How do I track cash and card payments as a sole trader?

Track cash and card payments as a sole trader without losing your mind

As a sole trader, you don’t need an accounting department to stay on top of your money—but you do need a reliable system. Cash sales, card payments, bank transfers, payment links, partial payments, refunds, tips… it adds up fast. If you track it all in your head (or across random notes, screenshots, and bank app searches), you’ll eventually miss something. That can lead to awkward customer conversations, messy bookkeeping, and stressful tax time.

The good news: tracking payments as a sole trader is mostly about building a simple routine and using tools that reduce manual work. The best system is the one you’ll actually keep using when you’re busy. That’s why many sole traders choose a lightweight invoicing tool that helps you record what’s been paid, what’s outstanding, and how each payment happened—without forcing you into complicated accounting software.

In this guide you’ll learn exactly how to track cash and card payments, how to stay organised across different payment methods, and how to avoid common mistakes. We’ll also show how invoice24 (our free invoice app) can be used as the central “source of truth” so you always know what’s paid, what isn’t, and why.

Why payment tracking matters (even if your business is small)

When you’re a sole trader, payment tracking isn’t just admin—it’s control. You need to know:

1) Cash flow: Are you actually making money this week, or are you waiting on invoices? A busy diary doesn’t automatically mean a healthy bank balance.

2) Who owes you what: Late payments happen. If you can’t quickly see what’s overdue, you’ll chase too late or not at all.

3) Proof of payment: Customers sometimes ask for confirmation, receipts, or copies of invoices. A clear record saves time.

4) Tax and reporting: Whether you file monthly, quarterly, or annually, the quality of your records determines how painful that process is.

5) Fewer mistakes: Mixing up cash and card payments is one of the easiest ways to misstate income—especially when you’re doing quick jobs, getting paid on the spot, or taking deposits.

Payment tracking isn’t about making things complicated. It’s about making your business easier to run.

Start with a simple rule: every sale should have a record

The biggest upgrade you can make is treating “a payment” and “a sale” as two linked things:

A sale is what you delivered (a job, a product, a service). It should be recorded as an invoice, receipt, or sales record.

A payment is the money you received (cash, card, transfer). It should be recorded against that sale.

When you do this consistently, you gain a clear picture:

• You can see all unpaid invoices at a glance.

• You can see which invoices were paid in cash vs. card.

• You can find payment history if a customer queries it.

• You can handle partial payments without confusion.

invoice24 is designed for exactly this: you create an invoice (or a quick record for a job), then mark it as paid with the payment method and date. That single workflow keeps your records clean without requiring you to be an accountant.

Set up your payment methods (cash vs card) the right way

Cash and card aren’t just “different ways to get paid.” They behave differently and should be tracked differently.

Cash payments: the risks and how to control them

Cash can be convenient and instant. It’s also the easiest payment type to misplace, forget, or mix with personal money. The key risks are:

• Missing records: A cash payment that isn’t recorded is still taxable income, and it can also distort your real profit if you forget it later.

• Cash leakage: Even honest businesses lose cash through small mistakes—wrong change, unlogged sales, or money being spent before it’s recorded.

• Confusion at tax time: If you rely on bank statements as your “sales record,” cash won’t be there.

A good cash workflow for a sole trader looks like this:

1) Record the sale immediately. Create an invoice or receipt while you’re with the customer (or right after the job). invoice24 makes this quick, especially if you save common items or services.

2) Mark it paid as “Cash.” In invoice24 you can mark the invoice as paid and select the method as cash, adding the date received.

3) Keep business cash separate. Use a cash bag, cash box, or dedicated wallet that is only for business takings. Avoid mixing it with personal cash.

4) Bank cash regularly. If you deposit cash into your business bank account, the deposit becomes a helpful cross-check against your cash sales record.

5) Note refunds or discounts clearly. If you return cash or adjust the amount, update the invoice record so your totals stay accurate.

Card payments: what makes them easier—and what still trips people up

Card payments usually leave a better digital trail. They appear on your merchant statements or in your banking app, and the money often lands in your account automatically. But card payments still cause common problems:

• Fees: The payment processor fee reduces what hits your bank. If you confuse net deposits with gross sales, your revenue figures can be wrong.

• Delays: Card payments might settle 1–3 business days later. If you only track by the bank deposit date, it can look like sales happened on the wrong day.

• Chargebacks/refunds: If you refund a card payment, you need to record it against the original sale, not just treat it as a random negative transaction.

A clean card workflow looks like this:

1) Create the invoice. Even if you’re paid immediately, record the sale as an invoice. invoice24 lets you generate a professional invoice in minutes.

2) Mark it paid as “Card.” Add the payment date (the day the customer paid). If settlement happens later, that’s fine—your sales record should reflect the actual sale and payment date.

3) Reconcile fees separately. Your processor fees are a business expense. Keep them visible so you don’t confuse sales totals with what arrives in your bank account.

4) Track refunds properly. If you issue a refund, create a credit note or update the invoice record with the refunded amount and date so your reporting stays correct.

invoice24 helps you keep the sale record consistent even when settlement timing and fees make bank deposits look messy.

Choose a “single source of truth” for payments

Many sole traders accidentally create three different versions of reality:

• A spreadsheet with some invoices • Bank statements showing deposits and withdrawals • A payment app dashboard showing transactions and fees

When these don’t match, you waste time trying to figure out which one is right. Instead, choose one place where every sale is recorded and every payment is logged—then use other sources to check and reconcile.

For most sole traders, invoice24 can be that source of truth. The idea is simple:

invoice24 = your sales and payment register

Then:

Your bank statement = confirmation of deposits and expenses

Your card processor statements = detail of fees, settlements, and chargebacks

This approach keeps your day-to-day tracking fast and your month-end checking straightforward.

Create a tracking routine you can actually stick to

The best system is boring and repeatable. Here’s a routine that works for many sole traders:

Daily (5–10 minutes)

• Record new invoices in invoice24. If you did three jobs today, create three invoices today.

• Mark payments as they come in. Cash paid on completion? Mark it paid immediately. Card payment confirmed? Mark it paid with method “Card.”

• Note anything unusual. Partial payment, discount, refund, or a promise to pay next week—capture it in the invoice notes so future you understands what happened.

Weekly (15–30 minutes)

• Check outstanding invoices. invoice24 makes it easy to see what’s unpaid or overdue.

• Send friendly reminders. A quick follow-up often gets you paid faster than waiting and hoping.

• Count and secure cash. Total up your cash takings and compare them with cash-marked payments in invoice24. If you’re short, you’ll catch the issue while it’s still recent.

Monthly (30–60 minutes)

• Reconcile with your bank. Compare your invoice24 totals to incoming deposits and card settlements. Don’t aim for perfection by transaction—aim to understand differences (fees, timing, refunds).

• Export or review reports. Having a monthly snapshot of sales and payments is gold for planning and tax prep.

• File receipts and expenses. Payment tracking is only half the story—expenses matter too.

This routine prevents the classic sole trader problem: leaving everything until the end of the year and trying to reconstruct months of activity from memory.

How to track cash payments in practice

Cash tracking can be ultra-simple if you standardise how you handle it. Here’s a practical method.

Use a cash log mindset, even if you don’t use a physical log

You don’t necessarily need a paper cash book—but you do need the discipline of recording cash the moment it’s received. Think of invoice24 as your cash log:

Step 1: Create the invoice. Include clear details (service, date, quantity, rate). Step 2: When paid, mark it as paid and set method to “Cash.” Step 3: If you gave change or a discount, make sure the final paid amount matches reality.

This ensures your records reflect what actually happened.

Separate “cash in” from “cash spent”

A common mistake is spending from the cash you receive (fuel, supplies, lunch) without recording the expense properly. That makes it harder to reconcile. A better approach:

• Keep cash received as cash received. Bank it or keep it in business cash storage.

• Pay expenses from your business account whenever possible. It creates an easy trail.

If you do spend cash, keep the receipt and log the expense. The key is not to let cash vanish without a record.

Handle cash deposits cleanly

If you deposit cash into your bank:

• Make deposits regularly (weekly or fortnightly). • Try not to mix personal cash into the same deposit. • Keep deposits consistent so reconciliation is easy.

When you later compare invoice24 cash payments with your cash deposits, you’ll quickly see whether everything lines up.

How to track card payments in practice

Card payments feel more “automatic,” but they still need structure.

Record card payments by the payment date, not the settlement date

Example: you run a card payment on Monday, but the money hits your bank on Wednesday. If you track only by bank deposits, Monday’s sale looks like Wednesday’s income. That can throw off weekly cash flow planning.

Instead:

• Use invoice24 to record the sale on Monday. • Mark it paid by card on Monday. • Let your bank settlement happen whenever it happens.

This keeps your customer records and sales reporting accurate and consistent.

Account for fees without distorting sales

Card processor fees are real costs. The important thing is not to “hide” them by recording only the net amount you receive.

A good habit:

• Record the invoice total as the full amount charged to the customer. • Track the fee as an expense (separately), so you can see your true profitability.

invoice24 helps you keep the sales figure clean—then you can handle fees as costs rather than shaving them off sales amounts.

Track refunds and chargebacks like a professional

If a refund happens:

• Link it to the original invoice. • Record the refunded amount and date. • Keep notes explaining why (returned goods, dispute, service issue).

This matters because refunds can otherwise look like random negative payments, and you may forget what they relate to later. With invoice24, keeping the refund tied to the invoice makes your history understandable at a glance.

Partial payments, deposits, and instalments

Many sole traders take deposits upfront, then a balance on completion. Others allow instalments for bigger projects. The main rule is: don’t treat this as one confusing blob of money.

Instead, track it deliberately:

• Invoice total: the full agreed price. • Payments received: each deposit or instalment logged with date and method. • Balance due: what remains outstanding.

Even if you’re doing this with simple invoices, invoice24 helps by keeping payments attached to the invoice so you can see progress instantly.

A practical example:

• £200 deposit paid by card on January 7 • £300 balance paid in cash on January 14

In your records, this should appear as one invoice for £500 with two payment entries. That prevents disputes and makes it easy to answer questions like “Have they paid?” without digging through bank transactions.

What about tips, small extras, and “rounding up”?

Real life payments are messy. A customer might tip you, buy an add-on, or round up the amount. The key is to reflect the real transaction in your invoice record.

Options that work well:

• Add a line item: “Tip” or “Additional materials” with the correct amount.

• Adjust the invoice total: If the invoice was created before the tip, update it so the total matches what you received.

• Note it clearly: If your process requires a note, write what happened: “Customer paid £60 cash including £5 tip.”

The point is simple: the invoice record should match the money, so your reporting stays accurate.

Keep your paperwork minimal but complete

You don’t need mountains of documents. You need consistency:

• Every sale has an invoice or receipt record • Every invoice shows payment status (paid/unpaid/part-paid) • Payment method is recorded (cash/card/transfer) • Refunds are linked to original sales

invoice24 supports a clean, minimalist approach: you track invoices and their payment statuses in one place, which reduces the need for separate logs and makes your admin lighter.

Reconciling payments: how to confirm everything matches

Reconciling is a fancy word for “checking that your records match reality.” It’s one of the most powerful habits you can build as a sole trader, because it catches mistakes early.

Cash reconciliation

At least weekly:

• Count cash in your business cash box/wallet. • Compare to cash-marked payments in invoice24 for the same period. • If there’s a difference, investigate while it’s fresh (missing invoice, wrong amount, change mistake).

Card reconciliation

Monthly is usually enough:

• Review card processor payouts and fees. • Compare totals to card-marked payments in invoice24. • Expect differences due to fees, settlement timing, and refunds.

The goal isn’t to panic over small timing differences. The goal is to be confident that your sales records are complete and that the money is arriving as expected.

Common mistakes (and how to avoid them)

1) Relying on your bank statement as your sales system

Your bank statement is a list of bank movements, not a sales register. It won’t show cash sales, and it can mix card settlements, fees, transfers, and refunds in confusing ways. Use invoice24 for sales and invoice/payment tracking, then use the bank statement to confirm deposits.

2) Forgetting to log cash payments

Cash disappears because it’s easy to spend or misplace. Log cash payments immediately in invoice24 and keep cash separate from personal funds.

3) Marking invoices as “paid” without recording the method and date

Later, you’ll need to know how it was paid and when. Make it a habit: paid status + method + date every time.

4) Confusing gross sales with net deposits

If you only look at what lands in your bank account, you’ll miss fees and timing differences. Keep sales totals clean in invoice24 and treat fees as expenses.

5) Not tracking refunds properly

Refunds should be linked to the original invoice, not left as mysterious negative amounts. Your future self will thank you.

6) Letting partial payments become chaos

If you accept deposits and instalments, track them against the invoice so you always know the balance due.

How invoice24 helps you stay on top of payments

There are many ways to track payments, but most are either too manual (spreadsheets) or too heavy (full accounting suites). invoice24 is built for sole traders who want a straightforward system that keeps invoices and payments together.

Here’s how invoice24 supports payment tracking in a practical, day-to-day way:

• Fast invoice creation: Create professional invoices quickly, even when you’re on the move.

• Clear payment status: Instantly see what’s paid, unpaid, or overdue without digging through bank apps.

• Payment method tracking: Record whether each invoice was paid by cash or card (and keep the date), so your records are always specific.

• Better customer communication: When a customer asks “Have I paid?” or “Can you resend the invoice?”, you can respond in minutes because everything is organised.

• Cleaner bookkeeping: Even if you later work with an accountant or use separate bookkeeping software, having tidy invoice and payment records makes everything easier.

Most importantly, invoice24 helps you build the habit that matters: capturing each sale and linking the payment to it. Once that habit is in place, everything else becomes simpler.

Practical setup checklist for sole traders

If you want to implement a solid payment tracking system this week, use this checklist:

1) Decide your primary record system: Use invoice24 as your invoice and payment tracker.

2) Standardise payment methods: At minimum: Cash, Card, Bank Transfer. Keep naming consistent.

3) Create invoices for every sale: Even small jobs. Even repeat customers.

4) Mark payments immediately: Paid status + method + date. No exceptions.

5) Keep business cash separate: Dedicated cash storage and regular deposits.

6) Schedule reconciliation: Weekly cash check, monthly bank/card check.

7) Record refunds properly: Link them to invoices and note the reason.

8) Keep it simple: The goal is consistency, not complexity.

Example workflows you can copy

Workflow A: Paid on completion (cash or card)

1) Finish the job 2) Create invoice in invoice24 3) Take payment (cash or card) 4) Mark invoice paid in invoice24 with method and date 5) Done

Workflow B: Deposit now, balance later

1) Create invoice for full amount in invoice24 2) Take deposit by card and log it against the invoice 3) On completion, take remaining balance (cash or card) and log it 4) Invoice shows fully paid when complete

Workflow C: Bank transfer after invoice

1) Create and send invoice in invoice24 2) When bank transfer arrives, mark invoice paid with method “Bank Transfer” and the date received 3) If payment arrives late, invoice24 helps you spot it and follow up

What to do if you’ve already fallen behind

If your payments are currently scattered across notes and bank apps, don’t panic. A simple reset is possible:

Step 1: Start from today. Begin creating invoices in invoice24 for every new sale. This stops the problem growing.

Step 2: Backfill recent invoices. Go back one week at a time. Create invoices for the jobs you can easily confirm (messages, calendar, receipts).

Step 3: Match payments to invoices. Use your bank statement and card processor dashboard to confirm card and transfer payments. For cash, use your memory and any records you have, then improve your process going forward.

Step 4: Set your routine. Daily logging + weekly/monthly checks.

The goal isn’t perfection overnight. The goal is a system that makes the future easy—and invoice24 can be the anchor point that keeps everything together.

Final thoughts: keep it simple, keep it consistent

Tracking cash and card payments as a sole trader doesn’t need to be complicated. It needs to be consistent. Record every sale, log every payment with method and date, and reconcile regularly so errors don’t linger.

If you want the easiest path, use invoice24 as your central place to create invoices, mark them paid, and keep a clean record of how customers paid you. When your invoices and payment statuses live in one place, you spend less time searching, less time guessing, and more time getting paid.

The best time to start is today: set up invoice24, create your next invoice, and mark your next payment properly. Future you will be grateful.