday.com (from £9/user/month, minimum 3 users)
- Very flexible and visual
- Customisable for different business types
- Good for operations beyond just projects
- Can be overwhelming at first
Notion (free for individuals, team from £7/user/month)
- Combines docs, wikis, and project management
- Extremely flexible
- Great for knowledge management too
- Takes time to set up well
Communication (Beyond Email)
Slack (free for basics, Pro from £5.75/user/month)
- Excellent for team messaging
- Reduces email overload
- Good app integrations
- Can become distracting if not managed
Microsoft Teams (included with Microsoft 365)
- Messaging, video calls, file sharing
- Makes sense if you already pay for Microsoft 365
- More comprehensive but heavier than Slack
What You Can Probably Skip
Some software categories are oversold to small businesses:
HR software (unless you have 10+ employees)
Breathe or similar systems are great for larger SMEs, but most small teams can manage with spreadsheets and good record-keeping.
Marketing automation (until you have a significant email list)
Mailchimp's free tier or a simple newsletter tool is enough for most small businesses. Advanced automation is overkill until you have thousands of subscribers.
Enterprise features on any platform
Advanced reporting, AI features, and enterprise integrations are designed for large companies. Don't pay for what you won't use.
All-in-one platforms
Systems claiming to do everything (CRM, project management, accounting, marketing) usually do everything averagely. Best-of-breed tools for specific needs often work better.
Making Smart Choices
Before You Buy
Identify the actual problem
What specific issue are you trying to solve? If you can't articulate it clearly, you might not need new software.
Try free tiers and trials
Almost every business tool offers free trials or basic free tiers. Use them properly before committing.
Ask your accountant or bookkeeper
They often know what works well for businesses like yours. Their software preference for accounting matters especially.
Check integrations
Will the new tool work with what you already use? Integration problems create headaches.
Avoiding Common Mistakes
Don't buy based on features you might use "someday"
Start with the cheapest tier that meets current needs. Upgrade when you actually need more.
Don't underestimate learning time
New software takes time to learn and configure. Factor this into your decision—sometimes simpler is better.
Don't ignore the total cost
Per-user pricing adds up. A £10/user/month tool costs £600/year for a five-person team.
Don't forget about support
When something goes wrong, how easy is it to get help? Check reviews about customer support.
Building Your Software Stack
Bare Minimum (Under £30/month)
- Accounting: FreeAgent (free with compatible bank) or Xero Starter (£15)
- Email: Google Workspace Starter (£5.20/user)
- Card payments: SumUp (pay-per-transaction)
- Total: Under £30/month for a one-person business
Small Team Setup (£100-200/month)
- Accounting: Xero Growing (£33/month)
- Email & Office: Microsoft 365 Business Basic (£4.90/user × 5 = £25)
- Project Management: Asana Premium (£9/user × 5 = £45)
- Communication: Slack free tier or Teams (included)
- Card payments: Square (pay-per-transaction)
- Total: Around £100-150/month
Growing Business (£200-400/month)
Add:
- CRM: HubSpot or Pipedrive
- Better accounting tier with more users
- Premium features on project tools
- Proper marketing email platform
The Bottom Line
The best software stack is the simplest one that actually solves your problems. Start with the essentials (accounting and email), add tools only when you have a genuine need, and never pay for features you won't use.
Every hour spent learning or managing software is an hour not spent on your actual business. Choose tools that are genuinely useful, not just impressive.
The software industry wants you to believe you need more than you do. Most successful small businesses run on surprisingly few tools, used well. Start there.
