New Zealand guidance - reviewed 25 September 2026
This is general information for small businesses and accounting firms. It is checked against Inland Revenue and Australian Taxation Office guidance, but it is not personalised tax advice.
For an accounting firm, choosing software for a sole trader is not always about finding the platform with the longest feature list. It is about finding a system the client can use consistently, while still giving the firm clear information when it is needed.
Xero is a capable product and remains a sensible choice for many clients. Other accounting software can also be a good fit, depending on the business. A client that needs payroll, multi-currency, projects, connected apps, or broader reporting may be better served by software with that broader capability.
But many sole traders and other straightforward businesses have simpler day-to-day requirements. They need a reliable way to organise transactions, keep records up to date, understand their position, and give their accountant usable information at year end.
What accounting software does a sole trader need?
The answer depends on the business, not on the label “sole trader”. A sole trader with employees, many invoices, complex stock, overseas transactions, or a growing operation may need more capability than a simple service business.
However, many straightforward sole traders mainly need to:
- import and reconcile bank transactions;
- code income and expenses accurately;
- keep GST records where they are GST-registered;
- produce straightforward reports; and
- share clear records with their accountant.
They also need support when they get stuck. Software is only useful if the client can keep it current between visits to their accountant.
CashManager Cloud is designed for this practical bookkeeping role. For supported New Zealand banks, EziFeed can automatically import transactions for reconciliation. It also supports transaction coding, GST preparation, reporting, accountant access, and optional available modules when a client needs more functionality. See CashManager Cloud features for the current product scope.
What does a New Zealand sole trader need to keep for tax?
A sole trader is self-employed. Inland Revenue says self-employed people use their individual IRD number and pay tax on net profit by filing an individual income return. Read Inland Revenue’s self-employed guidance.
Good records remain essential. Inland Revenue says businesses should keep records of cash and non-cash sales and expenses, including electronic records, for at least seven tax years. These records help a business complete tax returns and finalise tax. Read Inland Revenue’s record-keeping guidance.
If a sole trader carries on a taxable activity, GST registration is required when turnover was at least NZ$60,000 in the previous 12 months or is expected to reach that amount in the next 12 months. Registration is also required when the business adds GST to the price of its goods or services. Once registered, the business must charge GST, file GST returns, pay GST where due, and keep GST records. Read Inland Revenue’s GST registration guidance.
This is why a simple, consistently used bookkeeping system can be valuable. It helps the sole trader maintain the records that their tax and GST obligations depend on, rather than trying to reconstruct a year of transactions near the end of the tax year.
Do sole traders need full financial statements in New Zealand?
A useful distinction is often missed here. Inland Revenue’s self-employed guidance focuses on net profit, an individual income return, and complete business records. That does not mean every sole trader has the same need to prepare or submit a traditional full set of annual financial statements to Inland Revenue.
An accounting firm may still prepare financial statements, working papers, forecasts, or other year-end material for a client. That can be appropriate for the client’s own decision-making, a bank or lender, an adviser, or another specific requirement. This year-end work is a separate firm workflow. CashManager Cloud is client-bookkeeping software, not accounting practice-management or annual-accounts software.
Clear reconciled records and straightforward reports can make it easier for the accountant to carry out that separate work in the firm’s own systems. Learn more about client-led and firm-led bookkeeping workflows.
Does a sole trader need Xero?
Not necessarily. The right question is not “Is Xero good?” It is “Does this client need what Xero provides?”
Xero can be a good fit for businesses with broader operational or reporting requirements. Other software may also be the right choice for particular clients. A firm does not need to replace the software it already uses across its whole client base to introduce CashManager Cloud selectively for suitable straightforward clients.
For a sole trader who mainly needs reliable bank reconciliation, day-to-day coding, GST preparation where applicable, simple reporting, and accountant access, more complexity may not create more value. A system that the client understands and uses consistently can be more useful than a system with features they never need.
For a current, source-backed comparison of product scope, pricing, and support considerations, read the CashManager Cloud vs Xero buyer guide. Firms may also find the Xero New Zealand price-change article useful when reviewing client fit ahead of the October 2026 changes.
Choose software to suit each client
An accounting firm - and the small businesses it supports - can choose software that suits the client rather than assuming every client needs the same platform.
That can mean retaining Xero or other software where it suits the client, while considering CashManager Cloud for simpler sole-trader or small-business bookkeeping. The decision can be based on what the client actually needs, how they work, and how the firm supports them.
For New Zealand firms subscribing on behalf of clients, CashManager Cloud has preferential partner options resulting in a cost of NZ$15 including GST per month per client. This is a New Zealand accounting-firm arrangement. It is distinct from CashManager Cloud’s direct small-business subscription pricing, and it should not be presented as an Australian offer.
A firm does not need to migrate dozens or hundreds of clients to test this approach. It can identify a small group of suitable clients, such as five straightforward sole traders, and assess whether the combination of simple bookkeeping, clear records, and the firm’s existing year-end workflow is a better fit.
What about Australian sole traders?
The same broad principle applies, but the Australian compliance details are different.
The Australian Taxation Office requires businesses to keep records of transactions relating to their tax, superannuation, and registration affairs. Those records need enough detail to explain the transaction and its GST treatment where relevant, and most records must generally be kept for five years. Read the ATO’s record-keeping rules for business.
The ATO’s own myDeductions tool illustrates the practical record-keeping focus for a sole trader: it can record business income and expenses, assist at tax time, and allow records to be shared with a registered tax agent. Read the ATO’s myDeductions guidance.
CashManager Cloud is available for Australian small businesses, but Australian automatic bank feeds are coming soon. Firms should confirm the current Australian product scope and appropriate client workflow before recommending a particular set-up.
Start with the clients who need less, not more
A client with complex needs should have software that matches those needs. But a straightforward sole trader should not automatically be expected to use more software than their bookkeeping requires.
Start with a small group of suitable clients
You do not need to change your whole practice. Identify five straightforward clients and consider whether CashManager Cloud is a better fit for their day-to-day bookkeeping.
To discuss New Zealand accounting-firm partner options or see how CashManager Cloud can fit alongside your firm’s existing systems, visit the CashManager page for accountants or book a demonstration.
Frequently asked questions
What accounting software does a sole trader need?
A sole trader needs software that matches the business's actual complexity. Many straightforward businesses need transaction imports, reconciliation, income and expense coding, GST records where applicable, basic reports, accountant access, and reliable support. More complex businesses may need broader capability.
Do sole traders need full financial statements in New Zealand?
Inland Revenue's self-employed guidance focuses on net profit, an individual income return, and complete business records. A sole trader may still need financial statements or other year-end outputs for their accountant, a lender, advice, or their specific circumstances. These needs should be assessed separately from day-to-day record-keeping duties.
Does a sole trader need to register for GST in New Zealand?
GST registration is required for a taxable activity if turnover was at least NZ$60,000 in the past 12 months or is expected to reach that amount in the next 12 months. Other registration conditions can apply, including adding GST to prices.
Does a sole trader need Xero?
Not necessarily. Xero may be a good choice for clients who need its broader capabilities. A simpler bookkeeping system may be a better fit for a sole trader whose needs are limited to day-to-day transaction records, GST preparation where applicable, basic reports, and accountant access.
Can a firm use CashManager Cloud for only some clients?
Yes. A firm can use different software for different client needs. CashManager Cloud can be considered for suitable straightforward clients while the firm continues to use Xero or other platforms where they are the better fit.