“There's no business like show business, but there are several businesses like accounting.” - David Letterman
When you do your accounts as a sole trader, there are millions of things you have to work on. This can involve invoicing, expenses, and VAT records. However, it’s very easy to get lost in all the numbers.
While some sole traders might have studied accounting or finance, the vast majority of them won’t have. Sole traders have a lot of hats to wear and it can be difficult for them to keep on top of it all. This means they have to develop these skills themselves and become an amateur accountant alongside whatever their main role is.
Is accounting taking up too much of your time?
You can use accounting software solutions to make things simpler.
In this article, we'll be looking at why sole traders should use accounting software, some of the best solutions out there, and what they can help you to do.
Why Should Sole-traders Use Accounting Software?
You’ll probably be asking yourself why you should invest in accounting software. As a sole trader or freelancer, you have to keep a record of your sales and income, business expenses, VAT records (if you’re registered for VAT), and PAYE records if you employ people. This is a lot of stuff to keep track of. It can also take a lot of time to manage all of this. Accounting software is usually far more powerful than an Excel spreadsheet.
They can help you avoid errors on invoices and quotes, for example. To choose the right one for you, you need to think about your budgets, what you need from accounting software, and what kind of technical and customer service support you’ll need.
Furthermore, the software can ensure that everything you do is above board and can streamline processes and interactions with customers. Overall, this means that your business can run more effectively.
So which accounting software should you choose?
Here are our favourites!
FreshBooks is a popular accounting tool for the self-employed, sole traders, and small business owners because it's rather cheap.
This service allows businesses to send invoices and estimates and also track their expenses. This bookkeeping service is easy to use, allowing you to spend less time on your accounts and more time running your business!
FreshBooks is also based on the cloud so you can access it from various devices, which is great for freelancers whose work takes them all over the place!
When it comes to bookkeeping, sole traders, the self-employed, and small business owners have different needs to those on the books of a major multinational corporation. Fortunately, Sage offers accounting software for self-employed business owners.
With quick quotes, you can easily create quotes and convert them straight into invoices. You can also use the Sage mobile app to send these invoices from anywhere.
You can also connect your bank account to Sage Accounting for freelancers and sole traders and import your transactions automatically so that you don't have to waste time inputting all this information manually each month. Sage Accounting can also be used to share information with your accountant to do your HMRC tax returns.
By this point, you've probably realised that almost every bookkeeping program or service has the word "books" in its name. In any case, Clear Books is another great service for tracking your accounts, expenses, and invoices.
This is also a service whose features are designed with UK-based small businesses, sole traders, contractors, and freelancers in mind.
Give it a try!
Xero is sometimes touted as one of the more expensive accounting solutions out there, but it's also quite a powerful solution, especially for sole traders, the self-employed, contractors, or small business owners.
It allows you to pay bills, submit VAT returns, claim expenses, connect to your bank accounts, accept payments, track projects, and manage payroll.
It also offers powerful analytics, inventory management, and reporting.
Like a lot of other accounting software solutions, there's a free trial available so you can give it a go and see if it's for you and your business.
Do you know QuickBooks?
With over 4 million users around the world, this accounting software is one of the most popular. The idea is to simplify billing, invoicing, quotes, and your business accounting.
QuickBooks also offers a lot of automation, which can save you a lot of time when it comes to your accounting.
There are different subscriptions available depending on how much assistance you need and there’s also a trial period available for you to try out the software without having to pay for it.
You can use it to create and send invoices, track business and employee expenses, allocate bank transactions to invoices and purchases, and create reports and tax returns.
Zoho Books offers end-to-end accounting to users. This means you can manage everything from invoices to expenses. With the software taking care of most of the mundane tasks, you'll have more time to focus on running your business and making it more successful.
You can easily create and send purchase orders, upload expense receipts, and keep track of payments you've made.
Zoho is also a part of a platform that features over 40 different apps that all come with integration and its smartphone app so you can access your finances wherever you are.
Again, there's a free trial available, but for Zoho Books, it's only for 14 days.
As you’ll have understood, accounting is important for sole traders and small businesses. The software solution you choose needs to match your business needs and your budget.
Once you’ve got the right tools, nothing should stop you. Your accounts should be all be in order, leaving you more time to focus on your business!
If you're interested in learning more about economics, finance, or accounting, consider getting help from one of the many talented and experienced private tutors on Superprof.
You can learn about managing your money and accounting with face-to-face tutorials, online tutoring, or group classes. Each type of tutorial comes with its pros and cons so think carefully about what you're looking for in a tutor, how much you can afford to pay, and how you like to learn.
Face-to-face tutors can offer a bespoke service and teach you whatever you'd like to learn. They tend to charge more than the other types of tutoring since they plan and tailor their lessons to their students and will sometimes have to travel to their students. However, since every minute of each tutorial is spent teaching you, this is arguably the most cost-effective way to learn.
Group tutorials are great for those on a budget. If you're the kind of person who likes learning in a social environment, this type of tutoring could be for you. Since you'll all be sharing the cost of the tutor's time and expertise, these types of lessons tend to work out cheaper per student per hour. Of course, you can't expect the tutor to tailor the lessons just to you, though.
If you can't find any suitable or available tutors in your local area, consider learning with an online tutor. You can look for tutors all over the UK and around the world to teach you via webcam. Of course, if you're learning about accounting, you might want to make sure that they're familiar with the legal requirements in the UK for accounting as you don't want to get any of it wrong.
Fortunately, a lot of the tutors on Superprof offer the first lesson for free. These free lessons are a great opportunity for students to try out several potential private tutors before deciding on which one is right for them. It's a good idea to outline what you're looking for in a tutor and how much you can afford to pay before you start shortlisting potential tutors and contacting them for private lessons.
You might be spending a lot of time with your private tutor so remember that it's important that they can teach you what you need to learn and that you get on well with them.
The platform that connects tutors and students