Time is a precious commodity for sole traders and all self-employed people. You will likely find yourself working on multiple projects with tight deadlines to meet.
On top of that there are other responsibilities all sole traders face such as marketing your business and winning new work. Another obligation that can take up a lot of time but can’t be avoided is accounting and financial management.
This is where sole trader accounting software comes in. The origins of accounting software can be traced back to over 40 years ago, but it really started to gain traction for sole traders and small businesses in the 2000’s.
Cloud accounting then helped to increase functionality and proliferation and now in 2023 accounting software is an indispensable tool for sole traders and small businesses. In this blog post we’ll examine why and look at the many benefits.
Easily Ensure Tax Compliance
Effective tax management and ensuring compliance with tax regulations is essential for all businesses. The last thing any small business owner needs is an HMRC investigation into their tax affairs and the possibility of being hit with financial penalties for non-compliance.
Sole trader accounting software can help to optimise your tax position and avoid any investigations or penalties.
Optimise Your Tax Position
Sole trader accounting software can help you identify allowable expenses which can contribute to reducing your overall tax liability so you can keep more of your earnings. If you work with an accountant they can provide advice and guidance in this regard.
Stay Abreast of Legislative Changes
Tax rules and regulations are dynamic and constantly change over time. Sole trader accounting software is updated to take any legislative changes into account which helps you remain compliant.
Accurate Tax Submissions and Reporting
Tax reporting is massively simplified through inbuilt automation. Your tax returns can be calculated in the background while you work and submit your returns to HMRC digitally.
Organised Record Keeping
Keeping your financial records organised can be a big challenge for busy self-employed people, but it’s an essential part of accurate accounting and bookkeeping. Sole trader accounting software simplifies the process and helps to structure your record keeping and financial organisation.
Digital Document Storage
Sole trader accounting software enables you to scan, upload and digitally store your financial documents such as receipts and invoices. They can be categorised for easy access if and when they’re needed without having to search through piles of paperwork.
Track Your Expenses
Receipts can be uploaded and expenses can be tracked and categorised so you can easily keep on top of your record keeping and expense management and be ready when tax submission time comes around.
Categorise Your Transactions
As accounting software integrates with your bank account, all your business financial transactions are logged and can be easily categorised to keep things organised. They can be easily searched if there’s anything you need to check.
Simplify Invoicing and Payments
Accurate and timely invoicing and getting paid promptly is crucial to keep your cash flow ticking over and sole trader accounting software makes this a much easier process.
Easy Payments
Sole trader accounting software offers easy integration with payment providers which means you clients can securely, quickly and conveniently pay you online.
Automated Invoicing
Invoices can be sent automatically and if a client is slow to settle up, payment reminders can be automated to help you get paid. Reminders can also be configured for unpaid invoices so you won’t miss a payment..
Create Branded Invoices
Invoices can be customised to reflect your brand and create a professional image all of which helps to improve perception of your business with your clients.
Get Meaningful Financial Insight
With accounting software you get real-time access to your businesses’ financial information. This is key to understanding your current financial health and making informed decisions based on accurate and current financial data.
Real-Time Reporting
Inbuilt automated functionality enables real-time generation of key financial reports including profit & loss, cash flow statements and balance sheets.
Key Metrics At A Glance
Configurable dashboards provide an at-a-glance real-time overview of the key financial metrics that matter to you.
Automation Saves Time And Reduces Errors
Time can be in very short supply when you’re self-employed and some of the key benefits of sole trader accounting software are how much time it can save you and how it can minimise errors. You can let the accounting software accurately and efficiently do the work so you can focus more of your time on core activities with peace of mind that your accounting obligations are in hand.
Automated Calculations
To err is human and when accounting and bookkeeping is done manually, the chance of mistakes occurring increases significantly. Mistakes will likely lead to non-compliance and HMRC attention. But gone are the days of sifting through piles of paperwork or battling with multiple spreadsheets and formulas.
With sole trader accounting software, your accounts are automatically collated and prepared in the background while you work. VAT returns, self-assessment and your final accounts can be calculated and prepared for you meaning there’s no panic when year-end or submission deadlines come around.
Automated Data Entry
Data entry can be automated which eradicates the possibility of errors associated with manual data input. For example, receipt scanning functionality mitigates this risk and automated bank feeds can import and categorise your transactions with no need for manual intervention, making data input both accurate and effortless.
Easily Manage Your Accounts
With cloud-based accounting software you can easily access your accounts from anywhere you have an internet connection. This provides flexibility and control as you can manage your business accounts on the go.
Mobile App
Through an accounting software mobile app you can easily view and manage your business finances anywhere and at any time. Invoices could be created and sent and expenses can be logged on the go as they’re incurred to keep on top of things and avoid backlogs when tax return time is looming.
Collaborate And Share The Load
Because accounting software is cloud-based you can grant others access to your accounts meaning you can collaborate with accountants and business partners no matter where they’re located.
FreeAgent Online Accounting Software
Using accounting software for sole traders can be transformational. As well as ensuring Making Tax Digital compliance, it’s an accounting solution that enables self-employed people with little or no financial or accounting knowledge to manage their business finances efficiently and successfully.
Through automation it can save you heaps of time as well as minimising the chances of errors and ensuring tax compliance. Real-time reporting gives meaningful insight into your business finances enabling you to make informed decisions and help your business to flourish and it can scale with you as you grow.
Gorilla Accounting are FreeAgent Platinum Partners and are proud to provide FreeAgent free of charge to all our clients inclusive in our great value accounting packages. FreeAgent is award-winning, market-leading accounting software that’s trusted by over 100,000 people.
Our sole trader accountancy package is just £50 + VAT per month and as well as getting full access to FreeAgent and all your business and personal accounting needs expertly handled, you’ll receive unlimited support and advice from your own dedicated accountant and a same day response guarantee. To find out more about FreeAgent or our sole trader accounting service, please call us on 0330 024 0406 or request a call back here.
