Software development agency accountant UK
Accounting for software agencies that bill by project, day rate and retainer. NDCA keeps contractor payments, project billing, VAT and tax under control on a fixed monthly fee.
In short: NDCA is an ACCA-regulated accountancy practice for UK software development agencies. We handle project profitability reporting, payroll and contractor payments, VAT, Corporation Tax and year-end accounts. Your agreed services are covered by one fixed monthly fee, with a named accountant who knows your numbers.
The usual problem for an agency is a healthy bank balance while one or two projects quietly lose money. We set up your books so every invoice, contractor bill and hour of work is tagged to a project.
What NDCA clients say
Verified Google reviews from NDCA clients.
In short: NDCA is an ACCA-regulated accountancy practice for UK software development agencies. We handle project profitability reporting, payroll and contractor payments, VAT, Corporation Tax and year-end accounts. Your agreed services are covered by one fixed monthly fee, with a named accountant who knows your numbers.
The usual problem for an agency is a healthy bank balance while one or two projects quietly lose money. We set up your books so every invoice, contractor bill and hour of work is tagged to a project.
What we handle for software development agencies
Software development agencies need specialist accounting because they combine project-based billing with employees, contractors, freelancers and often international clients, where revenue on the invoice is not the same as a project’s economic performance.
Know which projects actually make money
A project can look profitable on the invoice while contractor costs or extra development time quietly erode the margin. Good accounting shows what has been billed, delivered and spent on contractors and what each project is actually contributing.
Contractors, freelancers and IR35
Most agencies work with a mix of permanent developers, freelancers and specialist contractors. Where the off-payroll working rules apply, we help you understand the accounting and payroll implications and keep the records in order, and we review contracts and working practices for IR35 risk and explain where you stand. Where a formal legal opinion is needed, we work alongside an employment lawyer.
Fixed-price, day-rate and retainer billing
Fixed-price projects need revenue, costs and progress monitored carefully. Day-rate work is billed against days delivered, with contractor costs directly affecting margin. Retainers need recurring invoices tracked against the agreed service period.
R&D tax relief
Some software development projects may qualify for R&D tax relief under the merged scheme, or under ERIS if the agency is loss-making and R&D makes up at least 30% of its spending, where the relevant HMRC conditions are met. Routine development, or work done for a client rather than the agency itself, will not automatically qualify. We help identify potentially qualifying work and organise the supporting information.
See our full accountant for UK tech, SaaS and AI businesses page for how we work with the wider tech sector.
VAT, international clients and expenses
UK VAT registration is generally required once your taxable turnover exceeds £90,000. Voluntary registration can sometimes make sense depending on your customers and costs, though it is not automatic just because a client is VAT registered. See our VAT returns page for more detail.
Many UK software agencies invoice US, European and other international clients. We handle foreign-currency invoices, GBP reporting and exchange differences as part of the monthly close. VAT treatment of development services supplied overseas depends on the nature of the service, the customer and the applicable place-of-supply rules, so we look at your actual client base rather than a blanket rule.
Business costs may be allowable where they meet the relevant tax rules and are incurred for the purposes of the trade, such as developer software, cloud services, contractor costs, recruitment, professional fees and office costs. Where an item is used for both business and personal purposes, only the business element may be allowable.
We check the VAT position for each market you invoice.
Know your numbers before year-end
You should not have to wait for annual accounts to understand how the agency is performing.
Depending on your agency, useful monthly management accounts reporting can include revenue, gross margin, contractor costs, project profitability and your Corporation Tax and VAT liabilities. We structure your reporting around what actually helps you run the business.
Get in touch and we will show you what that reporting would look like for your agency.
How NDCA works with software development agencies
What you can expect:
You get a named accountant who understands agency margins, not just someone who files your year-end accounts. We work on a fixed monthly fee agreed up front, with a direct point of contact who normally replies the same day.
We work remotely with agencies anywhere in the UK, on bookkeeping, Corporation Tax and payroll.
The software we use: Xero and Apron
Xero is the accounting platform everything runs through: project and client billing, contractor invoices, multi-currency and VAT under Making Tax Digital.
Running on Xero gives cleaner bookkeeping, better visibility over project margins and easier reconciliation. Contractor and freelancer invoices are captured through Apron, coded to the right project, with less manual admin as the team grows.
IR35 checks and project billing keeping you up at night?
Contractor payments to track, project invoices on different billing cycles, VAT on international clients. We handle it, on one fixed monthly fee.
Reviews
Discover why businesses trust us for dependable accounting services and practical financial advice.
What NDCA clients say
We work with businesses across the UK and beyond, delivering results that speak for themselves. Browse our reviews to see the impact we have made, and if you have worked with us, we would love for you to leave a review on Google
Switching from another accountant
Switching is simpler than most agency owners expect, and you do not need to wait for year-end.
1. You sign the proposal.
2. NDCA requests professional clearance from your existing accountant.
3. Your existing accountant provides the relevant records.
4. We review the information.
5. We take over the accounting.
6. Your business moves onto the agreed monthly workflow.
How long it takes depends mainly on how quickly your previous accountant sends the records across, and we keep you updated throughout.
Software agency accounting FAQs
Yes. We work with fixed-price projects, day-rate contracts and monthly retainers and can structure your reporting to show project profitability rather than just what has been invoiced.
Some can. The work has to resolve a genuine technical problem for the agency itself, and routine development or client work built to a spec usually does not count.
It depends on what you supply and who the client is. Many services to overseas business clients fall outside UK VAT, and we confirm the position for each client.
Typical claims include developer tools, cloud hosting, contractor costs, recruitment and professional fees, as long as they are incurred for the business.
There is no universal answer. The right structure depends on your profits, the owners, liability, funding plans and how profits are extracted.
Yes. We handle the handover with your current accountant and move you onto a monthly routine, keeping you updated as the records arrive.
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