Most cloud accounting setups are done in haste, by someone who is not a bookkeeper, in the first month a business has any revenue. The result is a chart of accounts that almost works, tracking categories that mean nothing, and a foundation that creaks louder every year. Setup done well takes one focused day; setup done badly takes years to fix.
Pick the platform that fits the business
- Xero — the strongest all-rounder for UK SMEs. Best ecosystem, best app marketplace, best multi-user practice support.
- QuickBooks Online — reliable, slightly stronger on inventory and US-influenced features.
- FreeAgent — excellent for sole traders and contractors; included free with NatWest / RBS / Mettle business banking.
Get the chart of accounts right
The chart of accounts is the most important decision and the one that gets the least attention. Mirror your management P&L (the version you actually look at) — not the platform default. Build the categories that map to decisions you make: by channel, by product line, by customer segment. The default chart will give you "Sales" and "Cost of Sales"; your business probably needs more than that.
Connect the integrations once
- Bank feeds — every business account, every credit card.
- Receipt capture — Hubdoc or Dext, with email-forward addresses on every supplier.
- Payment processing — Stripe, GoCardless, PayPal, all wired into the platform.
- Payroll — separate platform usually, but make sure it posts journals to the GL automatically.
Lock in the close cycle
Decide on day one what "closed" means. For most SMEs: bank reconciled, accruals posted, intercompany cleared, P&L reviewed against budget, all by the 10th working day of the following month. Without that discipline the platform fills with stale, unreconciled noise — and the value of the whole system halves.
