Best Accounting Software for Sole Traders  

Best Accounting Software for Sole Traders   post image

As a sole trader, you are solely responsible for keeping on top of your accounts. It’s at the centre of your business success: you must track cash flow, pay taxes, send invoices, and handle your general expenses on top of doing your standard job. This considerable burden can be simplified by the adoption of robust and comprehensive accounting software.  

Utilising a single software keeps all your financial data in one location. Other benefits include the reduction of human error, automated tax deductions, and streamlined invoice management.  

This guide will identify the best self-employed accounting software on the market today.  

The benefits of self-employed accounting software 

Accounting software solves the need for manual bookkeeping. As a sole trader, you likely are required to process a considerable volume of transactions daily. You also need to stay aware and compliant with your tax obligations to continue trading legally. Instead of keeping on top of these transactions with separate spreadsheets, invoices, and receipts, you can simplify it with a centralised accounting platform.  

This allows you to better fit in your accounting duties throughout the working week. The increase in self-employment that has taken place in recent years has only been made possible by the introduction of cloud-based and intuitive accounting software. According to Statista, there are currently 4.33 million self-employed workers in the UK.  

Old methods of manual accountancy are too time-consuming and generally put many people off working as a sole trader altogether.  

Key bookkeeping features you need  

When assessing the accounting software as a sole trader, there are specific features that are non-negotiable. They include:  

Automated data entry  

Sophisticated accounting software should be able to process data automatically, removing the need for manual effort. For example, when you input invoices and receipts into your accounting solution, the tool will scan and retrieve all relevant data from it. This data capture tool will then store the important data within your accounting platform, making it easily retrievable when necessary.  

Not only does this free up time, but it also removes human error from the equation. The correct data is captured accurately, ensuring no miscalculations occur.  

Automated reporting and analytics  

Not only great at processing data, but accounting software can also provide you with automated reports whenever necessary. A balance sheet featuring real-time data can be generated instantly. Historical data can be cross-referenced with present data to help you forecast the future financial health of your business.  

Plus, with reliable analysis available instantly, you can make data-driven decisions with greater confidence.  

Cloud-based file storage  

When performing manual accounting, it can be difficult to organise and store your receipts, invoices, and relevant financial documentation. With accounting software, you can take advantage of cloud-based storage solutions. These datasets allow you to store a huge amount of data in a logical and ordered way.  

Not only that, but premium accounting software will come with robust cybersecurity measures, including data encryption. This guarantees that your financial information is always kept secure. 

The best accounting software solutions for sole traders  

To simplify and streamline your self-employed accounting duties, choose one of the following software solutions:  


Price: £15 

Xero is one of the most popular accounting software options around thanks to its user-friendly interface and advanced security measures. Its main interface is clean, with simple graphs and charts displaying your current financial health. It details your total cash, invoices owed, and bills that you are required to pay. This interface is noted for its mobile-friendliness and its general cross-platform compatibility. Xero’s interface even looks good on Apple watches.  


  • Easy to use  
  • Easily link invoices with PayPal and other payment services 
  • Inventory tracking  
  • Accounts payable available with basic plan  


  • Expensive option  
  • Payroll is no longer included in basic plan  
  • Invoice limits on certain plans  


Price: £13.60 

Bonsai not only provides you with a reliable accounting solution, but it also doubles up as a basic project management and CRM (Customer Relationship Management) tool. In terms of financial management, Bonsai provides all the features you could need to successfully manage your accounts. This includes creating and sending invoices as well as generating automated reports. Bonsai can automate financial statements on a weekly, monthly, and annual basis in accordance with local tax laws.  


  • Great 24/7 customer support  
  • Automated and insightful reporting  
  • Premium invoice management  
  • Can be used to manage projects  


  • Limited scalability  

Sage Business Cloud Accounting  

Price: £14 

While Sage is slightly less user-friendly than the other examples in this list, it provides plenty of educational content as well as 24/7 customer support. By using Sage, those who are unfamiliar with accounting processes can really gain a deeper understanding of how things work. With Sage, you can reconcile bank accounts, submit VAT, track payments, and send and receive invoices. There’s also a handy cash flow projection tool which is handy for generating forecasts.  


  • Great for forecasting  
  • Reliable customer support  
  • Ensures tax compliance  
  • Sophisticated invoice management  


  • Learning curve  
  • Restricted inventory management  


Price: £9 

If you’re looking for an accounting solution that’s quick to set up and highly budget-friendly, look no further than Kashlow. With a starter price of just £9 per month, Kashlow offers the best value for money out of all the options on this list. Plus, its low price doesn’t mean it’s of low quality. It’s user-friendly interface breaks down your financial health into easy to read graphs. One of these graphs accurately charts your sales growth over the course of the year, providing you with valuable insight. Plus, this tool also breaks down your overdue invoices, overdue receipts, money you owe, and money owed to you.  


  • Great for beginners  
  • Quick set up 
  • Economic option  
  • Tax calculation assistance  


  • Limited customisation  
  • Limited customer support  


Price: £10  

Quickbooks is another budget-friendly option and can keep your bookkeeping, invoicing, and general accountancy tasks organised. On the main dashboard, your sales, profit and losses, expenses, bank accounts, and invoices are all clearly displayed. Graphs and pie charts are implemented to give you a quick update on the overall health of your finances, and you can click on individual segments to receive more detailed reports.  Quickbooks is constantly verifying your tax and regulation compliance, which it also displays on the main dashboard.  


  • Great value  
  • Tax calculation assistance  
  • Comprehensive dashboard 
  • Cash flow projections 
  • Plenty of additional features 


  • Limited inventory management 
  • Budget management tool not available on lower tiers  

Find the right accounting solution for your business 

While the accounting software options listed in this article reflect what we think to be the best, it doesn’t necessarily mean we believe that they’re capable of fitting your specific business needs.  

Every sole trader conducts business in their own way, and there could be a bookkeeping software that is better apt than the ones listed in this guide.  

YourShortlist can help you find the best solution for your enterprise.  

Get in touch with us today to receive a bespoke shortlist of best-fitting accounting software vendors.