Why is using software better for my sole trader business?

We recommend using software even if you are self employer (or a freelancer, or a sole trader, or a solopreneur – whatever you wish to call yourself!). Despite all the delays with MTD ITSA (Making Tax Digital for Income Tax and Self Assessment), we still recommend using software for your business, no matter the size. Why? Primarily for efficiencies, streamlining, and process improvement. But also for feeling in control of your business and reducing overwhelm. Most of the softwares designed for MTD ITSA in future enable you to keep an ongoing tally of your income and outgoings, along with an estimated tax liability. You can attach receipts, keep everything neat and tidy, and reduce that huge admin burden that so many face each year.

We have, until recently been recommending 1tap, however this is no longer being developed. We promote Coconut as we feel it offers the best service and user interface. It doesn’t require you to have a dedicated business bank account (although we still recommend you have one!) and it enables you to also link your personal accounts, any rental properties, and also raise sales invoices and keep tabs on overdue invoices. You could also look at Dext, Hammock (for landlords only), Quickbooks SelfEmployed or Xero Go.

If you’re planning on working with an accountant in the near future, we recommend checking with them first if there is a preference, otherwise you might find you either have to swap software, or you can’t work with the accountant you want to!