Would it surprise you to learn that less than 60% of UK small businesses use accounting software?
By law, businesses must keep accurate, complete records of their income and expenses/costs, so that they can reliably complete their tax returns. The remaining 40% of small businesses use spreadsheets, manual records or a combination of both.
So, why don’t more small businesses use accounting software? It can provide a wealth of benefits to business owners and small private landlords. Various myths, misconceptions and phobias are a factor, while some simply don’t realise how accounting software could benefit them. So, if you currently don’t use accounting software, here are six perfectly good reasons why you should start…
1 Accounting software is cheaper than you think
Small businesses and small private landlords must minimise their costs if they are to maximise their profits. And you should never buy things unless there is a valid business reason, because it just adds unnecessary pressure to your cash flow. If you don’t need it, don’t buy it – it really is that simple.
You may think accounting software would cost a few hundred quid a year or more. However, a monthly subscription can cost less than £15 a month, which is significantly less than the price of one take-away coffee a week. And it can be claimed as a tax expense, so accounting software needn’t be an additional cost at all.
Top tip!
Decide what functionality you really need from your accounting software and consider recommended options. Don’t pay more for additional “bells and whistles” features that you’re never going to use.
New tax year – new you
You can file your self-assessment from the 6th April. Know your tax owed and start the tax year in control.
For self-employed individuals, sole traders, or those with non-PAYE income, GoSimpleTax provides direct self-assessment filing with HMRC, offering helpful hints and savings tips throughout the process. Let GoSimpleTax handle all calculations.
2 Accounting software is easy to use
Many small-business owners and landlords are put off accounting software because they think you need to be an accountant to use it. Not true. Many business owners and landlords with very basic knowledge use accounting software. The best accounting software is remarkably easy to use – you certainly don’t need to be an accountant or bookkeeper. Even if you have never used it before, you’ll be able to quickly learn what you need to know, to get what you need from your accounting software.
Top tip!
When considering accounting software options, find out what level of onboarding and customer support you’ll get. If you get stuck, you should be able to quickly get the support you need to overcome any problems/challenges.
3 Accounting software saves effort
Accounting software automates many tasks, meaning key figures are worked out for you, which will certainly make your life much easier when it comes to completing your tax returns. Accounting software can also be linked to credit card or business bank accounts, so that income and expenses are automatically entered after they reach or leave your account. Accounting software often comes with free invoicing capability, too, so you can produce invoices and chase payments when overdue.
Need to know!
Accounting software can also make it much quicker and easier to judge how well your business is performing, as well as organise and assess your expenses. IT can also help you to keep your cash flow healthy.
4 Accounting software saves time
Because so many tasks are automated or made far easier by accounting software, you can save lots of time, certainly when compared to manual bookkeeping. This means you need to spend less time doing your books, freeing you up to get on with things that you enjoy or that contribute more value to your business.
Need to know!
Investing in the right accounting software could be a real game-changer as regards your time and workload, with many tedious tasks made easier and quicker, saving you lots of time and money.
5 Some accounting software comes with a free trial
Why not try before you buy? Many providers offer a free, no-obligation trial, so you can get a better idea of how their accounting software works and how quick and easy it is to work with. A free trial provides you with the no-risk, no-obligation way to road test accounting software features, functionality and performance in realistic scenarios, before you commit to a subscription. If you’re not impressed, explore other options.
Need to know!
Read online reviews on Trustpilot and other platforms when comparing accounting software options. Find out not only what other users think, but also how providers respond to feedback, good and bad.
6 Making Tax Digital for Income Tax is coming soon
Making Tax Digital is a major government initiative to digitise the UK tax system. About 780,000 sole traders and landlords with a gross trading/rental income of more than £50,000 will be impacted by brand new MTD for Income Tax rules from 6 April 2026, with a further 970,000 impacted from April 2027 and many more (£20,000-£30,000 gross income) from April 2028.
- When impacted, sole traders and landlords must maintain accurate, regularly updated digital records of their income and costs, with summaries needing to be reported digitally each quarter to HMRC.
- You can either use MTD-compatible accounting software that enables digital reporting or “bridging software” that enables MTD reporting using your existing digital record-keeping solution. Paper records will no longer be an option.
- Following the fourth quarterly update, sole traders and landlords must then make a final declaration, confirming that the information they’ve provided is accurate and complete.
If you’re already using accounting software, you shouldn’t be worried about MTD for Income Tax, providing it’s MTD compatible. If not, get software that is. If you’re not already using accounting software, you really should start doing so as soon as possible, so that MTD recording and reporting isn’t a drama for you.
Need to know!
There will be fines for non-compliance with MTD for Income Tax. Very few people will be granted exemption and compliance isn’t optional. To comply with recording and reporting requirements, you must have the necessary accounting software and know how to send summaries digitally to HMRC.
Copyright 2025. Sponsored post by Mike Parkes of GoSimpleTax - tax return software that can help you manage your self assessment.