What is Sage?

Sage is a popular accounting software platform used by businesses in the UK to manage their financial processes efficiently. Designed to cater to businesses of all sizes, Sage provides a wide range of features that help streamline accounting, payroll, and financial management tasks. The software is highly regarded for its ease of use, robust functionality, and scalability, making it a reliable choice for small businesses, medium enterprises, and large corporations alike.

This article will explain what Sage is, how it works, its pricing options, and the benefits and challenges of using Sage for your business.

How Does Sage Work?

Sage is designed to automate and simplify complex accounting tasks, allowing businesses to focus on growth rather than managing day-to-day financial processes manually. It offers cloud-based solutions as well as desktop software, depending on the specific needs of the business.

Key Features of Sage:

1. Invoicing and Billing: With Sage, businesses can create and send customised invoices, track payments, and manage outstanding invoices all in one place.

2. Bank Reconciliation: Sage connects with UK bank accounts to automatically import bank transactions, which can be reconciled with your accounts efficiently.

3. Expense Management: Sage allows users to track and categorise expenses, making it easy to manage business costs and prepare for tax returns.

4. VAT Compliance: Sage is fully compliant with the UK's Making Tax Digital (MTD) regulations, allowing businesses to submit VAT returns directly to HMRC.

5. Payroll Management: For businesses with employees, Sage offers payroll features that allow accurate calculation of wages, tax deductions, National Insurance contributions, and pension schemes.

6. Financial Reporting: Sage provides a range of real-time financial reports, including profit and loss statements, balance sheets, and cash flow projections, offering a clear view of a business’s financial health.

7. Inventory Management: Sage helps businesses manage their stock, keep track of inventory levels, and generate purchase orders when stock needs replenishment.

8. Multi-Currency Support: Sage offers multi-currency functionality, making it suitable for businesses that deal with international clients or suppliers.

9. Project Tracking: For businesses that work on multiple projects, Sage offers project tracking tools to monitor income, expenses, and profitability on a per-project basis.

By using Sage, businesses can centralise their financial operations, automate many manual tasks, and ensure compliance with UK tax laws.

How Much Does Sage Cost?

Sage offers different pricing plans depending on the size and needs of the business. There are both cloud-based options for smaller businesses and desktop solutions for more complex operations. Here are the main pricing plans for Sage in the UK:

1. Sage Accounting

• Start Plan: £12 per month

  • Ideal for sole traders and freelancers

  • Create and send invoices

  • Automatic bank reconciliation

  • Track income and expenses

  • Submit VAT returns

• Standard Plan: £26 per month

  • Best for growing businesses

  • All Start plan features

  • Cash flow forecasting

  • Manage inventory and stock

  • Capture and manage receipts

• Plus Plan: £33 per month

  • Includes Standard plan features

  • Multi-currency support

  • Advanced reporting and insights

2. Sage Payroll

• Sage Payroll 5: £7 per month + £1 per employee

  • For businesses with up to 5 employees

  • Full payroll services, including pension schemes

  • HMRC-compliant and Real Time Information (RTI) enabled

• Sage Payroll 10: £12 per month + £1 per employee

  • For businesses with up to 10 employees

  • All Payroll 5 features, plus additional payroll tools

• Sage Payroll 25: £21 per month + £1 per employee

  • For businesses with up to 25 employees

  • Advanced payroll features

Sage also offers bespoke pricing plans for businesses with more than 25 employees.

3. Sage 50cloud Accounts

• Sage 50cloud is a desktop-based solution that offers advanced accounting features, including payroll integration, inventory management, and project tracking. Pricing for Sage 50cloud starts at £60 per month, with the option to add extra features based on business needs.

Sage frequently offers discounts for new users, so it’s worth checking their website for promotions.

Who Should Use Sage?

Sage is designed to meet the needs of businesses of all sizes, from sole traders to large enterprises. However, the specific product that suits you depends on the size and complexity of your business:

• Sole Traders and Freelancers: The Start Plan offers an affordable option with basic features like invoicing and expense tracking, ideal for individuals managing their own businesses.

• Small and Medium-Sized Businesses: For businesses needing more features like payroll, inventory management, and VAT compliance, the Standard or Plus plans are more appropriate.

• Larger Businesses: For businesses with more complex accounting needs, Sage 50cloud offers advanced tools for managing multiple currencies, inventory, and employee payroll.

How to Get Started with Sage

Setting up Sage is relatively straightforward, and the platform offers a range of resources to guide new users through the process.

1. Sign Up for a Plan: Start by selecting a plan that suits your business needs. Sage offers a 30-day free trial for its cloud-based plans, so you can explore the features before committing to a subscription.

2. Connect Your Bank Account: If you opt for a cloud-based solution, you can link your UK bank account to Sage for automatic transaction imports and reconciliation.

3. Customise Your Invoices: Set up invoice templates that reflect your business branding. Sage allows you to add your logo, customise the layout, and send invoices directly to clients.

4. Set Up Payroll: If you're using Sage Payroll, enter employee details and pay rates. Sage will help calculate tax and National Insurance contributions, ensuring compliance with HMRC.

5. Submit VAT Returns: Ensure that your VAT settings are correct, so that you can submit VAT returns directly to HMRC when required.

Sage also offers training and support resources, including webinars, how-to guides, and customer service to help users get the most out of the software.

Benefits of Using Sage

1. Comprehensive Financial Management: Sage offers all the tools a business needs to manage its finances efficiently, from invoicing to payroll.

2. Real-Time Data: With cloud-based solutions, businesses can access their financial data in real-time, helping them stay on top of cash flow and expenses.

3. Compliance with UK Tax Laws: Sage is fully compliant with UK tax regulations, including Making Tax Digital (MTD), helping businesses stay compliant when filing VAT returns and managing payroll.

4. Scalability: Sage grows with your business. As your business expands, you can upgrade to plans with more features, ensuring you’re always covered.

5. Time-Saving Automation: Sage automates many tasks, such as invoicing, bank reconciliation, and payroll, freeing up valuable time for business owners.

Drawbacks of Sage

1. Learning Curve: Although Sage is user-friendly, businesses that are new to accounting software might face a learning curve, particularly when using advanced features.

2. Cost: Sage’s higher-tier plans and payroll features may be more expensive than other alternatives on the market, especially for small businesses.

3. Limited Customisation: Some users report that the customisation options in Sage, especially with financial reports, can be somewhat limited compared to other accounting platforms.

Conclusion

Sage is a powerful accounting tool that offers a comprehensive range of features to help UK businesses manage their finances efficiently. Whether you’re a sole trader or a large enterprise, Sage has a plan that fits your needs. With real-time access to financial data, automated processes, and full compliance with UK tax regulations, Sage can significantly reduce the time spent on financial administration, allowing you to focus on growing your business.

While there’s a learning curve for new users and the cost can be higher than some competitors, the efficiency and reliability Sage offers make it a worthy investment for businesses looking to streamline their accounting processes.