Having the right accounting software will help your sole trader business immeasurably.
While you’re handling the day-to-day running of your business, accounting software can save you hours of work and mountains of receipts flooding out of shoeboxes. It’ll also help you cut your tax bills and reduce the risk of making mistakes. Some even make it easier to form a limited company if that’s the direction you want to go in.
With all that in mind, we’ll be taking a look at how to find the right accounting software for your sole trader businesses along with some of the best packages on the market.
How do I find the right accounting software for my sole trader business?
Before you dive right in, you’ve definitely got some factors to consider. What should you be looking for from your accounting software? We spoke to experts from three accountancy and finance firms to find out more.
Free trial
Having a free trial allows you to have a taster of different accounting platforms before you make a decision. This is especially useful if you’re unsure of the functionality you’ll need.
“If you can experiment and try a few out then do,” said Rick Smith, managing director at Forbes Burton. “They all perform a very similar function, but you need to select one that is going to be easy for you to use. The ultimate aim should be not to make life more difficult for yourself for the sake of perceived convenience.”
Cost
Once you’ve established what you want, cost is the next crucial factor. “Most are evenly priced, but there may be features that you need which aren’t included so make sure you check what features are included. Locking into a contract and finding some elements are limited could well be difficult and expensive down the line,” explained Smith.
Functionality
As you can see, the functionality itself is hugely important. This can mean many different things – and be careful about having too little or too much functionality.
“A primary consideration for sole traders looking to invest in new software is the software’s Making Tax Digital (MTD) compatibility, whereby sole traders with a gross income of more than £10,000 will be required to file tax returns electronically from April 6, 2024,” said Joanne Thorne, technical compliance manager at SJD Accountancy. She went on to say that under MTD, sole traders will have to submit these records on at least a quarterly basis. The Self-Assessment Tax Return (SATR) will then be replaced by a Final Declaration.
“In the meantime, it is business as usual, so it’s advisable to use software that will allow them to submit their SATRs, and software that can automatically calculate their SATR based on the digital records that are submitted on the platform can save a lot of admin time.”
>See also: 9 myths about Making Tax Digital busted
Thorne also said that it’s worth considering what you need from your software from an operational perspective, such as the option to run payroll or submit VAT and whether your chosen option supports this. Sole traders should also investigate whether they wish to link their bank accounts to the system.
Then there’s common functionality which is very useful for the everyday running of your business. “The biggest development for sole traders is OCR (optical character recognition) technology, whereby the accounting package self-populates from a photo that the user takes of their receipt. This removes the need for onerous filing of receipts and makes the process instantaneous,” said Clare Bowen, director of Monahans accountancy. “This is invaluable when users are on the road, going from job to job. When linked to a card payment platform, invoices can be sent directly to clients and the user therefore gets paid quicker.”
As we’ll note a bit later, integrations with platforms you already have an account with can streamline your business processes. “You should also look at how easy it is to get data and information out of the software,” said Smith. “For example, can you export the accounts into another package? Is it easy to interact with other platforms? These are the things that will slow you down.”
Ease of use
Of course, having sophisticated functionality isn’t any good if the software is clunky and difficult to use. “Accounting should be something you can do while you’re out and about, anywhere and at any time, instead of in front of a spreadsheet on a Sunday afternoon,” said Bowen. “The key for these platforms to be of use to sole traders is that they need to be relatively basic, without all the high-end capacity that you might otherwise need for a larger corporation.”
She warned of apps that are pared-down versions of bigger platforms which are generally used by those who are VAT-registered, i.e. those whose taxable turnover exceeds the £85,000 threshold. “These are a little pricier and therefore less suited to sole traders,” she added.
>See also: Sole traders and VAT
Evolving with your business
Try and go for software that will suit your business in the future as well as today. “Above all, you should invest in accountancy software that will evolve alongside you and your business, with the agility to grow and include new capabilities as and when required and choosing software which can be easily updated to take account of any changes in tax legislation, such as MTD, is critical,” said Thorne.
How your accountant can help
Your accountant can give you further guidance on the right accounting software for you as a sole trader, but they may also be able to provide you with a software licence at a reduced rate, according to Smith. However, they might prefer for you to use the one that they’re familiar with, so be prepared for that.
Bowen advises having a good relationship with your accountant so you don’t lose track of the numbers. “That’s going to become more important when Making Tax Digital rules are extended to all those who have a self-employed (and property) income of more than £10,000, from April 2024. From this date, you’ll have to submit quarterly returns but with the use of software, the idea is that this process is as efficient as possible. That’s why I’d advise any sole trader who isn’t already on these systems to start using them, so that they’re seeing the benefits and aren’t caught out last minute.”
>See also: Hiring an accountant: A small business guide
Which accounting software is right for me as a sole trader?
Now, on to the accounting platforms themselves. As mentioned, they offer largely similar functionality but there may be features that stand out to you and your business’ needs. Here is an introduction to some of the top products on the market, in order of their cheapest package. More details on each product are listed below.
Sage
For sole traders looking to simplify finances and focus more on growing their business, Sage offers a powerful, HMRC-recognised cloud-based solution that combines essential bookkeeping tools with the cutting-edge convenience of AI automation.
Designed to take the stress out of self-employment accounting, Sage helps you manage your income, expenses, tax returns, and cash flow—all from a single, user-friendly dashboard.
Key Features
- Smarter Invoicing: Create, personalise, and track invoices easily. Automate reminders to help you get paid on time and maintain healthy cash flow.
- Bank Feeds and Reconciliation: Connect your bank account to import transactions automatically. Apply smart rules to match, transfer, or reconcile with minimal effort.
- AI-Powered Automation: From auto-capturing receipts to generating insights and reminders, Sage Copilot helps minimise manual entry and improve accuracy.
- Self-Assessment Support: Simplifies SA103 submissions by automatically matching income and expenses—cutting down errors and saving time.
- Cash Flow Dashboards and Reporting: Gain real-time visibility into your finances, with clear, customisable dashboards and detailed reports to help you plan ahead.
Pros
- Time-saving automation through AI-powered features like Sage Copilot and receipt capture
- Fully compliant with HMRC and Making Tax Digital (MTD) for VAT returns.
- Flexible plans that can scale as your business grows
Cons
- Some valuable features like receipt capture and budgeting are only available on higher-tier plans
- May require a learning curve for users unfamiliar with accounting platforms
Pricing
| Plan | Price (Excl. VAT) | Key Features |
|---|---|---|
| Accounting Start | £18 per month (90% off for 12 months) | Sales invoices, bank reconciliation, VAT submission, MTD-ready, Sage Copilot |
| Accounting Standard | £39 per month (90% off for 12 months) | All Start features plus quotes, cash flow forecasting, CIS, receipt capture (30) |
| Accounting Plus | £59 per month (90% off for 12 months) | All Standard features plus budgeting, multi-currency invoicing, inventory tools |
Xero
Xero is a leading cloud-based accounting platform trusted by millions of small businesses worldwide. For sole traders, it offers an affordable, HMRC-recognised way to stay on top of finances, streamline daily admin, and prepare for Making Tax Digital (MTD) with ease. With real-time insights, time-saving tools, and flexible pricing, Xero helps sole traders work smarter—not harder—while keeping full control of their business finances.
Key Features
- Send Invoices and Quotes: Create and send professional invoices and quotes on the go, helping you get paid faster and keep client communication seamless.
- Bank Reconciliation: Automatically import and reconcile your bank transactions to keep your accounts accurate and up to date with minimal manual input.
- MTD for Income Tax Ready: Xero’s compliance with Making Tax Digital ensures you’re fully prepared for digital tax reporting.
- Capture Receipts and Bills with Hubdoc: Simply upload or snap photos of your bills and receipts. Hubdoc extracts the details for faster expense tracking and record-keeping.
- Cash Flow Snapshot: Access short-term cash flow forecasts and business performance dashboards to make informed financial decisions.
Pros
- Designed to grow with your business, from basic needs to more advanced features
- Fully HMRC-recognised and ready for MTD for Income Tax and VAT
- Optional add-ons like CIS submissions and payroll allow you to tailor features to your specific needs
Cons
- Entry-level plans include limitations on invoices and bills per month
- Core features like project tracking and multiple currencies are restricted to higher-tier plans
- Add-ons like payroll and CIS submissions come with additional costs
Pricing
| Plan | Price (Excl. VAT) | Key Features |
|---|---|---|
| Simple | £0.70 per month (Usually £7) | 10 invoices, quotes, MTD for Income Tax, bank reconciliation, Hubdoc, cash flow |
| Ignite | £1.60 per month (Usually £16) | 20 invoices, quotes, VAT submissions, 10 bills, CIS automation |
| Grow | £3.30 per month (Usually £33) | 5 bill payments, 5 payroll users, expense claims (5 users), VAT & CIS |
| Comprehensive | £4.70 per month (Usually £47) | 10 bill payments, 10 payroll/expense users, project tracking, advanced cash flow |
| Ultimate | £5.90 per month (Usually £59) | 15 bill payments, 10 project users, multi-currency, analytics plus |
*All plans include 90% off for 6 months when purchased by 30 June 2025.
Intuit QuickBooks
QuickBooks is a well-established and highly trusted accounting solution, known for its flexibility and ease of use. With HMRC recognition for Making Tax Digital (MTD), robust support, and powerful AI tools, it’s an ideal choice for sole traders looking to streamline financial tasks and stay in control of their business.
QuickBooks gives you everything from Self Assessment prep to real-time cash flow insights, with features that grow alongside your business—no long-term commitment required.
Key Features
- Self Assessment & MTD for Income Tax Ready: QuickBooks helps sole traders prepare and stay compliant with MTD and Self Assessment, including AI-supported tax readiness.
- Smart Invoicing & Estimates: Easily send invoices and quotes, and even allow customers to pay directly from the invoice to speed up payments.
- Income & Expense Tracking with AI: Separate personal and business finances, track cash flow, and categorise transactions automatically with AI-powered tools.
- Receipt and Mileage Capture: Upload or photograph receipts and track mileage effortlessly—ideal for managing tax-deductible expenses.
- Free Onboarding and Support: Get real help from real people with free onboarding sessions and ongoing support included in all plans.
Pros
- Simple, intuitive setup ideal for non-accountants
- AI tools help automate admin and provide useful insights
- Strong tax compliance features, including Self Assessment and VAT
Cons
- VAT and CIS functionality only available in higher-tier plans
- Some essential features (like multi-user access and currency tracking) require more expensive plans
- Payroll, stock tracking, and advanced analytics require additional fees or upgrades
Pricing
| Plan | Price (Excl. VAT) | Key Features |
|---|---|---|
| Sole Trader | £1 per month (then £10) | Self Assessment, MTD ITSA, invoicing, AI income/expenses, cash flow, receipts |
| Simple Start | £8 per month (then £16) | Adds VAT filing, CIS returns, payable invoices, VAT reminders |
| Essentials | £16.50 per month (then £33) | Adds 3 users, bill management, employee time tracking, multi-currency |
| Plus | £23.50 per month (then £47) | Adds stock tracking, budgeting, 5 users, project profitability |
| Advanced | £46 per month (then £115) | Adds batch invoicing, Excel reports, automation, backup & restore, 25 users |
*All plans include free for 1 month and discounted pricing for 6 months. VAT not included.
Freshbooks
FreshBooks is a cloud-based accounting platform that offers a simple, modern solution for freelancers and business owners. With a 30-day free trial and 50% off for the first 3 months, it’s easy to get started. Designed to simplify invoicing, expense tracking, and VAT filing, FreshBooks combines powerful tools with a user-friendly experience that scales with your business.
Whether you’re just starting out or managing a growing client base, FreshBooks gives you the ability to automate admin, collaborate with team members, and keep your business finances organised—all from one clean dashboard.
Key Features
- Invoicing and Payments Made Easy: Send unlimited invoices and quotes, accept payments by credit card or direct debit, and lower your transaction cap as you upgrade.
- VAT-Compliant and HMRC-Ready: Submit Making Tax Digital (MTD) VAT returns directly to HMRC, helping you stay compliant with no stress.
- Client and Project Management: Manage client profiles, send proposals, set up retainers, and track profitability on individual projects with ease.
- Automatic Data Capture: Scan and store receipts and bills, track expenses, and pull accurate reports for tax time—all with minimal manual input.
- Flexible Collaboration and Support: Invite your accountant, add team members as needed (£8 per user per month), and access helpful reports and dashboards.
Pros
- Clean, modern interface with excellent mobile access
- MTD-compliant VAT filing included in all plans
- Good scalability for growing businesses
- Easy to set up recurring invoices and client retainers
Cons
- Limited clients in lower-tier plans
- Some automation features only available in Premium or higher
- Team members and advanced payments cost extra (except in Select plan)
Pricing
| Plan | Price (Excl. VAT) | Key Features |
|---|---|---|
| Lite | £7.50 per month (was £15) | Invoicing for up to 5 clients, expense tracking, quotes, MTD VAT filing |
| Plus | £12.50 per month (was £25) | 50 clients, recurring invoices, proposals, accountant access, receipt scanning |
| Premium | £17.50 per month (was £35) | Unlimited clients, project profitability, custom email templates, bill capture |
| Select | Custom pricing | Includes 2 users, exclusive support, no FreshBooks branding, migration help |
Team Members: £8 per person per month
Advanced Payments: £15 per month (included in Select)
All plans 50% off for 3 months + 30-day money-back guarantee
Ember
If you’re a freelancer or sole trader in the UK, Ember offers everything you need to manage your finances with less stress—and no spreadsheets. Its dedicated sole trader plans combine powerful automation with real human support, making it easy to stay compliant, save time, and focus on running your business.
Whether you’re just getting started or managing a steady income, Ember connects directly with your bank, categorises your transactions using AI, and gives you real-time insights into your tax position. And if you need expert help, qualified accountants are on hand to assist with filings and questions.
Key Features
- AI-powered bookkeeping that learns your business and categorises transactions automatically
- Real-time tax estimates so you’re always prepared for what you owe
- Direct filing to HMRC for Self Assessment and VAT returns
- Deadline reminders to keep your finances on track
- One-click bank reconciliation with support for all major UK banks
- Expert accountant support available on paid plans
Pros
- Plans tailored for sole traders at every income level
- Free option available for new or low-revenue businesses
- Saves time with automation and categorisation rules
Cons
- Limited features on the free plan
- No phone support
Pricing
| Plan | Price (Excl. VAT) | For |
|---|---|---|
| Starter | Free | Sole traders earning under £1,000 per month |
| Pro | £7.50 per month (£90 per year) | Sole traders earning up to £5,000 per month |
| Unlimited | £24 per month (£288 per year) | Sole traders earning over £5,000 |
Coconut
If you’re a sole trader, freelancer, or landlord tired of wrestling with spreadsheets and shoeboxes full of receipts, Coconut is designed specifically for you. It’s not just accounting software – it’s a stress-reducing tool that brings all your business finances together in one simple app.
Built for the self-employed, Coconut lets you manage expenses, send professional invoices, track income, and prepare for tax time with zero hassle. You don’t need to be an accounting expert – it does the hard work in the background, so you can focus on getting paid and doing what you love.
Key Features
- Real-time profit tracking: Always know how your business is performing
- Instant invoicing: Create and send branded invoices in minutes, even on the go
- Effortless expense tracking: Snap receipts, tag expenses, and claim with confidence
- Self Assessment and MTD-ready: Submit with ease or share with your accountant
- Automatic bank feeds: Syncs with 30+ UK banks and credit cards
- Mobile-first, but also desktop friendly: Manage your accounts wherever you are
- Secure & FCA authorised: With bank-level protection built in
Pros
- Specifically designed for sole traders and small businesses
- Clear, simple interface ideal for non-accountants
- No guesswork: see how much tax to set aside throughout the year
Cons
- No tiered plans – just one all-in subscription
- No built-in payroll or VAT-only option (focused on Self Assessment)
Pricing
| Plan | Price | Key Features |
|---|---|---|
| Monthly Plan | £9.95/month | All features: bank sync, invoices, expense tracking, tax estimates, and MTD submissions |
| Annual Plan | £99/year (save 2 months) | Everything in the monthly plan, but cheaper – ideal for regular freelancers and sole traders |
IRIS KashFlow
KashFlow offers a straightforward way for sole traders, freelancers, and small business owners to stay on top of their finances without needing an accounting background. With an intuitive interface, strong automation features, and cloud access, KashFlow helps you save time on admin and stay compliant with ease. Whether you’re sending invoices, tracking expenses, or handling VAT returns, KashFlow’s bookkeeping software is built to simplify the process and give you more time to focus on running your business.
Key Features
- Simple Invoicing: Create and send quotes or invoices in a few clicks—track status and get paid faster.
- Bank Feeds & Reconciliation: Sync your business bank accounts to automatically import and reconcile transactions.
- VAT Filing Made Easy: Submit VAT returns directly to HMRC—perfect if you’re MTD-registered.
- Receipt Capture on Mobile: Snap and upload receipts via the free mobile app to track expenses on the go.
- Mileage & Expense Tracking: Log mileage and business expenses quickly, ensuring you claim every deduction possible.
Pros
- Great for new sole traders – Starter plan covers the essentials at a low cost
- Accessible on desktop and mobile – Do your books from anywhere
- Automatic reminders and easy reporting – Stay compliant and in control
Cons
- Limited invoicing on Starter plan – Only 10 invoices per month unless you upgrade
- Interface feels slightly dated compared to modern competitors
- Payroll features locked behind more expensive plans – Not ideal if you plan to hire
Pricing
| Plan | Price | Key Features |
|---|---|---|
| Starter | £12.50 per month (£1.25 per month for first 6 months) | 10 invoices/month, 25 bank transactions, VAT returns, mobile app, receipt capture |
| Business | £25.50 per month (£2.55 per month for first 6 months) | Unlimited invoices, unlimited bank transactions, multi-user, mileage tracking |
| Business + Payroll | £34.00 per month (£3.40 per month for first 6 months) | All Business features plus payroll for up to 5 employees |
ClearBooks
ClearBooks is a UK-based accounting platform designed to help sole traders and landlords stay organised, submit tax updates to HMRC, and keep their business finances in check. Whether you just need the basics or want more advanced reporting tools, Clear Books offers scalable plans tailored to your needs.
Key Features
- HMRC-recognised for Making Tax Digital (Income Tax & VAT)
- Easily record income and expenses
- Connect bank feeds with auto-matching
- Create and send invoices with custom branding
- Access a growing set of reports and financial tools
Pros
- Free MTD-compatible plan ideal for new sole traders
- Scales well with your business as it grows
- Good support for both VAT and construction industry needs
Cons
- More advanced features locked behind higher-tier plans
- Interface is less modern compared to newer platforms
- Pricing increases sharply as features are added
Pricing
| Plan | Price (Excl. VAT) | Key Features |
|---|---|---|
| MTD Income Tax Free | £0 per month | MTD Income Tax updates, record income/expenses, invoicing, bank feeds, no limits |
| Small | £13.50 per month (£6.75 per month for first 3 months) | Everything in Free, plus full reporting, quotes, payment reminders, integrations |
| Medium | £27.90/mo (£13.95 per month for first 3 months) | Adds VAT submissions, CIS, purchase orders, budgets, advanced reporting |
| Large | £36.90/mo (£18.45 per month for first 3 months) | Adds project accounting, multi-currency, fixed assets, employee expenses |
FreeAgent
FreeAgent is an HMRC-recognised accounting tool tailored for UK sole traders. With automation, insightful dashboards, and mobile functionality, it’s built to make daily admin easier while keeping you in control of your finances and taxes.
Key Features
- Invoicing, estimates, and online payments in one place
- MTD-ready VAT and Self Assessment filing directly to HMRC
- Smart receipt capture and automatic expense tracking
- Built-in project and time tracking tools
- Real-time tax timeline, cashflow forecasts, and automated bank feeds
Pros
- Excellent tax tools including Self Assessment and real-time tax timeline
- Free plan available for certain bank customers
- Comprehensive mobile app and automation features
Cons
- Receipt capture limited to 10 per month without £5 add-on
- No tiered feature set—price the same regardless of business size
- Amazon integration requires extra monthly fee
Pricing
| Plan | Price | Key Features |
|---|---|---|
| Free | £0 per month | Full access to all core features as long as you maintain an eligible account |
| Monthly | £19 per month (£9.50 per month for first 6 months) | Invoicing, expenses, tax filing, bank feeds, time tracking, project management |
| Annually | £190 per year (£95 for first year) | Same as monthly but with 20% savings when billed annually |
Crunch
Crunch offers an all-in-one accounting package designed specifically for sole traders, combining easy-to-use software with unlimited expert accountant support. It helps you save time on admin, stay compliant with HMRC, and reduce your tax bill with built-in tax optimisation.
Key Features
- Self Assessment tax returns included and filed on your behalf
- Unlimited access to expert UK accountants with no extra fees
- Automated expense and invoice management to save time
- Making Tax Digital (MTD) Income Tax Self Assessment ready
- Mobile app to manage your accounts anywhere, anytime
- Personal tax estimates based on your actual business performance
- Dedicated client management and HMRC registration support
Pros
- Unlimited accountant advice included at no extra cost
- Transparent pricing with no hidden fees
- Built-in tax optimisation to potentially save you money
Cons
- Pricing starts low only with promo; regular price is higher
- Limited to sole traders; no multi-user business plans detailed
- No detailed breakdown of software features compared to some competitors
Pricing
| Plan | Price | Key Features |
|---|---|---|
| Sole Trader Pro | £1 per month + VAT for first 3 months (then £27) | Self Assessment filing, unlimited accountancy support, HMRC registration, dedicated client management |
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