What is a Sole Trader
So, you want to be your own boss?
Running your own show is exciting — full of freedom, creativity, and decisions that are all yours to make. If you're thinking of starting a business or freelancing gig, becoming a sole trader is one of the simplest ways to begin. No shareholders, no board meetings — just you, your skills, and your vision.
What is a Sole Trader?
A sole trader is someone who runs a business on their own. You're the owner, the decision-maker, and the one responsible for the day-to-day. You and your business are legally the same entity, which means you keep all the profits — but you also carry all the responsibility. This structure is ideal if you want low-cost setup, total control, and the flexibility to try things out as you grow. Whether you're offering services, freelancing, consulting, or testing a product idea, being a sole trader keeps things simple.
Why it works for so many:
Easy to start, easy to manage
You don’t need to register a company or deal with complicated admin right away.You keep what you earn
Any profit goes straight to you (after taxes, of course). There’s no double-taxing like in companies.Quick decisions
You don’t need approval from anyone else — perfect for agile businesses that need to move fast.
Things to keep in mind:
Being a sole trader means you're also personally liable for any business debt. That includes your own savings or property, if things go wrong. Plus, you’re wearing all the hats — marketing, invoicing, customer service, accounts... it’s a lot.
That’s why setting up smart systems early on makes a big difference. If you’re just getting started as a sole trader or freelancer, Hnry takes the stress out of managing tax and GST by doing it automatically every time you get paid. No need to calculate anything — it files your returns and pays the right amounts to Inland Revenue on your behalf. It’s ideal if you want hands-off admin and predictable cash flow from day one.
When Xero Might Be Better: If your business is growing — maybe you’re hiring, offering multiple services, or managing stock — Xero gives you more control and insight. You can track income and expenses in detail, reconcile bank accounts, run financial reports, and set up invoicing your way. It’s perfect when you’re scaling up and want deeper visibility across your business finances, especially if you work with a bookkeeper or accountant.
It’s like having a mini finance team in your pocket — and it frees you up to grow your business with confidence.
Assessing these factors can help you determine whether it's time to hire a bookkeeper to ensure your financial health and support your business growth.
By dedicating some time to familiarise yourself with these tools, you can maintain accurate financial records, ensuring a clear picture of your financial health without the need for professional bookkeeping services.
At Ako Cash Flow, we’re not just bookkeepers—we’re your financial empowerment partners. Our mission is to give you the confidence and skills to manage your own books with ease. With our tailored tools and expert guidance, you’ll learn how to track income and expenses, master cash flow, and make smart financial decisions that support your goals. We believe that financial independence is key to long-term success. That’s why our approach focuses on education and support, enabling you to take control of your personal or business finances and build a stronger financial future. Let's empower your journey together!
