By having a dedicated business bank account, you can easily track and record your business-related expenses and income. This simplifies the process of completing your annual accounts and Self Assessment Tax Return, saving you valuable time and effort. That’s not to say another provider sole trader accounting won’t have a specific tool or feature that’s exactly what you need, though.

What is a service business?

It’s not really tailored towards the needs of a small business, as there’s no open banking integration, no mobile app, and crucially, it doesn’t support payroll functionality. You also get the QuickFile mobile app, which is really handy, especially for side-hustlers who need to snap and upload receipts on the go. It also helps you separate out your personal and Accounting Security work finances, if you don’t have a business account. We think Zoho Books is the best, but there’s a number of other free accounting software platforms on the market, so read our roundup below to find out which is the best fit for your business. You should also think about your skill level when it comes to accounting software. If you’ve got years of previous accounting experience, a more complicated platform like Xero might be well suited to you.

Navigating SEC Loss Limitations for Tax Efficiency

If your annual turnover exceeds $75,000, you’re required to register for GST and lodge Business Activity Statements (BAS). Choose ATO-compliant accounting software that automatically tracks GST on sales and purchases, making tax lodgment effortless. There’s a very good reason QuickBooks Online tops this list of best accounting software for the self-employed.

In-app chat support

With dedication and expert guidance, sole traders can manage accounting successfully. The financial visibility and control benefits make the investment worthwhile despite more effort required compared to larger, incorporated businesses. In exchange for the highest degree of autonomy in decision-making and potential profits, sole traders also take immense personal financial risks.

Looking for tax help?

Despite a starting price of £12 per month, Sage Business Cloud Accounting may appear restricted in comparison to other available alternatives in the market, considering the cost. Book a free call with our resident tax expert Laura, to make tax time, relax time. It’s so easy being able track all our outgoings and incomings in one system. Book a free consultation to discuss more about what a sole trade is and whether this is the best company type for you. If your annual turnover exceeds the VAT registration threshold (currently £90,000 as of 2024), you must register for VAT.

• It offers a range of plans catering to sole traders and growing businesses.
• It offers simple invoicing, GST tracking, and bank reconciliation, making financial management hassle-free.
• There are plenty of ready-to-go sole trader software packages available to choose from that tick all of the boxes above.
• Classify every item into relevant reporting groups like cost of goods sold, overheads, direct costs etc.
• Setting aside money to pay your tax bill and ensure you can pay tax on time is worth it.

Clear Books provides some very strong features to keep you on top of your taxes as a freelancer or sole trader. You can track VAT, and it takes just three steps to submit your MTD VAT returns to HMRC. You can make sure you’re ready for tax season, but as we highlighted above, this only applies to users on the Medium tier.

We feel this simple learning curve makes it particularly suited to sole traders with no experience using accounting software. We really liked the clear and aesthetically appealing interface, which Accounting Periods and Methods we felt was easy to understand, and not overwhelming. If you decide to work for yourself and start a business as a sole trader (self-employed), you need to set up an accounting system to record your income and expenses. Since the pandemic, and due to drastic shortages for qualified staff, the hair industry is experiencing significant changes in the workplace, with many business owners scaling down to become sole operators. It is the largest growing sector of the hairdressing and barbering market.