Startups need to track their financial transactions, just like older, more established businesses. A startup might not have a lot of money to spare (since it’s only been around a short while), so keeping an accurate financial record is even more critical than it would be in other companies. 

Doing accounting for a startup can be tricky, so you might consider downloading accounting software to help you. This article will look at the best accounting software for startups, and the tasks it can help you with. The topics we’ll cover include:

  • What can startup accounting software help with?
  • What to look for in the best accounting software?
  • How Countingup can help your startup?

What can startup accounting software help with?

Tax 

Depending on how you register your startup — whether it’s a sole trader or a limited company — you’ll pay your taxes differently. Paying the correct amount to HMRC is hugely important, as your business could face serious legal consequences otherwise. 

One of the most complex parts of paying tax is claiming back any business expenses. You pay HMRC on any profit you make, but you can reduce your tax bill by claiming purchases as business expenses. This means you’ll only pay tax on the profit you made and not on the cost of purchases necessary to run the business. 

Without accounting software, tracking your business expenses can get very confusing, as you’ll likely have a ton of different purchases related to your company that you’ll need to sort through. Countingup helps simplify things, as you can manage your expenses and accounting from its easy-to-use app.

Among these features is automatic expense tracking, which further helps with paying taxes. This feature will organise your expenses into similar categories to the ones you’ll get on HMRC tax forms, so filling in the forms is as simple as copying the information across.

Budgeting

Creating a budget is something you’ll need to do frequently while running your business, as planning out your spending will stop you from making unnecessary purchases. 

A big part of budgeting is finding out the prices for various items, but you’ll also need to examine your own finances to determine how much you can afford to spend. A great way to keep all your financial info in one place is by signing up for a business account. A Countingup business account can further help with budgeting with its real-time profit and loss reporting. 

A profit and loss statement is a financial document that shows how much money your business has made and lost over a set period. The Countingup app shows a real-time view of your company’s profits and losses, updating as you make transactions on the business account. This report gives you more information on how much money your business is making, which in turn helps you understand how much you can set aside for a particular budget.

What to look for in the best startup accounting software 

Automatic expense categorisation

A necessary feature for the best startup accounting software is a method of keeping tabs on all your business expenses. Tracking these expenses is important because of the huge role they play in the taxes you pay to the government. 

Countingup automatically categorises expenses for you. The app places each of your business transactions into one of five categories:

  • Income 
  • Cost
  • Equity
  • Liability
  • Asset

These categories are all HMRC-approved, saving you hours of admin when it comes to submitting your Self Assessment tax return,

Invoicing on the go

The best startup accounting software should also offer a way of making invoicing easy. Invoicing clients might be your primary source of income, so having an easy way to create and send invoices is vital for a startup.


With the Countingup app, you can create an unlimited number of invoices for free. You can customise them according to your business needs — for instance, you can change the due date for payment  —  and even add your business logo for a polished, professional appearance.

Countingup’s invoice system is a great way to avoid common invoice mistakes, as you can duplicate invoices that you know are accurate. Since a mistake in your invoice can mean your startup loses out on money, having a way of ensuring accurate invoices is essential.

Receiving payments for invoices is easier with Countingup, too. You’ll receive a notification when a customer pays their invoice, and you can match payments to invoices by selecting the payment on the balance screen. Invoice matching helps keep your records organised, helps confirm that clients are sending you the correct amounts. 

MTD-friendly

To help you calculate and pay your taxes, Countingup is MTD compatible. MTD stands for Making Tax Digital, a government initiative to make HMRC a more digital-friendly institution. For small businesses, this will mean some big changes in the next few years.

In April 2022, VAT-registered businesses with a taxable turnover of less than £85,000 will need to submit their VAT return in accordance with MTD guidelines. Then in 2024, self-employed individuals and landlords making over £10,000 from businesses or properties will need to follow MTD rules when they file their income tax self-assessment.

MTD rules basically mean you’ll need to use MTD-compatible software when filing tax forms to HMRC. Since Countingup is MTD compatible, it’s fine to use for any of the tax-related tasks we’ve listed above. Eventually, all businesses will need to follow MTD rules, so it’s smart to download and use accounting software before you get left behind.

Focus on doing what you love

When you’re running a startup, you’ll need to make the most out of every hour of your working day. You can save hours of painful admin time with Countingup. 

The Countingup app helps thousands of startups keep on top of their financial management. The business current account with built-in accounting software. Automates the time-consuming aspects of startup accounting so that you can focus on building your business and doing what you love. 
Click here to download the Countingup app today.