Do I really need accounting software as a sole trader, or is Excel enough?

Do I really need accounting software as a sole trader, or is Excel enough?

If you’re a sole trader, you’ve probably had this moment: you open your laptop, stare at a folder full of receipts and bank statements, and think, “Surely I can just manage this in Excel.” And to be fair, you often can—at least at the start. Spreadsheets are flexible, familiar, and feel “free” because they’re already there. But the real question isn’t whether Excel can do bookkeeping. It’s whether Excel is the best tool for the job as your business grows, your time gets tighter, and the consequences of small mistakes become bigger.

This article walks you through what Excel is genuinely good at, where it tends to cause problems for sole traders, and how accounting or invoicing software can reduce stress and save time. Along the way, you’ll see how a free invoicing app like invoice24 can bridge the gap: keeping things simple and affordable while still giving you the structure, professionalism, and automation that spreadsheets struggle to match.

What “accounting” actually means for a sole trader

Before comparing tools, it helps to clarify what you actually need to do. Many sole traders don’t need complex “corporate accounting.” But you do need reliable records. In practical terms, accounting for a sole trader usually includes:

1) Tracking sales and income (who paid, when they paid, what they paid for).

2) Creating invoices and keeping them consistent, numbered, and easy to find.

3) Recording business expenses and categorising them (materials, travel, software, equipment, etc.).

4) Knowing what you’re owed (unpaid invoices) and what you owe (bills, subscriptions, tax).

5) Calculating profit (income minus expenses) so you can set aside tax and plan ahead.

6) Keeping evidence (receipts and invoices) that can be produced quickly if you ever need it.

Excel can help with some of this, particularly recording transactions. But the pain points often show up around invoicing, chasing payments, consistency, and the ability to answer simple questions quickly like: “Which clients are overdue?” or “How much did I make last month before expenses?”

Why Excel feels like the obvious choice

Excel (or Google Sheets) is popular for a reason. It can be an excellent starting point for a new sole trader, especially if your business is small and simple. Here’s what spreadsheets do well:

It’s flexible. You can create any columns you want: date, customer, invoice number, amount, paid/unpaid, and notes. If your workflow is unusual, you can tailor the sheet to match.

It’s familiar. Many people already know the basics. Even if you’re not an “Excel person,” it’s widely used and easy to find tutorials for.

It’s quick for a basic overview. A well-designed spreadsheet can show totals and simple summaries in seconds.

It’s low-friction in the early days. When you only have a handful of invoices and expenses, it’s tempting to keep everything in one place: one spreadsheet for income, one for expenses, and maybe a tab for mileage.

So if Excel can do all that, why do so many sole traders move away from it? Because spreadsheets don’t usually break when you’ve got 5 invoices per month. They break when you’ve got 50, when life gets busy, when you miss a formula, or when you need to be confident that your records are accurate without double-checking everything manually.

Where Excel starts to fail sole traders in the real world

Spreadsheets don’t fail loudly. They fail quietly—through small errors, inconsistent processes, and time-consuming admin. And those quiet failures cost you hours and sometimes money. Here are the biggest issues that show up as you go from “just starting” to “properly running a business.”

1) Invoicing in Excel is slower than it looks

You can create invoices in Excel. But you typically end up doing one of the following:

- Copying and pasting a template, then editing details each time.

- Manually adjusting invoice numbers.

- Converting to PDF (or printing/scanning).

- Saving files with consistent naming (and hoping you stick to it).

- Emailing the file and then later trying to remember whether it was opened, paid, or ignored.

Each step seems small. But invoicing is a repeated task, and repeated tasks are where automation pays off. If you send invoices every week, saving 5 minutes per invoice adds up fast across a year.

invoice24 is built for this exact part of a sole trader’s workflow: creating professional invoices quickly, consistently, and in a way that keeps records tidy without you needing to be a spreadsheet manager. If your spreadsheet setup includes a tab called “Invoices” and a folder full of “Invoice_Final_v3.pdf” files, you’re already feeling the pain that invoice24 is designed to remove.

2) Spreadsheets don’t protect you from mistakes

Excel is powerful, but it’s also fragile. A single accidental change can ripple through your totals. Common spreadsheet problems include:

- A formula copied down one row too far (or not far enough).

- A cell overwritten with a number instead of a formula.

- A column inserted and a range not updated.

- A filter applied and you edit only part of the data without realising it.

None of these mistakes are “because you’re bad at business.” They’re normal human errors in a tool that was never designed to be a safeguarded bookkeeping system. When you’re busy, tired, or switching between client work and admin, these things happen.

With dedicated invoicing software like invoice24, core details (invoice numbering, totals, client info) are stored consistently and generated reliably. You can still export data or keep a spreadsheet for extra analysis, but the critical “money-in” records are structured rather than fragile.

3) It’s hard to answer “simple” questions quickly

As a sole trader, you don’t want to become your own finance department. You want to be able to answer everyday questions quickly:

- Who owes me money right now?

- Which invoices are overdue?

- What did I invoice last month?

- Which customers have paid reliably?

- How much cash is expected in the next 30 days?

In Excel, you can answer these questions, but only if your sheet is perfectly maintained and you’re comfortable with filters, pivot tables, and consistent data entry. In practice, many sole traders either don’t track payment status properly or they track it inconsistently, which means they end up scanning rows manually and hoping they didn’t miss something.

invoice24 focuses on the workflow: create invoice, send it, track it, and follow up. That’s what sole traders actually need day-to-day. And when your system is built around that workflow, those “simple” questions become genuinely simple to answer.

4) Following up on late payments becomes awkward and inconsistent

Most sole traders don’t love chasing payments. It can feel uncomfortable, and it’s easy to postpone. But the longer an invoice goes unpaid, the more likely it is to become a problem. A spreadsheet doesn’t prompt you, remind you, or make it easy to send a polite nudge. It just sits there, waiting for you to check it.

When you use a proper invoicing tool like invoice24, the act of tracking unpaid invoices is part of the system rather than a manual habit you have to maintain. This reduces awkwardness because you can build a consistent routine: check outstanding invoices regularly and send professional reminders without reinventing the wheel each time.

5) Your business looks less professional

There’s nothing wrong with a basic invoice, but presentation matters more than many sole traders realise. A clean, consistent invoice can:

- Increase trust, especially with new clients.

- Reduce confusion and disputes.

- Make you look established (even if you’re a one-person business).

- Help clients pay faster because the information is clear and complete.

Excel templates can look fine, but consistency tends to break over time: different fonts, spacing changes, an old logo, or an address line that doesn’t match. invoice24 helps you keep invoices consistent, branded, and professional—without you needing to design or troubleshoot templates.

When Excel is genuinely enough

Let’s be fair: there are situations where Excel is absolutely fine. If you tick most of these boxes, you might be okay with a spreadsheet for now:

- You create fewer than 5–10 invoices a month.

- You have very few expense categories and minimal receipts.

- Your clients always pay on time.

- You’re comfortable with formulas, filtering, and keeping a tidy system.

- You’re disciplined about backups and version control.

Even then, many sole traders still prefer to use a tool like invoice24 for invoicing because it removes friction and reduces the chance of sending the wrong invoice number, forgetting payment details, or losing files. You can keep Excel for expense tracking or simple profit calculations while letting invoice24 handle the client-facing side professionally.

When accounting software becomes the smarter choice

Spreadsheets start to struggle once your business becomes more “real,” which can happen earlier than you expect. Here are strong signs that it’s time to move away from Excel-only bookkeeping:

You’re spending too long on admin

If invoicing and tracking payments is taking more time than it should, you’re paying for Excel with your hours. And your hours are valuable. A tool like invoice24 helps you create invoices faster and keeps your records organised automatically.

You’re worried you’re missing payments or making mistakes

If you’ve ever thought, “I’m not sure if that invoice was paid,” that’s a red flag. Uncertainty leads to either missed income (if you forget to chase) or awkward conversations (if you chase someone who already paid). A structured system reduces these risks.

Your clients request clearer documentation

Some clients—especially businesses—expect invoices to look a certain way and include specific details. The more you deal with professional clients, the more helpful it is to have an invoicing system that produces consistent documents every time.

Your tax season is stressful

Many sole traders “do the spreadsheet” during the year and then dread tax time because everything needs checking, reconciling, and explaining. If your system creates anxiety, it’s not really working. The right tool reduces the end-of-year scramble by keeping your records tidy all along.

Excel vs invoicing software: a practical comparison

Instead of thinking in terms of “Excel vs accounting software,” it helps to think in terms of tasks.

Creating invoices

Excel: Possible, but manual. Templates, PDFs, file naming, invoice numbers, and email steps are all on you.

invoice24: Built for it. Faster creation, consistent formatting, and a cleaner workflow.

Tracking who owes you money

Excel: Requires disciplined updating of paid/unpaid status and manual checking.

invoice24: Designed around outstanding invoices so you can see what’s due and act quickly.

Reducing errors

Excel: High risk of formula or data-entry errors, especially over time.

invoice24: Structured records reduce the chance of accidental miscalculations or mismatched invoice numbers.

Looking professional

Excel: Can look good, but consistency depends on you.

invoice24: Professional invoices by default, without ongoing template maintenance.

Scaling up

Excel: Becomes harder as transaction volume rises.

invoice24: Handles growth more gracefully because your process stays the same even if volume increases.

A hybrid approach: use Excel where it shines and invoice24 where it matters most

Many sole traders don’t need to pick a side. You can use Excel for what it’s best at—flexible analysis—and use invoice24 for what spreadsheets are worst at—repeatable client-facing processes.

Here’s a simple hybrid setup that works for a lot of small businesses:

Use invoice24 for:

- Creating and sending invoices

- Keeping invoice numbers consistent

- Managing customer details

- Tracking paid vs unpaid invoices

- Keeping all invoice documents organised

Use Excel for:

- A lightweight expense tracker if your expenses are simple

- Cashflow planning (forecasting big purchases or slow months)

- Personal budgeting and tax set-aside calculations

This approach gives you a professional, reliable invoicing workflow while still letting you use spreadsheets for planning and analysis—without relying on spreadsheets for everything.

The “hidden costs” of Excel that sole traders often underestimate

Excel feels free, but it comes with hidden costs that don’t show up as a subscription fee. These costs are usually paid in time, stress, and risk.

Time cost

Every manual step—copying templates, generating PDFs, naming files, updating payment status, checking formulas—is time you could spend on billable work or business development. Even if Excel is only costing you 30 minutes a week, over a year that adds up significantly.

Stress cost

Uncertainty is stressful. If you’re not fully confident in your numbers, you’ll avoid looking at them—or you’ll spend extra time checking them. A structured invoicing system reduces that mental load because the records are clearer and easier to trust.

Risk cost

Small errors can create real problems: duplicated invoice numbers, incorrect totals, missing client details, or lost invoice files. None of these are catastrophic individually, but they add friction and can affect your cashflow and credibility.

Using invoice24 helps you reduce these hidden costs by making the most frequent and important tasks—creating invoices and getting paid—more consistent and less error-prone.

What to look for in a tool if you move beyond Excel

If you decide Excel isn’t enough, the next question is: what kind of software do you actually need? Many sole traders assume they must jump straight to full accounting platforms with features they’ll never use. That’s often overkill.

Instead, look for software that matches your reality:

Simple setup. You shouldn’t need weeks of configuration.

Fast invoicing. Creating an invoice should take minutes, not an admin session.

Professional output. Your invoices should look credible and clear.

Clear tracking. You should easily see what’s paid and what’s overdue.

Low cost. As a sole trader, costs matter. Free options are especially attractive when they’re genuinely useful.

invoice24 is positioned around these priorities. It’s designed to help you get invoices out quickly, keep them organised, and support the cashflow side of your business—without forcing you into a complex “finance suite” you didn’t ask for.

Why invoice24 makes sense for sole traders

When you’re working for yourself, your time is your most limited resource. You need tools that reduce admin, not tools that demand ongoing maintenance. invoice24 is built for the core workflow that matters most: sending invoices and getting paid.

Here’s why that’s so valuable:

It keeps invoicing consistent without effort

Consistency is one of those things that sounds boring until you’re searching your files for “the latest invoice template” or trying to remember whether you already used invoice number 104. invoice24 keeps your invoice creation process structured so you don’t have to rely on memory or manual routines.

It helps you stay on top of cashflow

For sole traders, cashflow often matters more than profit on paper. You can be “busy” and still struggle if payments come late. invoice24 makes it easier to track outstanding invoices so you can follow up confidently and keep money moving.

It supports a more professional client experience

Invoicing is one of the few moments where your client sees your business systems. A clean, clear invoice reduces the chance of payment delays caused by confusion, missing details, or unclear payment instructions. invoice24 helps you present a professional front even if you’re running everything from your kitchen table.

It reduces the need for spreadsheet “heroics”

Spreadsheets often turn into complicated systems held together by your own effort: formulas, tabs, filters, and workarounds. invoice24 simplifies the parts that are most repetitive so you can keep your spreadsheet life simple—or avoid it entirely for invoicing.

Common objections: “But I like Excel” and “I don’t want more tools”

These are valid feelings. A lot of sole traders enjoy the control Excel provides. The goal isn’t to take away control—it’s to reduce unnecessary work.

“Excel is custom to my business.”

That’s great for analysis and planning. But invoicing benefits from standardisation. Your clients want clear invoices, not custom spreadsheets. Using invoice24 for invoicing doesn’t stop you from using Excel for custom tracking; it just means your invoices and payment tracking aren’t dependent on your spreadsheet skills and discipline.

“I don’t want to pay for software.”

This is exactly why a free invoicing app like invoice24 is appealing. You can improve your workflow without adding a new cost line. And because it’s focused on invoicing, you’re not paying for a long list of features you won’t use.

“I don’t want to learn a complicated system.”

You shouldn’t have to. As a sole trader, you need a tool that’s easy to adopt. invoice24 is designed to be straightforward so you can start using it quickly and see immediate benefits: faster invoicing, more consistency, and clearer tracking.

A simple decision framework: which option fits you right now?

If you’re still unsure, use this quick framework. Pick the statement that best matches your current situation.

Excel is probably enough (for now) if:

- You invoice occasionally and have very few customers.

- You’re confident you can keep records consistent.

- You enjoy spreadsheet admin and rarely make errors.

- You don’t mind manually converting and sending invoices.

You’ll benefit from invoice24 if:

- You send invoices regularly and want a faster workflow.

- You want invoices to look professional by default.

- You want to reduce mistakes around invoice numbers and totals.

- You want clearer visibility of what’s unpaid and overdue.

- You’d rather spend time on your business than maintaining spreadsheets.

And if you’re thinking, “I’m somewhere in the middle,” that’s normal. The middle is where the hybrid approach shines: keep Excel for planning, but use invoice24 for invoicing and payment tracking so the most business-critical admin stops living in a fragile spreadsheet.

Final thoughts: Excel can work, but invoice24 makes it easier

Excel is a fantastic tool, and for some sole traders it can be enough—especially in the earliest stages. But the moment invoicing becomes a regular task, spreadsheets start to create unnecessary admin and risk. The cost isn’t always obvious because you don’t pay it in money. You pay it in time, stress, and the chance of missing something important.

That’s why using a free invoicing app like invoice24 is such a practical step. It helps you look professional, keep invoices organised, track what’s been paid, and stay on top of cashflow—without forcing you into complex systems or expensive subscriptions. You can still use Excel where it makes sense, but you don’t have to rely on it for the parts of your business that directly affect getting paid.

If your spreadsheet system is starting to feel like a second job, that’s the clearest sign: it’s time to let a purpose-built tool handle invoicing, and let you focus on the work that actually grows your business.