An accountant in your pocket: How Hnry & Monoova are saving sole traders from tax stress
Of Australia’s 2.58 million small business owners, 64.3 per cent [1] are sole traders. That’s a community of over 1.6 million people.
These professionals have flexibility and freedom, but find themselves falling through the cracks when it comes to finance and tax management. Their business isn’t structured as a company with employees, so they typically don’t require the services of a dedicated CFO, bookkeeper or business accountant (and often can’t justify the expense). They also aren’t PAYG employees who have tax, super and student debts automatically deducted from the money they earn.
To help manage the tax burden, most sole traders opt to get a traditional accountant. But they quickly find out that they’re still responsible for managing an ever-present load of administration, budgeting and financial compliance tasks, doing most of the work as part of that relationship. With no real training, sole traders have to figure out how much tax to put aside, how and when to make tax payments, and how to track and manage expenses - all while learning to use the brand of accounting software that their accountant has partnered with. As recent surveys have found, all of this administrative effort can sometimes take a full day out of the working week [2]. When there is so much else going on, it’s no wonder surveys of self-employed individuals show that 47% don’t have their tax return ready on time [3].
To add to the pressure, even with the best intentions, it is easy to make mistakes that lead to missed entitlements, tax bill shock and even financial penalties.
According to online accounting service Hnry, sole traders contribute $72 billion to Australia’s GDP. However, they collectively spend over 10 million hours every week on tax and financial admin, which represents around 18% of their time. This costs the country $28 billion in lost productivity every year. [4]
The Hnry platform was created to give sole traders more time to focus on their revenue-generating activities.
How Hnry works
This award-winning platform’s standout feature is its ability to calculate and pay tax as funds come in, creating more of a PAYG tax set-up for the self-employed. When a new user signs up, they have their income from clients or employers paid into a dedicated Hnry account. When a payment is made, the platform automatically calculates and deducts tax, super, Medicare levy and student debts, and sets aside GST (if applicable).
Tax is paid to the ATO as money comes in, which solves the common sole trader problem of figuring out how much tax they owe and when to pay it. Hnry’s accounting team lodge income tax returns and BAS statements at the end of the quarter and financial year, and the platform has a support team that is available to help answer tax-related questions.
Going beyond tax management, the Hnry platform can also be used to track expenses, generate invoices and provide real-time insights into business earnings and costs. It’s a simple solution that frees up time and headspace, with users enjoying the following:
Automatic tax and GST calculation and payment
ATO compliance without the need for tax knowledge
Tools for quoting, invoicing, expense tracking and reporting
Quarterly BAS and annual tax returns handled by experts
A single service for managing all financial admin and compliance
Untangling tax and financial management for sole traders
Hnry co-founders Claire and James came up with the idea after managing their own sole trader challenges. Having to deal with tax and financial admin inspired them to build a solution that quickly struck a chord with other self-employed professionals.
Since its launch in New Zealand in 2017, the platform has expanded to Australia and the United Kingdom, and now has a team of over 100 that serves tens of thousands of creative freelancers, tradies, consultants and healthcare workers. Traditional accountants and bookkeepers can be expensive, and other software can have complex pricing structures or lock in annual fees. Hnry charges just 1% (+GST) of its clients’ income, capped at $1,500 +GST per year. The additional benefit is that users only pay fees when they’re earning money, making it an excellent option for sole traders who have fluctuating workloads.
Faster transfers, powered by Monoova
The other key benefit of using Hnry is near-instant payments. When an invoice is paid by a client, the funds are deposited into a Hnry account. Tax calculations and deductions are made on the spot, and the remainder is transferred straight into the sole trader’s personal bank account within a matter of seconds.
Users receive notifications as soon as they are paid, and they aren’t left waiting days for funds to clear. This is a big incentive to use Hnry, and it is made possible with the help of the platform’s fast payments partner, Monoova.
Acting behind the scenes, Monoova powers unique virtual account numbers and PayIDs for each Hnry client, allowing them to be paid quickly and securely. Once funds arrive in a Hnry account, it is Monoova’s payment infrastructure that automatically reconciles and routes money to the right places.
Monoova powers a fully integrated, real-time flow of money, removing the friction usually associated with payment processing. This allows Hnry to offer its sole trader client base fast access to finances as well as peace of mind about tax management.
“Monoova is one of the, if not the most valuable partnership we have in the Australian market. Monoova’s services have been—and the auto match service in particular—instrumental for us being successful.”- Karan Anand, Chief Strategy Officer & Managing Director, Hnry Australia
With Monoova’s support, Hnry is able to:
Create profiles on demand for new users and make the onboarding experience seamless
Provide unique account numbers and PayIDs for customers so they can be paid by clients
Auto-reconcile payments so money flows easily
Pay inbound and outbound using New Payments Platform (NPP) and BPay
By combining Monoova’s advanced payment capabilities with their own platform, the Hnry team has created an end-to-end solution that redefines financial admin and tax management for sole traders. As Hnry’s customers explain, it’s like having an “accountant in my pocket”.
1 https://lawpath.com.au/blog/small-businesses-statistics
2 https://hnry.com.au/hnry-sole-trader-pulse-reveals-super-contribution-cuts-backs/
3 https://dynamicbusiness.com/topics/news/half-of-sole-traders-delay-tax-filing-as-october-31-deadline-nears.html
4 https://hnry.com.au/uploads/Hnry-Sole-Trader-Pulse/AU-Hnry-Sole-Trader-Pulse-March2024.pdf?_cchid=8126551f822b52b6dcb9851b727f5244
About Hnry
As Australia’s largest accounting service for sole traders, Hnry is an award-winning online platform for managing tax and financial admin. Set up to be automated but backed by a team of qualified accountants, the platform is designed to keep sole traders up to date on their taxes and take the stress out of this side of running a business. Visit the website: www.hnry.com.au to find out more.
About Monoova
Monoova is a leading provider of intelligent payment solutions, helping businesses optimise their payment processes, enhance customer experiences, and scale efficiently. Visit www.monoova.com or read Monoova’s PDS/FSGto find out more about our payment solutions and services.
