This post explores the accounting software that is most appropriate for UK charities.
We have examined the five most prominent options. The best option will depend on your circumstances but by explaining the key charity-specific considerations, this post will help you if you are just starting to look for accounting options.
The Benefits of Using Charity Accounting Software
Spending too much time on charity accounting means you’re taking time and energy away from the important work that your charity does. Software streamlines processes, automates important tasks and makes your life easier.
Could you use any accounting software? Although there are many similarities in how charities and other companies must account for their money there are also some important differences. While the accounting software that you select need not be designed solely for nonprofits or charities, you do need software that’s designed with charities in mind.
Things to consider when looking at charity accounting software
This has become the standard because cloud-based software can be accessed from anywhere and ensures your data is backed up securely.
Track different revenue sources and SORP compliance
To comply with SORP for charities, you need to be able to provide a proper analysis of income and expenditure across different funds that may be restricted to use for a particular purpose.
Automatic expenses and receipt scanning
Automated receipt scanning is a convenient function that avoids you having to manually enter expenses, including information from receipts, which is time-consuming and prone to errors. Look for included functionality or supported integrations with standalone tools like Expensify.
While some online donation platforms or membership software will provide its own gift aid facilities, charities obtain donations from a range of sources and some accounting software options provide their own tools to streamline the process of tracking, reporting and claiming gift aid.
Many modern software options will automatically submit relevant information to HMRC in relation to payroll and VAT. With the introduction of HMRC’s Make Tax Digital initiative these integrations have become crucial.
Integration with existing systems
With those considerations in mind, here are our top 5 pieces of charity accounting software.
Top five charity accounting options
Sage is a UK-based option that has been a favourite with charities for many years.
Perhaps because of the age of the company, it does bring with it a legacy of different packages that is somewhat bewildering. And it appears that only the options aimed at larger organisations provide access to the dedicated charities module so if you are looking at their basic packages you’ll have make do without those more advanced features.
Sage’s Business Cloud Accounting option is a genuine cloud-based accounting solution but their Sage50 package appears to be older technology that has been partially moved to the cloud. This is perhaps part of the reason it has recently been losing ground to other options in this list.
On the plus side, Sage do offer a charity discount.
Sage’s cloud-based software has a sophisticated database that lets you track different revenue sources, making it convenient for reporting on various funding sources.
- £65+VAT per month for a standard subscription
- £132+VAT per month for a professional subscription
- Price increases for multiple users
- Free 30-day trial and some discounts for charities and nonprofits
✔ UK based
✔ Long history supporting larger UK charities
✔ Decent range of third party integrations
- High prices
- Bewildering array of offerings
- Has a steep learning curve due to complex functionality available
Liberty Accounts is another UK-based piece of cloud accounting software with special support for nonprofits. Charity focused functionality includes specific fund management and tools to help streamline the process of claiming gift aid.
There is specific fund accounting and a simple one-click statement of financial activities, making it uncomplicated for SORP reporting. Collaboration and handovers are also easy on Liberty.
- Starts at £12.95 per month but can go up to three figures depending on turnover and staff numbers
- 6-month money-back guarantee
✔ UK based
✔ Gift aid tools
✔ Dedicated charity support
✔ Fund management tools
- Few third party integrations
QuickBooks is for businesses of all sizes but offers a non-profit programme. It accepts all types of donations and these can be allocated to any fund or programme.
Reports can be generated instantly by fund and automatically sent to the relevant parties, such as donors or board members. Expenses are also tracked by fund and receipts can be entered automatically with a camera.
- £12 per month for their very simple ‘Simple Start’ package
- Payroll add-on at £4 per month plus £1 per employee per month
- One-month free trial
✔ Wide range of third party integrations
- Not UK based, which may affect support on UK charity-specific issues
Zoho Books is a cloud-based business accounting software that has specific features for nonprofits. It also accepts multi-currency donations.
You can create different accounts for funds and expenses, as well as generate reports to track spending against specific funds (including tracking donations), and monitor progress and obtain financial insights.
- Most popular plan is £12 per month
- 15% discount for charities
- Free trial available
✔ Lowest price
✔ Auto-scanning of receipts for expenses purposes
- Few third party integrations – focus is on working with other Zoho products.
- Analytics are not as advanced as some other pieces of software
Xero is another cloud-based accounting software for small and medium sized businesses that has some nonprofit-specific features. It has a user-friendly dashboard that provides an up-to-date view of cash flow. Several years ago Xero was the fastest mover in the embryonic market of cloud-based software. Incumbents like Sage and Quickbooks were initially slow to catch up. This has given Xero a wide and varied user base and contributed to its key advantages: a wide range of integrations and a solid cloud offering.
Xero has a good contact management feature and allows for easy and secure sharing of donation and expenses information with any relevant parties, such as board members, donors, or volunteers.
- Standard option is £24 per month and premium is £30 per month
- Charities and nonprofits save 25% on their subscription
✔ Widest range of third party integrations
✔ The invoicing function is not as good as on some other platforms
✔ Expenses, payroll and multi-currency support all incur additional costs.
- Limited human customer support; expect to be heavily directed to help articles and the community forum.
Sage and Liberty stand out as the best UK-based options. This brings with it a range of functionality that addresses specific concerns of UK charities and also the UK based support to back this up.
On the other hand, Quickbooks and Xero have become more dominant global players in the accounting software market and this brings with it the major advantage that they offer a wider range of integrations with other pieces of software.
Zoho has a distinctive edge in that it works well with the broader suite of Zoho tools so this option will appeal to you particularly if you use their CRM or other tools already.
In evaluating these options, start by pinpointing the charity-specific functionality you need and also look at which integrations would be useful or necessary. All of these options come with a free trial so armed with that information you should be able to give them all a thorough test and decide which is the best fit for your needs.