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Making Tax Digital (MTD) is a UK Government and HMRC ambition to help businesses do their taxes accurately and efficiently. One of the best ways of making this a reality is through bookkeeping and accountancy software. We get it – you don’t want to spend a fortune on monthly bookkeeping memberships. The good news is there are free accountancy software packages you can use. And they’re fantastic!

What Is Bookkeeping Software?

Bookkeeping software, also referred to as accountancy software, is something that every business should have. A way of taking the pain out of tax administration, bookkeeping software helps to record and process the transactions your business carries out over the tax year.

Exactly what’s included depends on the software you choose, but could typically feature billing, invoices, statements, tax filing, financial reporting and payroll.

The benefits you could receive from using bookkeeping software includes:

  • Reduction of manual errors
  • Save time
  • Rapid and automated processing
  • Access business performance analytics
  • Secure data storage
  • Greater range of reporting
  • Centralised data
  • Remote access (for software that uses cloud storage)
  • Smoother cooperation with your accountant

If all of this sounds interesting, you might be wondering about the cost. There are certainly lots of packages in the market for various price points, but there are also lots of excellent bookkeeping software options which are completely free of charge.

We’re now going to look at a selection which represents some of the best free bookkeeping packages available.

The Best Free Accountancy Software UK

1.      GnuCash

Completely free to use, with customers not enticed to upgrade to a premium service, GnuCash is a comprehensive and functional piece of bookkeeping software. Unlike many other packages, it’s not cloud-based but an open-source software. This is its greatest asset, and its greatest flaw.

As open-source, anyone can correct errors or add new functionality making it particularly flexible.

The downside is that there’s no mobile application and that you’ll need to download the software to be able to use it. GnuCash is functional, if not very pretty, but there is better free software on the market for a business that’s looking for flexible applications.

2.      Wave

With more than two million users, Wave has been a huge hit with the business community, particularly freelancers, sole traders and small businesses. It provides unlimited invoicing, accounting and receipt tracking and it’s renowned for its intuitive design.

Although it’s free to use the basic functions, you won’t be able to access payroll services unless you upgrade. It’s also designed primarily for users in the US. If you want to use Wave for online transactions, you’ll be slapped with a pay-per-use cost which can quickly mount up and become expensive.

3.      Pandle

Pandle is cloud-based accounting software which has been designed specifically to meet the needs of small businesses. You’ll be able to carry out a wide range of accounting activities including creating customer statements, invoices, payment reminders and recurring transactions. The software is UK VAT-ready and supports multiple currencies and no limits on data, customers, suppliers or bank accounts.

When you sign up, you’ll be given access to a Pandle Pro account for free for 14 days which also includes premium templates, cash flow forecasting and projects. After 14 days you’ll revert to the free software unless you choose to upgrade. There’s no cap on the use of Pandle Free, and many businesses find this is all they need for their bookkeeping.

4.      QuickFile

Loved by freelancers and small business alike, QuickFile is a piece of cloud-based software which makes it simple to import transactions and information. By hooking up with more than 300 web services and 50 banks, it’s a convenient tool, made even better by the ability to upload receipts on the go. You can file your VAT returns directly using this software and it’s compatible with multiple currencies, should you need the facility.

QuickFile is completely free to use (unless you upgrade). However, you will have to put up with adverts, and you’ll only be able to use the free service if you have less than 1000 ledger entries per year.

5.      ZipBooks

Well-known in the industry and with an excellent reputation, ZipBooks is a great solution for small businesses. Based in the cloud, it offers the ability to manage an unlimited number of customers and produce as many invoices as you want.

Although it’s intuitive and simple to use, the free package is quite basic. You’ll only be able to connect a single bank account and access simple reporting functions. To get the most useful features from ZipBooks, you’ll need to upgrade.

6.      FreeAgent

Another industry heavyweight, FreeAgent is used by tens of thousands of businesses in the UK and won the award for Small Business Accounting Software of the Year in 2018. A quick look and it’s not hard to see why. Scratch the surface and you’ll find powerful, cloud-based software that generates insightful analysis on profit and loss, as well as automating VAT returns. It can even assist with the majority of your self-assessment tax return. Impressive stuff!

The downside is that it’s only free if you’re a customer of NatWest/Royal Bank of Scotland. In addition, as the software is linked to the bank, it means they will have full access to every aspect of your business records whenever they want.

7.      Adminsoft Accounts

A software solution designed by a small business owner specifically for small businesses, Adminsoft Accounts is simple yet comprehensive. The system is set up in a way that means you don’t need a background in accounting to navigate around, and it’s so successful it’s been downloaded more than 300,000 times. As a service that’s 100% free, you’ll get a double-entry accounting system, purchase order processing, stock control, payroll and some limited HR function.

It’s a substantial package that has a lot to offer, but you’ll have to put up with the inconvenience of adverts. The other downside is that it’s only available for Windows, so if you’re on another platform, you’re out of luck.

8.      Bokio

Made in Sweden but rolled out for UK businesses, Bokio is another solid option for small to medium sized businesses looking for a free MTD solution. It is cloud-based so you know your bookkeeping records are always backed up, and it will connect to your UK bank account to ensure seamless automatic updates to your tax records.

Arguably the best aspect of Bokio compared to some of the other free software above is the invoicing features. Even with a free account, you can still create bespoke invoices by choosing colour themes and adding your logo. The software will then create reports based on your invoicing to help you stay on track of your cash flow and what you are owed.

Our Favourite Free Accountancy Software?

Whether you’re a freelancer, entrepreneur or small business, there are a substantial number of free bookkeeping software options that could be a real asset.

There are pros and cons to each one, but we think the stand-out performer for free accountancy software is Pandle.

Designed to be simple, the interface is intuitive and attractive, enabling you to retrieve information at a glance. The free package is crammed with features including advanced functions such as VAT submissions, multiple currencies and bulk editing. With unlimited data, invoicing and customers, Pandle can grow with your business, so once you’re set up you won’t need to worry about switching again, and as a Pandle Accountant, we can support you all throughout.

Choosing a bookkeeping software solution can seem like a big move, but once you’ve made your decision, you’ll have the benefits of faster, more accurate processing and your only regret will be not doing it sooner.