Here, we explore how to find the right accounting software for you as a sole trader, along with some of the best platforms around
Having the right accounting software helps your sole trader business immeasurably.
While you’re handling the day-to-day running of your business, accounting software saves you hours of work and mountains of receipts flooding out of shoeboxes. It can also help you identify allowable expenses and reduce the risk of errors in your tax return.” Software doesn’t automatically reduce tax.
And with Making Tax Digital (MTD) for Income Tax having been phased in from April 2026 (when it applies depends on your gross income from self-employment), the sooner you invest in compliant software for record-keeping and filing the better.
With all that in mind, we’ll be taking a look at how to find the right accounting software for your sole trader business 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.
Making Tax Digital for Income Tax was introduced on 6 April 2026 for sole traders and landlords with combined qualifying income of more than £50,000 from self-employment and property. The threshold falls to more than £30,000 in April 2027 and more than £20,000 in April 2028.
Those affected must keep digital records of their income and expenses, submit quarterly updates to HMRC and complete their annual tax return using compatible software. It’s therefore worth checking whether your chosen accounting package supports MTD for Income Tax, as well as MTD for VAT if you’re VAT-registered.
>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.”
Some accounting platforms offer more advanced features for VAT-registered businesses, which generally must register once their VAT-taxable turnover exceeds £90,000 over a rolling 12-month period. If you’re below this threshold, a simpler package may be sufficient, although you’ll still need to consider your MTD for Income Tax obligations.
>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.
>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. More details on each product are listed below.
