You need the right accounting solutions for your company. That’s the case whether you’re an Amazon seller, running a freelance IT service business, have a small community cafe - or any other business, including not for profit organisations. Getting the right small business accounting product can make life much easier, leaving you free to focus on your customers and staff, instead of the paperwork.
Choosing the online accounting software that will work for you can seem like a daunting prospect. This article will help you compare the options, by highlighting some of the features of two of the most popular business accounting tools out there - Xero and Sage.
Sage has an impressive 35 year pedigree, with some 3 million customers¹ - while Xero offers smart solutions such as Xero payroll and the opportunity to integrate your Xero account with TransferWise, for easy accounting coupled with low price, secure and fast overseas payments. More on that, later.
Doing business overseas and need to make international business payments? TransferWise could save you money versus your bank.
When you have to pay employees or suppliers overseas it might seem logical to do this with your bank. You already have an account there, they have all your information, so it just seems easier. Although these are valid reasons, easier certainly doesn’t mean cheaper.
Most banks won’t convert your money with the mid-market exchange rate when you make an international payment. Instead they add a mark-up and charge you a hidden fee that way. TransferWise is different. Its smart technology skips hefty international transfer fees by connecting local bank accounts all around the world. Which means you can save up to 8x by using TransferWise rather than your bank when you send your money abroad.
TransferWise also has a lot of additional features for business users. You can connect with Xero to make your life easier, upload a batch of payments in one go or even automate your payments by integrating with our API. And there’s more to come in the future.
When you’re choosing business accounting software, you’ll need to invest time in understanding the different features and costs from a few providers. This should let you match up your business needs with the products which are out there. In reality, there is no single best accounting product for small businesses - but you’ll probably find that some suit you better than others based on your own needs and what you’re prepared to pay.
Once you’ve decided which accounting solution is best for you you’ll want to get started. With Xero you simply sign up online for the package of your choice. You’ll get a 30 day free trial initially, and can talk to the sales team easily using online chat, or email, if you have questions. You’ll also get 24/7 support to make sure you’re never stuck with any accounting issues.²
At the time of writing, Sage also offer a free 30 day trial for some of their accounting products. You can choose to use this, or simply buy the product you want from their online store. You’ll then need to register online before you can start using the software.
You may find that you’re eligible for some perks as a new customer, so it’s well worth checking out the packages and offers available when you’re ready to sign up to either Xero or Sage. At the time of research, for example, both Xero and Sage offered a 30 day free trial for some products, plus some extra discounts depending on the package you choose.
To get you thinking, here’s a handy Xero vs Sage pricing guide, to give you an overview of the pricing structures used for the key accounting products offered.
|Provider and package||Price you’ll pay|
|Xero - Starter||£10 + VAT/month - at the time of research, the opening offer gives new customers 6 months of half price fees, so £5/month|
|Xero - Standard||£22 + VAT/month - at the time of research, the opening offer gives new customers 6 months of half price fees, so £11/month|
|Xero - Premium||£27.50 + VAT/month - at the time of research, the opening offer gives new customers 6 months of half price fees, so £13.75/month²|
|Sage Business Cloud Accounting||At the time of research, these products were offered with deep discounts of 40-70%.³ Accounting Start - £10/month, with a 40% discount for 3 months making it £6 + VAT/month Accounting - £22/month, with a 70% discount for 3 months, making it £6.60 + VAT/month|
|Sage 50cloud - Essentials||£20+VAT/month (extra fee if you increase the number of users)|
|Sage 50cloud - Standard||£60+VAT/month (extra fee if you increase the number of users)|
|Sage 50cloud - Professional||£125+VAT/month (extra fee if you increase the number of users)⁴|
It’s worth noting that Sage offer a wide variety of products, and their fee structure can vary depending on the number of users, and the way you use the software. You’ll need to check the details online to customise the package for your own business.
Both Xero and Sage offer customers the opportunity to link their bank account and their accounting software, to keep track of day to day cash flow. Xero has direct connections with some UK banks, including HSBC, RBS, some Santander accounts, Natwest and Barclays, which makes it extremely simple to get access to your bank records. You can also link to other accounts using a third party system. This is effective, but requires a little more effort on the users part.
Sage offers bank feeds, but all of these are operated via a third party system, which means you need to do a little more work to get your day to day banking details.⁵
For many users, one big advantage Xero has over Sage is that you can link your TransferWise for business multi-currency account to Xero directly.
Connect your Xero account with TransferWise to sync your accounts, and manage your money online while you also access low price international payments using the google exchange rate. You’ll be able to hold your money in dozens of different currencies, making it easier than ever to deal with customers, suppliers and employees who are based abroad - saving even more time and money for your business.
Having a hard time deciding which accounting solution will work best for your business? Here are some key features of each product to consider.
With Xero you’ll be able to get a comprehensive step by step guide to invoicing, as well as using free Xero invoice templates to make professional electronic invoices for your business.⁶
Sage also offer invoice templates, some of which are free to access. Other products from Sage come with more features, but you’ll need to pay a fee to access them.⁷
The Sage 50cloud prices quoted in the price comparison table above assume there is only one user with access to the product.
Multi-user access is also available for some Sage products. You can add an additional user to the Essentials or Standard package, and up to 20 total users for the Professional package, but there is an extra fee to pay for this service. The essentials package moves to £32/month for 2 users, the Standard package is £72/month, and the Professional package with its maximum number of users is £150/month.⁴
All Xero account packages allow the customer to choose how many users you add, with no extra fee to pay for this service.²
Xero uses a dashboard approach to let you see your business financials at a glance. Integrate your bank feed, to have everything automatically updated in more or less real time.⁸ Sage offers a dashboard and custom made reporting solutions. It’s helpful to note that different Sage products have different features, and their on the go availability won’t always be the same. While you can access some of your details online easily, to get full use of all features you might need to upgrade to a more expensive package.⁵
If you have a team to manage, getting a payroll solution in place might make life easier. Xero payroll is £5/month, for up to 5 employees, with additional team members costing an extra £1/month. VAT will also be added. At the time of writing there’s a free 3 month trial available if you want to see how this product might suit your business.²
Sage also provide payroll tools - Sage Business Cloud Payroll is £6/month for up to 5 employees, with a 40% off opening offer at the time of writing.⁹ If you’re using the Sage 50cloud products, you can also add payroll solutions. This will cost £23/month for the Standard package, and £76/month for the Professional, which covers up to 50 employees. Prices vary according to the number of people working for you - and VAT will be added on top of your regular monthly fees.⁴
Both Xero and Sage are well established companies, offering a great range of small business accounting and payroll solutions. Choosing between the different options is a process of aligning your needs with the features and fees, and finding the best fit. Don’t forget to look at the small print, and consider not only what you business needs now, but what you might want in future as your organisation expands and matures. Picking an accounting solution which can grow with you will save you time, money - and hassle - down the line.
Sources checked on 20-May 2019.
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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