Comparison

FreeAgent vs a spreadsheet: how should a sole trader keep the books?

By Buzz Accounting · Updated 2026-07-13 · Sole Traders guide

A spreadsheet is free and familiar. But with Making Tax Digital arriving and FreeAgent available free, the case for software has rarely been stronger.

The short answer

A spreadsheet works for the simplest sole trader, but FreeAgent saves time, cuts errors and — crucially — keeps the digital records Making Tax Digital requires. Since FreeAgent is free with a Mettle account or included in our packages, the usual 'it's cheaper' argument for spreadsheets no longer really holds.

Side by side

FreeAgent vs a spreadsheet

	Spreadsheet	FreeAgent
Cost	Free	Free with us / Mettle
Bank feed	Manual entry	Automatic
Invoicing & reminders	Manual	Built in
Tax estimate	DIY formulas	Live
MTD for Income Tax	Not compliant alone	Files it
Error risk	Higher	Lower

The spreadsheet's shrinking case

A spreadsheet costs nothing and does the job if you have a handful of transactions a month and enjoy the admin. But every figure is typed by hand, every formula is a chance to fumble a cell reference, and it can't file anything. For years the trade-off was 'free but manual' — and free won for a lot of sole traders.

What changed

Two things. First, Making Tax Digital for Income Tax requires digital records and quarterly updates for many sole traders from April 2026 — and a bare spreadsheet doesn't satisfy that or submit them. Second, FreeAgent is now free with a Mettle account and included in our packages, so the cost advantage of spreadsheets has largely evaporated.

With FreeAgent, your bank feed fills the books, receipts are snapped on your phone, invoices chase themselves, and your tax bill estimates live all year. It's less work and it's compliant.

Our verdict

All but the very simplest sole trader should use FreeAgent. It saves hours, cuts errors, keeps you MTD-ready, and — free with Mettle or included in our fees — no longer costs more than a spreadsheet. Keep the spreadsheet for quick sums; run the actual books in software.

Quick answers

About this comparison

Can I use a spreadsheet for my sole trader accounts?

You can if your affairs are very simple, but a bare spreadsheet isn't compatible with Making Tax Digital for Income Tax and can't submit quarterly updates. Accounting software like FreeAgent handles both.

Is FreeAgent better than Excel for sole traders?

For most, yes — it automates bank feeds, invoicing and tax estimates, reduces errors, and keeps MTD-compliant digital records. And it's free with a Mettle account or included in our packages.

Does Making Tax Digital require software?

MTD for Income Tax requires digital record-keeping and quarterly updates through compatible software. A standalone spreadsheet won't submit them, though bridging software or FreeAgent will.

Is FreeAgent free for sole traders?

It's free with a Mettle business account, and included in every one of our accounting packages — saving up to £330 a year versus subscribing directly.

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