Choosing the right accounting software as a Melbourne sole trader matters more than most people realise when they're starting out. The wrong choice means manual BAS calculations, poor bank integration, and hours of admin every quarter. The right choice means your invoices, expenses, and tax obligations are managed in one place, with most of the routine work handled automatically.
This guide compares the main options available to Melbourne sole traders in 2025-26, with honest assessments of cost, features, and which industries each platform suits best.
What Accounting Software Needs to Do for a Sole Trader
Before comparing platforms, it's worth being clear on what sole trader bookkeeping actually requires. As a Melbourne sole trader, your software needs to:
- Import transactions from your bank account automatically (bank feeds)
- Let you issue tax invoices that comply with ATO requirements
- Track deductible business expenses with correct GST treatment
- Prepare and (ideally) lodge your BAS directly with the ATO
- Produce a profit and loss report you can give to your accountant at tax time
- Handle sole trader superannuation if you're making voluntary contributions
If you employ staff, even a single part-time employee, you also need Single Touch Payroll (STP) reporting capability, which narrows the free and budget options considerably.
Platform Comparison: Features That Matter for Sole Traders
| Platform | ATO BAS Lodgement | Bank Feeds | Invoicing | STP Payroll | Mobile App |
|---|---|---|---|---|---|
| Xero Sole Trader | Yes (direct) | Yes (major banks) | Yes (unlimited) | Yes (add-on) | Yes (strong) |
| MYOB Business Lite | Yes (direct) | Yes (major banks) | Yes (unlimited) | Yes (included) | Yes |
| QuickBooks Simple Start | Via export | Yes | Yes | Yes (add-on) | Yes |
| Wave | No | Limited | Yes | No | Limited |
| Rounded | Yes (direct) | Yes | Yes | No | Yes |
Pricing in 2025-26
| Platform | Entry Plan | Monthly Cost (AUD incl. GST) | What's Included |
|---|---|---|---|
| Xero Sole Trader | Sole Trader plan | $35 | 5 invoices/month limit on Starter; Sole Trader plan unlimited |
| MYOB Business Lite | Business Lite | $15-$25 | Unlimited invoices, BAS, payroll for 1 employee |
| QuickBooks Simple Start | Simple Start | $15-$25 | Unlimited invoices, expense tracking, reports |
| Wave | Free | $0 | Invoicing, basic reports; payroll and payments charged separately |
| Rounded | Sole Trader | $15 | Invoices, BAS, mileage tracking, built for freelancers |
Prices as at August 2026. All prices inclusive of GST. Promotional pricing may apply for new subscribers.
Which Platform Suits Each Melbourne Sole Trader Type?
The best software depends heavily on your industry and how you work. Here is what we see working well across our Melbourne client base:
Consultants and professional services (CBD, South Yarra, Richmond): Xero is the clear choice. Its project tracking, time billing, and strong invoicing workflows match how consultants work. The bank reconciliation takes 10-15 minutes per week once set up. If you're dealing with corporate clients who require specific invoice formats or purchase order references, Xero handles this better than any competitor.
Trades (builders, electricians, plumbers across metro Melbourne): MYOB Business Lite or Xero both work well. Tradies value the mobile receipt capture features, which allow you to photograph receipts on site and have them categorised automatically. Xero integrates with job management software like ServiceM8 and Tradify, which is a significant advantage if you use those platforms.
Allied health sole traders (physiotherapists, psychologists, OTs): Rounded is worth considering for very simple practices. For health providers billing through Medicare, NDIS, or private health funds, the transaction complexity usually warrants Xero with a bookkeeper configuring the correct GST-free and GST-applicable treatment for different service types. Getting this wrong affects your BAS.
Creatives and freelancers (designers, photographers, copywriters): Rounded or Xero Sole Trader. Rounded was built specifically for Australian freelancers and includes mileage tracking, project profitability reports, and a very clean mobile interface. For freelancers not registered for GST (under the $75,000 threshold), Rounded's simplicity is an advantage.
eCommerce sole traders: Xero with a Shopify or WooCommerce integration. The multi-channel sales complexity and inventory tracking needs push most eCommerce sole traders toward Xero's ecosystem.
Platform Recommendation by Industry: Melbourne Sole Traders
| Industry | Recommended Platform | Key Reason |
|---|---|---|
| Consultants and professional services | Xero Standard | Project tracking, corporate invoice formats, strong bank reconciliation |
| Trades (builders, electricians, plumbers) | Xero Standard + ServiceM8/Tradify | Job management integration; mobile receipt capture; BAS lodgement |
| Allied health (physio, OT, psychologist) | Xero Standard | Medicare/NDIS transaction complexity; correct GST-free coding for BAS |
| Creatives and freelancers | Rounded or Xero Starter | Rounded for simplicity and mileage tracking; Xero if GST-registered |
| eCommerce sole traders | Xero Standard + Shopify/WooCommerce | Inventory tracking; multi-channel sales reconciliation |
| Legal sole practitioners | Xero Standard | Trust account awareness; time billing; professional invoicing |
| Pre-GST service businesses | Wave (free) or Rounded | Low cost before $75k threshold; adequate income/expense tracking |
The BAS Question: Why ATO Integration Matters
If you are registered for GST, your accounting software's BAS capability is not optional, it is the core reason to pay for a subscription rather than using spreadsheets or a free tool. Xero and MYOB both connect directly to the ATO's Business Portal, meaning you can prepare and lodge your BAS from inside the software without exporting, logging in separately, or manually entering figures into the ATO portal.
This saves approximately 30-90 minutes per BAS lodgement depending on transaction volume, and it significantly reduces the risk of keying errors. For a sole trader lodging quarterly, that's 2-6 hours per year, plus reduced risk of mistakes that attract ATO attention.
QuickBooks requires you to export a BAS report and lodge manually through the ATO portal. Wave has no ATO integration at all. Both are workable for very low-volume sole traders, but the friction adds up quickly as your business grows.
Should You Use Software Alone or With a Bookkeeper?
Accounting software and a bookkeeper serve different functions. The software records transactions. The bookkeeper reviews the categorisation, catches errors, ensures GST treatment is correct, prepares BAS for lodgement, and reconciles the accounts end-to-end. For many Melbourne sole traders, a bookkeeper spending one to two hours per month reviewing your Xero file is the most cost-effective model: you handle day-to-day data entry using bank feeds and receipt capture, and the bookkeeper does quality control and lodgement.
This model typically costs $150-$300 per month at Melbourne bookkeeping rates, and the peace of mind around BAS accuracy, combined with the time saved, makes it worthwhile for most sole traders earning above $100,000 per year.
Set Up Xero the Right Way for Your Melbourne Business
True Tally are Xero Certified Advisors. We set up Xero for Melbourne sole traders correctly from day one, including chart of accounts, bank feeds, BAS settings, and invoice templates, then provide monthly bookkeeping or just quarterly BAS lodgement depending on what you need.
Book a Free Xero Setup CallFrequently Asked Questions
What accounting software is best for sole traders in Australia?
For most Australian sole traders, Xero ($35/month) or MYOB Business Lite ($15-$25/month) are the best options because they connect directly to the ATO for BAS lodgement and integrate with major bank feeds. Wave is free but lacks ATO integration.
Do sole traders in Melbourne need to register for GST?
Sole traders must register for GST if their annual GST turnover is $75,000 or more. Ride-sharing and food delivery drivers must register regardless of turnover. Once registered, quarterly BAS lodgement is required and accounting software with ATO integration is strongly recommended.
Can I do my own bookkeeping as a Melbourne sole trader?
Yes. Many Melbourne sole traders manage their own bookkeeping using Xero or MYOB, particularly early on. As complexity grows, most find it cost-effective to engage a bookkeeper for 1-2 hours per month rather than spending their own time on it.
What is the cheapest accounting software for sole traders?
Wave is free. Among paid options with ATO BAS integration, MYOB Business Lite ($15-$25/month) and Rounded ($15/month) are the most affordable. Xero ($35/month) costs more but has the strongest bank integration and accountant support network.
Do I need a bookkeeper if I use accounting software?
Software records transactions; a bookkeeper reviews, reconciles, and lodges. For sole traders earning above $100,000 per year with GST obligations, a bookkeeper spending 1-2 hours per month is typically more cost-effective than DIY given the opportunity cost of your time.
