Do I actually need accounting software?
Plenty of very small businesses start with a spreadsheet, and honestly, that’s not always wrong. The question is knowing when you’ve outgrown it.
When a spreadsheet is genuinely fine
Very low transaction volume, a handful of invoices a month, no VAT registration, no staff. If that’s you, a well organised spreadsheet costs nothing and does the job. There’s no rule that says you must use software from day one.
When it stops being fine
Once Making Tax Digital rules apply to you, and they increasingly do as thresholds get extended, you’re legally required to keep digital records and file through compatible software, a spreadsheet alone won’t cut it anymore. Growing transaction volume also makes manual entry genuinely error-prone and time consuming in a way that starts costing you real hours.
The free option removes the excuse
Wave is a genuinely free option that handles invoicing and bookkeeping without a monthly cost, which means budget is rarely a valid reason to stick with spreadsheets once you’ve outgrown them.
The honest answer
If you’re VAT registered, running a limited company with any real activity, or spending more than an hour a month wrestling with a spreadsheet, it’s time to move to software. If none of that applies yet, there’s no rush, just revisit the question every few months as the business changes.
Where we mention a paid product we may earn a fee if you sign up, at no cost to you, and it never changes what we recommend. Pricing and features change, always check the provider’s own site for current details. This is information, not accounting advice.