Best Accounting Software for Charities UK

Are you looking for the best accounting software charity or nonprofit organisations can use to manage, track, and control finances—from donations to expenses? The right solution also provides real-time insights into contributions, helping you keep donors informed about the impact of their support.

Currently, there are various charity accounting software options available for nonprofits, but you need to find the perfect solution based on your organisation’s requirements. Before analysing the top accounting solutions, let’s understand the need for such a solution.

Financial management is a must for all organisations, whether they are charities or automotive businesses. All such organisations need to track all the expenses, profits, margins, donations, transaction records, and other financial activity to manage a stable cash flow.

Such activities empower charities or nonprofits to monitor all core operations while building more growth opportunities. With financial or accounting tracking, you will be able to track the donations, build reports, maintain administrative costs, and track all expenses while sharing the data with the respective stakeholder.

How an Accounting Software for Charities can Streamline Finances?

The best-chosen accounting software for charities can handle all the financial transactions while keeping track of all donations and expenses. With the tracking of all donations, it will offer you financial reports to help you analyse the data.

When it comes to managing accounts, bookkeeping is the most essential task for an organisation. With modern accounting software for charities, you will be able to automate bookkeeping while eliminating the chances of errors during the tracking of accounting transactions.

Based on your organisation and its unique demands, you will need to choose a solution. However, before choosing the solution, make sure to find the below listed features and capabilities.

• Bookkeeping automation
• Monitoring donations
• Tracking expenses
• Management of restricted funds
• Build real-time financial reports
• Payroll management
• Generate invoices for donations

Benefits of Accounting Software for Charities

Running a charity isn’t only about passion; it’s also about showing people that their trust is in safe hands. Donors want proof that their money makes a difference, regulators want accurate books, and your team needs time to do the real work. Good accounting software can help with all of these. The key benefits of using accounting software for a charity business are as follows.

Transparency that earns trust

When every donation and expense is recorded in one place, finding reports doesn't feel like a headache. Donors can see where their contributions go, and auditors don’t have to chase missing numbers.

Time back for the mission

Ask anyone working in a charity — admin always eats up hours. Accounting software for charities handles payroll and reconciliations so staff can step away from spreadsheets and back into community work.

Planning with confidence

It’s not enough to know what you’ve spent. The real value is spotting what’s coming. Reporting tools in accounting software highlight donation trends and seasonal peaks, giving managers the insight to plan projects without guesswork.

Compliance without worry

Deadlines and audits used to mean worry. But with the right accounting software system, records for grants, gift aid, and HMRC rules are already lined up. So there won't be any last-minute scrambles, only peace of mind.

Lower costs where it matters

Errors and manual work waste money. Smarter accounting software systems cut down on both, leaving more of each pound raised to go into programmes instead of admin.

Closer ties with donors

Some tools also link directly with donor records. Receipts, thank-you notes, and giving history are all in one place, making it easier to keep supporters engaged for the long term.

Best Accounting Software for Charities UK 2025

At Dynamics Square, we have certified Microsoft consultants that help us build the following list of top solutions based on the nonprofit’s choice and similar other essential parameters.

1. Dynamics 365 Business Central

Microsoft Business Central is a powerful cloud ERP solution built especially for small and medium businesses. Based on cloud-deployment, it offers a specific and robust financial management module to manage and track all financial activities. Dynamics 365 for nonprofits empowers the nonprofits to distribute the funds accordingly while getting accurate delivery figures. Based on expenses and donations, you can build reports and workflows in real-time.

Pros of Dynamics 365 Business Central for Charity

• Access cost accounting
• Set up authorisation workflows
• Robust finance reporting
• Manage payroll and restricted funds

Powerful Integrations with other applications Dynamics 365 Business Central pricing starts at £57.50 per user/month for the Essential Plan. For more details, you can check out the more details at our Microsoft Dynamics 365 pricing page.

2. QuickBook Online

Quickbooks Online is a cloud-based ERP solution that provides traditional nonprofits with modern financial management tools. With its features and capabilities, it helps a charity streamline financial management using limited resources. Quickbooks enables a business to build custom financial reports based on donations and expenses while tracking all grants to maintain bookkeeping.

Pros of Quickbook Online

• Track revenue expenditures
• Monitoring the budget in details
• Manage various donors and donations altogether
• Sync donation data with the bank
• Track donations globally

Quickbooks Online pricing will cost you £36 per user/month for the Plus plan. However, to get more comprehensive tools, you can go with an Advanced plan that costs £79 per user/month.

3. Sage Accounting Software

Sage is built especially to deal with general accounting processes. It is a cloud-based solution capable of managing accounts and financial processes while streamlining trust funds, bank reconciliation, staff payroll, and much more. Sage lets you speed up the accounting processes, eliminate time taken in reconciling transactions, and manage charity products while offering real-time data to donors.

Pros of Sage Accounting Software

• Keep you up with latest MTD rules
• View monthly budgeting and quarterly summaries
• Automate admin tasks
• Reconcile financial transactions
• Track donations on all devices

The Sage Accounting Software pricing costs you £14.00 per user/month for the Start plan. However, you can go with Standard and Plus plans that will cost you £28.00 per user/month and £36.00 per user/month respectively.

4. Xero Accounting

Xero accounting is basically built for small and medium charity companies, as it comes with limited functionality when it comes to managing complex financial operations. It offers similar features to other accounting software, but it comes with separate project management along with the facilities of SORP accounting.

Pros of Xero Accounting

• Monitor the entire cash flow – in and out
• Track the financial health of a nonprofit
• offers a unified platform to share and collect information
• Share financial reports with donors and stakeholders
• Smooth integrations with third-party applications

The Xero Accounting pricing costs you £28 per month for a Standard plan. However, you can opt for the Premium plan, which will cost you £36 per month.

5. Dynamics 365 Finance and Operations

As we already know, Microsoft Business Central 365 is for SMBs and can only tackle simple operations. But Dynamics 365 for Finance and Operations is capable of managing the complex financial operations of an organisation along with streamlining the supply chain. It is best suited for large organisations with a high demand for managing various processes at once.

Pros of Dynamics 365 Finance and Operations

• Manage stakeholders and donors through a single dashboard
• Get accurate visibility into cash flow
• Access automated workflows and audit trials
• Efficiently manage accounting tasks with automation
• Get key insights with a custom dashboard

Compare to all best accounting software for charities

Which Accounting Software for Charity Suits you Best?

Firstly, you need to understand the basic requirements of your nonprofit and predict its future demands. Once you have the information, you will be able to select the perfect accounting solution for your charity.

However, if you are a small and growing charity with standard accounting and ERP needs, you can go with Microsoft Dynamics 365 Business Central. It will not only manage your accounting demands but also streamline your business operations with the right set of tools, features, and capabilities.

If you are a developed charity with complex financial operations, go with Dynamics 365 for Finance and Operations.

In case you are struggling to understand your core business demands, you can contact our certified technical consultants for non-profits by writing an email at info@dynamicssquare.co.uk or calling us directly at +44-207-193-2502 to get instant help.

Case:

Dynamics Square has implemented Microsoft Dynamics 365 Finance and Operations in Africa’s largest non-profit organisation – ACBF (African Capacity Building Foundation).

Before implementation, they were running on legacy accounting software with a risk of data breaches and unstable tracking of funds as well as expenses. They were looking for a solution capable of managing an entire nonprofit while enhancing overall efficiency and productivity for accelerated growth.   

We have implemented Dynamics 365 for Finance and Operations along with a NFP accelerator to track grant disbursements and gift acknowledgements. Also, this implementation enables them to manage the core HR operations, like leave management, payroll management, hiring, and employee retention.  

See Also - Dynamics 365 Nonprofit Accelerator

Some FAQ’s of Accounting software for charities

1. What is the best accounting software for charities?

There’s no such thing as a single best option, but yes best options exist based on your size and needs. For example, smaller charities usually do well with Xero or QuickBooks, while larger charities prefer Dynamics 365 or NetSuite for more complex reporting and donor management.

2. What is accounting software for nonprofits?

Accounting software is designed to help charities and nonprofit groups manage donations, grants, expenses, and reporting. These software are not similar to standard accounting tools; they also include features like fund tracking and gift aid support.

3. Can charities use Dynamics 365?

Yes. Dynamics 365 is widely used by nonprofits. It helps with accounting, donor management, and even grant tracking, that makes it a good fit for charities with growing operations.

4. What is accounting software for nonprofits?

It’s another way of calling accounting software that’s tailored for charities. The goal is the same: track income, manage expenses, and stay compliant — but with features that match nonprofit needs.

5. Why should a charity use accounting software instead of spreadsheets?

Spreadsheets may work in the beginning, but as donations and reporting grow, they become harder to manage. Accounting Software keeps things accurate and cuts down on manual work.

6. Is accounting software expensive for charities?

Not necessarily. Many vendors give special nonprofit pricing. Plus, the time saved on admin usually makes up for the cost.