How to choose the right accountant — and the right financial companion — as a sole trader

The best accountant is not necessarily the one with the flashiest office. And the best finance app is definitely not the one with the longest feature list. As a sole trader, what matters is whether the people and tools around you make running your business simpler.

You need an accountant who understands your work, gives advice you can actually use and helps you make good decisions. You also need a system that keeps the everyday stuff organised between conversations with your accountant: income, expenses, receipts, invoices and the records you will eventually need at tax time.

Those are two different jobs. The smartest setup for many sole traders is not accountant versus software — it is the right accountant plus the right financial companion.

Why the right accountant matters for a sole trader

Sole trader finances can look simple from the outside. You earn money, pay expenses and declare the result in your individual tax return. In practice, the questions can get complicated quickly:

• Is an expense fully business-related or partly personal?
• Should you be registered for GST? How should you treat equipment purchases?
• What records do you need to keep?
• Are you setting enough aside for tax?
• Does your situation involve personal services income, a home-based business, a vehicle, subcontractors or another obligation you have not considered?

That is where professional judgement matters. If someone is providing tax agent services for a fee — including preparing or lodging returns or providing tax advice — the Tax Practitioners Board says you should make sure they are appropriately registered. Software can help organise information; it cannot replace professional judgement about your specific circumstances.

7 things to look for when choosing an accountant

1. They regularly work with sole traders

An accountant can be excellent and still be the wrong fit for you. Ask how much of their client base is made up of sole traders, freelancers, contractors or small service businesses. Industry familiarity can help too — a photographer, tradie, consultant, support worker and personal trainer may all operate as sole traders, but their common expenses and working arrangements can be very different.

2. They explain things in plain English

A good accountant should make you feel more informed, not more confused. They should be able to explain the practical consequences: what you need to do, what records you need to keep and what decision you need to make. If every conversation leaves you with more questions than answers, that is a problem.

3. Their service matches what you actually need

Not every sole trader needs the same level of support. Some people simply want an annual tax return and a check that their records are in order. Others want quarterly check-ins, GST and BAS support, cash-flow guidance or help planning ahead. Ask what is included before you compare prices — a cheaper annual fee may not be cheaper if every question becomes an extra charge. Useful questions include:

• What is included in the annual fee?
• Can I contact you during the year, and do you charge separately for questions?
• Do you provide BAS services if I become GST-registered?
• Do you offer proactive tax planning, or mainly year-end compliance?
• What information do you want me to provide at EOFY?

4. They are properly registered for the services they provide

If you are paying someone to provide tax agent or BAS agent services, check the Tax Practitioners Board Register. Remember that “accountant” and “registered tax agent” are not automatically the same thing — check the service you are buying and the registration that applies.

5. They are comfortable with the way you work

Ask what they prefer receiving at tax time: a spreadsheet, CSV export, PDF summary, receipt folder or access to a system. Can they work with clean digital records without requiring you to move your whole business onto a full accounting platform? The easier the handover is for both sides, the less time gets wasted.

6. They are proactive, not just reactive

The value of a good accountant should not only appear after 30 June. They should help you understand what to watch before a problem becomes urgent — GST thresholds, record-keeping obligations, or planning for tax rather than discovering the number at the end.

7. You trust them enough to ask the “basic” questions

A strong accountant-client relationship works when you can say “I have no idea what this means” without feeling judged. Technical knowledge matters, but so do communication, responsiveness and trust.

Your accountant should not have to be your bookkeeping system

Many sole traders spend the year with receipts in their camera roll, invoices in email, income in bank transactions and expenses in a spreadsheet they stopped updating in September — then expect the accountant to reconstruct the entire year. An accountant can help clean that up, but using professional time to sort basic records is rarely the best use of the relationship.

The ATO expects businesses to keep records that explain transactions relating to their tax affairs, and the general retention period for most business records is five years. The goal should be simple: give your accountant organised information so they can spend more time applying expertise and less time chasing paperwork. That is the role of a financial companion.

What should a good financial companion do?

A financial companion is not necessarily full accounting software. For many sole traders, the best tool is the one that helps answer four questions quickly:

• How much have I been paid?
• What am I still owed?
• What have I spent on the business?
• How organised am I for tax time?

Keep income and expenses in one place

You should be able to record your ABN income and business expenses without needing an accounting qualification. The easier it is to update, the more likely you are to actually use it.

Store receipts with the expense

A receipt sitting somewhere in your camera roll is technically stored — it is not necessarily organised. A better system links the document to the expense it relates to, so you are not matching twelve months of files at EOFY.

Handle mixed work and personal expenses sensibly

Sole traders often use the same phone, internet plan, vehicle or subscriptions for both work and personal life. Your tool should let you record the work-use portion without pretending it can make the final tax determination for you — that is exactly the sort of issue your accountant can confirm.

Make accountant handover easy

1. Can you export a clean summary?
2. Can you provide income and expense data in a usable format?
3. Can receipts be packaged logically?
4. Can your accountant review your records without getting your entire digital life?

Be simple enough to become a habit

The most powerful finance tool is the one you actually open. If it takes 20 minutes to categorise one receipt, you will stop doing it. For a sole trader, lower cognitive load is a feature.

Know when you have outgrown it

Simple is only useful while your business is simple enough. If you add employees, payroll, inventory or complex GST requirements, full accounting software may become the better choice. A good companion tool should help with the job it is designed for, not pretend it can replace every finance system forever.

Accountant + companion tool: the better combination

Your accountant should help answer:

• What does this mean for my tax position?
• What can I claim based on my circumstances?
• What obligations apply to me, and what needs to be lodged when?
• What should I plan for next?

Your companion tool should help answer:

• What came in, and what went out?
• What am I still owed?
• Where is the receipt?
• What do I need to tidy up before EOFY?

When each does the job it is best at, the whole process gets easier.

Questions to ask before choosing your setup

Before engaging an accountant:

• Do you work with sole traders like me?
• Are you a registered tax agent or BAS agent where required?
• What is included in your fee?
• How should I keep and send you my records?
• How often should we check in?

Before choosing a companion tool:

• Is it built for a sole trader or for an accounting team?
• Can I track income, expenses, receipts and invoices easily?
• Can I export my information in a form my accountant can use?
• Does it make clear where software stops and professional advice starts?
• Will I realistically use it every week?

Where Indi fits

Indi is designed for the space between spreadsheet chaos and full accounting software — a financial companion for Australian sole traders who want to keep their ABN money organised without becoming bookkeepers. It brings together income, business expenses, receipts, invoices and EOFY readiness, then helps turn those records into a cleaner handover for an accountant.

It does not try to replace your accountant — that is the point. The aim is to walk into tax time with your side of the job already sorted, so your accountant can focus on the work you actually need an accountant for. Still weighing up whether you need one at all? Read our guide on doing your own tax versus using an accountant, or see how Indi compares with Hnry, Solo by MYOB and QuickBooks.

Frequently asked questions

Do sole traders need an accountant?

There is no universal requirement for every sole trader to use an accountant. However, professional advice can be valuable when you need help with tax, GST, deductions, business structure, planning or compliance. If you pay someone to provide tax agent services, check that they are registered for the services they provide.

How do I check whether a tax agent is registered in Australia?

Use the public Tax Practitioners Board Register — you can search for the practitioner and check their registration status and details.

Can accounting software replace an accountant?

Software can organise records, automate calculations and make financial information easier to manage. It cannot replace professional judgement about your specific tax circumstances. The right mix depends on the complexity of your business.

What should I give my accountant at EOFY?

Organised income records, expense records, supporting receipts or invoices and details of outstanding transactions are a strong starting point. Ask your accountant exactly what format they prefer.

What is the difference between accounting software and a financial companion?

Full accounting software is generally designed for broader accounting workflows — bank reconciliation, payroll, inventory, BAS and detailed reporting. A financial companion is deliberately lighter, helping a sole trader stay organised and prepare a clean handover without requiring a full accounting system.