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Are you looking to up your bookkeeping game and move away from traditional spreadsheets (or worse–hardcopy financial ledgers) but don’t know where to start?
Being a sole trader often means coordinating numerous tasks within tight deadlines.
But believe me, having an efficient and streamlined bookkeeping software by your side is just as important for sole traders as for larger teams.
The trouble is…with so many bookkeeping solutions out there, which is the right solution for you?
Top 5 Bookkeeping Software for Sole Traders
In this blog post, I’ll explore my top 5 bookkeeping software solution options for sole traders (sole proprietors).
These solutions are easy to use, affordable, and perfect for busy sole traders juggling multiple roles.
The best part is I’ve done all the hard work for you! All you need to do is choose what works best for you.
So, what are the top 5 best bookkeeping software for sole traders?
1. Sheetify Bookkeeping
2. Xero
3. FreshBooks
4. Quickbooks
5. Wave
What Is Bookkeeping Software For Sole Traders?
While accounting refers to the broader task of managing finances and strategic financial planning, bookkeeping delves into the specifics of daily financial transactions.
Being self-employed involves having to submit your own tax returns. And to do that, you need accurate bookkeeping records, right?
Well, bookkeeping software for sole traders is essentially a tool that helps you efficiently and accurately handle and streamline your finances.
From tracking your daily expenses and income to creating invoices and managing tax calculations, bookkeeping software records every financial activity meticulously.
Read more: Top 5 Bookkeeping Templates For Small Businesses.
Why Should You Use Sole Trader Bookkeeping Software?
As a sole trader, the burden of legal and financial accountability rests solely on your shoulders.
Therefore, it’s crucial to record your financial transactions accurately!
By using a bookkeeping software tailored explicitly for sole traders, you’ll automate the process of recording your financial transactions.
This ultimately leaves you more time to focus on growing your business (which is the goal, right?)
And while there may be an initial cost, bookkeeping software is significantly cheaper than monthly professional bookkeeping costs.
Bookkeeping software also significantly reduces the risk of human error, ensuring your financial records are always accurate and up to date.
Additionally, bookkeeping software protects your sensitive financial data from unauthorized access or breaches.
And finally, bookkeeping software provides sole traders with a transparent understanding of their financial standing at all times.
Have I convinced you that investing in a robust bookkeeping solution to record your daily transactions is imperative yet?
Read more: How Much Does a Bookkeeper Cost For Small Business?
Best Bookkeeping Software For Sole Traders
1. Sheetify Bookkeeping
Best Bookkeeping Software for Sole Traders that use Google Workspace.
Are you a sole trader looking for an affordable, straightforward, yet versatile Google Sheets bookkeeping solution?
Designed specifically for small and micro-entrepreneurs, Sheetify Bookkeeping transforms Google Sheets into a powerful tool for financial management.
How? Well, Sheetify Bookkeeping understands that many sole traders are already familiar with spreadsheets.
Which is why Sheetify was born! With the help of Sheetify Bookkeeping, you can manage your finances within a single Google Sheets spreadsheet.
That’s right; Sheetify Bookkeeping is a downloadable Google Sheets spreadsheet template available for just one payment of $47.
This one-time payment is perfect for budget-conscious sole traders seeking affordable bookkeeping solutions.
From day-to-day accounting tasks, income and expense tracking to tax calculations, goal setting, invoices, and much more, it’s all doable within Sheetify Bookkeeping.
Sheetify Bookkeeping comes ready with tailor-made formulas, structured headers, organized sheets, and an integrated Apps Script, making it incredibly user-friendly for beginners.
Sheetify Bookkeeping’s key features include:
- Income and expense tracking.
- Invoice and quote generation.
- Integrations with other Google Apps.
- Bookkeeping tasks.
- Goal tracking.
- Tax calculator.
- 7 dashboards.
- Automate and send reports.
In essence, Sheetify Bookkeeping makes managing the financial side of your sole trading venture effortless, efficient, and integrated.
Sheetify Bookkeeping also offers personalized package services for teams looking for a highly customized bookkeeping solution.
This allows you to focus more on growing your business while also keeping a tight rein on your finances!
I recommend Sheetify Bookkeeping for any sole trader already using Google Workspace or Google Sheets.
Read more about how you can use Google as a bookkeeping software with Sheetify Bookkeeping here.
2. Xero
The platform can be used as a bookkeeping solution or full-featured accounting software to make accounting tasks more straightforward and precise.
Thanks to the sleek, minimal interface, even complete novices with no experience can easily take control of their finances with Xero.
Xero’s lowest pricing plan (perfect for sole traders) is just $15 per month, making it a low-cost option for sole traders needing a robust yet easy-to-use financial management tool.
Its key bookkeeping features include:
- Real-time financial tracking.
- Easy invoicing and quote generation.
- Expense claims.
- Inventory management.
- Bank reconciling.
- Financial reports.
But that’s not all!
Xero can accept payments, track projects, file VAT returns, integrate with other platforms, pay employees, run payroll reports, manage multiple currencies, and more
Plus, the intuitive, full-featured mobile app means busy sole traders can create and send invoices, track payments, reconcile transactions, and more on the go.
One of the standout reasons for choosing Xero over other bookkeeping solutions is its flexibility and scalability.
For example, with any of Xero’s plans, you can add unlimited users without additional costs.
This lets you focus on your business growth journey without worrying about increasing expenses.
If you plan to scale and grow your business or expand your team, Xero will support you every step of the way.
3. FreshBooks
Best Bookkeeping Software for Sole Traders for complete beginners.
FreshBooks is another cloud-based bookkeeping software perfect for sole traders or independent contractors.
What distinguishes FreshBooks from its rivals is not one standout feature but instead its simplistic interface and user-centric tools that streamline financial management tasks.
This approach demystifies the perception that bookkeeping and accounting management must be complicated!
I recommend the ‘Lite’ pricing plan for sole traders, available for $19 monthly.
This plan allows you to send unlimited invoices (for five clients), track unlimited expenses, and send unlimited estimates.
Key features of FreshBooks include:
- Customizable invoicing.
- Expense tracking.
- Time tracking.
- Tax filing.
- Financial statements such as balance sheets.
- Direct credit card payments on invoices.
- Automated functions for expense management.
- Overdue payment follow-ups.
FreshBooks also recognizes the importance of project and team management functionalities.
This is why FreshBooks offers built-in time tracking, mileage, expense tracking, and file sharing with other tools like Monday.com or Asana.
By using Freshbooks, wave goodbye to pricey project management tools and say hello to one streamlined solution.
The time tracking feature is especially beneficial for freelancers who charge by the hour, allowing them to log hours per project and automatically generate accurate invoices.
Despite the lack of advanced options like inventory management, FreshBooks is an optimal, budget-friendly choice for sole traders seeking an easy-to-use bookkeeping software.
Read more: 5 Best Xero Alternatives.
4. QuickBooks
QuickBooks is another impressive bookkeeping solution ideal for freelancers, contractors, or sole traders.
The software offers four pricing plans starting from $35 a month. However, a highlight of QuickBooks is undoubtedly its ‘Solopreneur’ plan, available for just $10 per month.
Developed to simplify the management of income, mileage, expenses, and tax information, the solopreneur plan was specifically designed with one-person businesses in mind!
It offers a range of features, including:
- Customizable invoices and expenses.
- Easy setup and overall improved transaction management experience.
- Payment acceptance from PayPal, credit, debit, and Apple.
- Tax summary and details.
- Categorized business and personal expenses.
- Growth goals.
These features promise a significant reduction in the time spent on manual tasks, paving the way for streamlined financial management for sole traders!
The plan’s automatic mileage tracking is another valuable feature.
Essentially, you can leverage your smartphone’s GPS to save time and money when logging and categorizing mileage for tax purposes.
This tool effortlessly distinguishes between business and personal travel, allowing for easy transaction management!
This automatic mileage tracker is just one aspect of the self-employed plan that empowers business owners to take control of their finances efficiently.
If you’re a team of one and don’t plan to scale your team anytime soon, I recommend giving the QuickBooks soloprenuer plan a go!
However, if scalability is on your mind, you may be disappointed, as this plan can only support teams of up to one person.
5. Wave
Designed with sole traders’ and small business owners’ needs in mind, Wave is a free bookkeeping solution that doesn’t break the bank.
For sole traders, there’s already a mountain of other expenses to cover, from taxes, salaries, and rent to insurance, marketing, and stock.
So, adding another line item for costly accounting software? It seems unnecessary!
Enter Wave: The essential (and completely free) bookkeeping solution you’ve been searching for.
Wave offers all the core features you need to kickstart your finances – invoicing, tracking expenses, managing payroll, and straightforward reporting, all at no cost.
Here’s a snapshot of what Wave provides:
- Income and expense tracking.
- Tailored invoices.
- Essential reporting capabilities.
- Recurring invoices.
- Automated accounting tools.
- Support for multiple currencies.
- Double-entry accounting.
- A handy mobile app.
- Unlimited integration with credit cards and bank accounts.
And can you believe that the free plan also includes unlimited invoices, clients, and users??? Some paid bookkeeping services don’t even offer this!
It’s important to note that although Wave offers a completely free plan, you’ll still need to pay processing fees to accept any invoice payments.
Payroll products, coaching, and mobile receipt scanning tools can also be purchased as an add-on.
Nevertheless, Wave’s pricing strategy allows sole traders to use essential bookkeeping tools without upfront costs (then pay for expanded capabilities if needed).
If you’re on a strict budget or operating a not-for-profit business, Wave Accounting is a bookkeeping solution you absolutely must try!
What Is The Best Bookkeeping Software For You?
For sole traders, choosing the right bookkeeping software to manage and streamline your finances can be stressful.
Luckily, all the bookkeeping software contenders above are awesome options!
Sheetify Bookkeeping is the best choice for sole traders from any industry who are familiar with spreadsheets and the Google ecosystem.
Xero is a robust cloud-based bookkeeping and accounting software that supports sole trader growth and scalability.
On the other hand, FreshBook’s focus on ease of use and client invoicing makes it ideal for sole traders requiring time tracking and project management tools.
The QuickBooks soloprenuer plan is best for those focused on finding a solution with robust tax support.
And Wave is by far the best choice for budget-conscious sole traders!
The important thing to remember is that each software has its own advantages and disadvantages.
The best one for you will depend on your specific industry, requirements, budget, and level of accounting expertise!
Stews Final Thoughts
We have now reached the end of this top 5 bookkeeping software for sole traders guide!
So, which is the best option for you? Only you can answer that question!
It’s important to remember that only one or two will likely be the perfect fit for you and your business’s specific requirements.
Remember, most bookkeeping software options mentioned above offer free trials (and some, like Wave Accounting, even provide free basic plans).
So, why don’t you give a few of them a try? And when you do, let me know how you get on.
