Bookkeeping software is a digital tool for tracking daily financial transactions, expenses, and invoices. From simple bookkeeping to complex tax filing, sole traders are relying on this software to manage their multiple tasks. Sole trading has become much simpler with the use of software. It’s reducing work time, effort, stress, and errors. But it’s essential to select the right software that suits your solo trades.
This guide is here to help you choose the 5 best bookkeeping software for sole traders, which will help you to fulfil your requirements.
Why Sole Traders Need Bookkeeping Software
As an individual trader, you are responsible for accuracy, transparency, and liability. Using bookkeeping software helps you:
- Doing auto-tasks: This tool saves your time and budget by automating invoicing, bank reconciliation, and expense tracking.
- Maintain accuracy: Keep your accounts smart, reduce errors, and balance accuracy with the help of bookkeeping software.
- Tax Planning: Make your tax season stress-free and ensure HMRC for submitting self-assessment tax returns form SA100 and VAT return VAT100 with this software.
- Gain financial insights: Get financial insights by tracking cash flow, conducting audits, and monitoring company performance.
How to Choose the Right Bookkeeping Software
You need to integrate perfect software to meet your needs. Following these tips, you can ensure the best one, including:
- You can choose a software with a cloud-based, easy dashboard.
- Ensure your tool is suitable for HMRC & MTD compliance
- Make sure the tool is linked with your bank, payment method, and necessary apps.
- Select your tool, remembering your budget.
- Look over your tool, which has excellent automation capability.
Best 5 Bookkeeping Software for Sole Traders
The best five bookkeeping software for sole traders are –
1. QuickBooks
QuickBooks is the most popular for its usability and functionality for growing SMEs in the UK. But it will change depending on services and needs. Overview, pros, and cons of this tool are –
Overview:
- Real-time transaction sync and aligning accounts
- Adjustable payment slips & scheduled billing
- Online VAT compliance and VAT monitoring
- Receipt scanning & cost tracking
- Financial overview with profit and loss
| Pros | Cons |
| Easy interface even for newbies | A few specialised features are not free |
| Manage accounts anytime and anywhere via phone | Basic plans are costly compared to other software |
| 650+ apps support, like PayPal, Stripe, and eBay | Overwhelming to set up |
| Broad tutorials and expert support | It can be too lengthy for some quick users |
QuickBooks Pricing: Its price starts from £33 per month.
2. Xero
After QuickBooks Zero, it is the 2nd most renowned accounting tool for BookKeeping. Overview:
- Seamless bank data import & transaction verification
- E-payments and expert billing
- VAT tracking & filing
- Mileage monitoring and financial oversight
- Contact with accountants
| Pros | Cons |
| Easy to use | Subscriptions may be needed to access the payroll feature or add-ons |
| Wide sync with other software | Reporting feature is less user-friendly than QuickBooks |
| Maintains HMRC for VAT submission | Applicable only for the UK |
| Accesseble cloud-base | Limited access |
Xero Pricing: Price will start at £16 per month.
3. Sage Intacct
Many companies use Sage Intacct for its fine features. The basic plan for Sage Intacct starts from £18 monthly.
Overview:
- Complete budget control and analysis
- Global Currency and Intercompany support
- Automate receiving, scheduling, and tracking payments
- Bank and online payment service support
- User-friendly dashboard and easy to analyse
| Pros | Cons |
| Can easily handle increased users, usage, data as your business grows | It takes more time to learn how it works than QuickBooks or Xero |
| Expert analysis and reports | Expensive for beginner-level sole traders |
| Highly secured and audit trails | Hard to use for beginners |
4. Tally
Tally is a popular software, and its popularity is increasing because of its simplicity and reliability.
Overview:
- Provides all types of tools to manage financial records and accounting tasks
- Product monitoring and managing capability
- GST and VAT ready
- Payroll and payroll reports
- Support multi-currency
| Pros | Cons |
| Lower price than professional accounting software | Interface is a bit modern compared to other software |
| Manages accounting and inventory | Mostly desktop-based and limited cloud access |
| Flexible for small-scale businesses | May not be suitable for an entrepreneur |
Tally Pricing: Starts at £10/month
5. FreshBooks
FreshBooks is another popular software used around the world for bookkeeping.
Overview :
- Automatic invoicing reminders
- Budget & receipt monitor
- Billable hours tracking
- Fundamental analysis with profit/loss
- Tax calculations and international currency support
| Pros | Cons |
| Easy interface with basic setup | For full accounting needs, not as good as QuickBooks or Xero |
| Superb support system | Advanced reporting capability is limited |
| Easy cloud-based feature, accessible from mobile | Need to connect to the internet 24/7 |
FreshBooks Pricing: The pricing starts at $18
How to Get the Most Out of Bookkeeping Software
Some tips to get the best use of the software:
- Connecting Your Bank Account to the software
- Organising Transactions daily
- Frequently Reports Generating
- Keeping Digital Receipts
- Collaborating with Accountant.
Conclusion
Among all bookkeeping software, these are the 5 best bookkeeping software for sole traders. If you are an existing trader or a beginner and want to use software to make your work stress-free, integrate any one. You can save time, reduce errors, and stay compliant with HMRC. Also, get valuable insights for your business.
Frequently Asked Questions
Q1: Can sole traders use cloud-based software?
Definitely. Online sole traders like eBay or dropshippers need to connect 24/7 with their customers. So, cloud-based software is an excellent option for them.
Q2: Is bookkeeping software mandatory for UK sole traders?
It’s not mandatory. But it keeps sole traders smart with time and compliance.
Q3: Which software is best for VAT compliance?
QuickBooks, Xero, Sage Intacct, and FreshBooks are best for VAT compliance. Because these are completely MTD based, they enable the filing and submission of VAT returns within deadlines.
Q4: Can I switch software later if needed?
Absolutely. You can switch software later whenever you need.
Q5: Do I still need an accountant if I use software?
Sure. You can choose a package that includes an accountant plus software.
