Cloud accounting software keeps your books up to date as you go, saves time on admin and gets you ready for Making Tax Digital. If you're still using spreadsheets, desktop software or a carrier bag of receipts, here's what moving to the cloud involves.
1. Choose the right software
The main options for small businesses are FreeAgent, Xero and Sage. FreeAgent is often a great fit for sole traders, freelancers and small limited companies. Xero offers more flexibility and add-on apps for growing businesses. Sage is a long-established name, and if you already use it, staying put may be the right call. Depending on who you bank with, FreeAgent may be included free with your business bank account.
2. Pick a sensible start date
The cleanest time to switch is the start of your financial year or, if you're VAT registered, the start of a VAT quarter. That keeps each period's records in one place. You can switch at other times; it just takes a little more care.
3. Bring your figures across
Your new software needs opening balances: what you had in the bank, what customers owed you and what you owed suppliers on the start date. Your accountant can provide these from your last accounts.
4. Connect your bank and set up invoicing
Bank feeds bring your transactions in automatically, so you only need to check and categorise them. Set up your invoice templates and you can send invoices, and see who has paid, from your phone or computer.
5. Learn the routine
A little time each week keeps everything up to date. Good training at the start makes all the difference.
Ready for Making Tax Digital
VAT-registered businesses already have to file VAT returns through compatible software, and Making Tax Digital for Income Tax started on 6 April 2026 for sole traders and landlords with qualifying income over £50,000, falling to £30,000 from April 2027 and £20,000 from April 2028. Cloud software is the simplest way to comply.
How we can help
We're FreeAgent Gold Partners and work with Xero, Sage and IRIS. We can advise on the right package, implement the system and train you and your staff. One client, Angela Fisk of Fisk Mortgage Services, told us: “I am now using FreeAgent which again has been life changing for us & so easy to use!”
Find out more about our cloud accounting service, or if you're thinking of changing accountant at the same time, we can do both at once. Call 01355 708410 or book a free consultation.