How Much Should a Solopreneur Spend on Software? (Start With What You Already Pay)

How much should a solopreneur spend on software? Ask the internet and you'll be handed a percentage of revenue. It sounds like a rule. It's an average, taken across companies that don't look like yours, and it can't tell you whether the $49 tool you pay for every month is earning its keep.

Most solo owners don't overspend on software. They've just never added it up. The charges arrive one at a time, $12 here, $29 there, an annual renewal that surprises you in March, and no single page shows the total. The number that matters isn't a benchmark. It's your own, and you can have it in an afternoon.

This post walks through that afternoon: get every charge in one place, sort each tool into keep, merge, or cut, and price what each one buys you. It also says when to stop, because a stack that costs a little more than it needs to isn't worth a whole afternoon. If your real question is which accounting tool to pick, that's a separate post. This one is about the whole stack.

Why There's No Good Benchmark

The figures that circulate come from somewhere, and it helps to know where. A 2026 roundup of small-business technology spending, citing Gartner, puts average IT spending at 3.4% of annual revenue for companies with fewer than 250 employees, and says professional-services firms "routinely spend 5-7% of revenue on technology." Those are real figures with a named source. They're also not yours.

They describe companies with staff: the smallest group in that report's table is one to nine employees. They count a whole IT budget, hardware and security included, not one person's subscriptions. And they're averages, so a firm running a server room and a firm running a laptop and a cloud drive land in the same number.

So skip the percentage as a target. Measure three things you can actually see:

• Your annual total. Everything you pay for, converted to a year.
• Your share of revenue. The total divided by what you earned. It's a readout, not a goal.
• Cost per use. What a tool costs each time you really use it.

The first two tell you where you stand. The third tells you what to cut.

Step 1: Get Every Charge in One Place

Start with twelve months, not one. A single month of statements shows the $29 tools and misses the annual ones: the domain, the design library, the plan you pay for once a year and forget. Go back twelve months on every account you've ever paid for a tool with. For most people that's the business account, a card or two, and often a personal card. If some of your tools sit on the personal card, our guide to separating business and personal expenses covers sorting them out.

For each recurring charge, write down four things: the tool, what it does for you, what you pay, and how often. Convert everything to a monthly figure so the list adds up. An $180 annual plan is $15 a month. Two kinds of charge catch people out: the free trial that quietly converted, and the tool a client set up on your card for a project that ended.

Doing this by hand is an hour of scrolling, and it's the step where most people quit. It's also the step you only want to do once. From here on, this is where a tool like Moninsight earns its keep: connect the bank and card accounts those charges land on, and each new charge arrives with the name your bank reports, sorted into a category such as Software. Next year's list builds itself, and all you decide is what stays.

Step 2: Sort Each Tool Into Keep, Merge, or Cut

Go down the list one tool at a time and ask five questions. Each answer points somewhere.

The last question is the guard rail. The quickest way to hurt a solo business is to cut the scheduling link that books your calls, or the tool that gets you paid, to save $15 a month.

Merge is the category that surprises people, because overlap is where most of the waste hides. A second cloud-storage plan left over from a client project. A stock-photo subscription when your design tool already includes a library. A separate invoicing tool when your books can send invoices too. Merging doesn't mean buying an all-in-one suite. It means noticing two tools doing one job and keeping the one you'd miss.

Step 3: Price What Each Tool Buys You

What a tool costs isn't the question. What it costs per use is. A $16 video-call plan you use twenty times a month costs 80 cents a call. A $29 proposal tool you used three times costs $9.67 a proposal, which is cheap if each proposal is worth a few thousand dollars and expensive if you haven't sent one since spring.

The other half of the sum is your time. If an hour of yours is worth $100, a $49 tool that saves you two hours a month is cheap, and the same tool saves you nothing if you open it once a quarter. Put a number on your hour, be honest about it, and ask what each tool returns against what it costs.

Some tools don't have a use count. A password manager or a backup doesn't get "used" in any way you'd tally. For those, ask what losing it would cost. If the answer is a lost day, $5 a month is the cheapest insurance on the list.

Real-World Example: Dana's 15-Tool Stack

Dana runs a one-person marketing agency that brings in about $180,000 a year from two retainer clients and some project work. Over four years she'd added tools whenever a problem showed up: a CRM when she was chasing leads, a social scheduler when she decided to post more, a second storage plan when a client insisted on sharing files their way. She'd never added them up.

Her bank and card accounts had been connected to Moninsight for over a year, so the charges had been arriving with the vendor names attached. She sorted by vendor, picked out what repeated, and had her list in under an hour. (The bookkeeping app she got the list from isn't one of the 15.) It came to $357 a month, which is $4,284 a year, or 2.38% of her revenue.

Three were easy. The second storage plan held nothing she'd opened in a year. The social scheduler hadn't been touched in two months. The stock-photo plan duplicated the library built into her design tool. That's $64 a month.

The time tracker looked like a cut until she remembered why she had it: twice a year she checks how long retainer work really takes before she renews a client. It stayed.

Invoicing was the one merge. She was paying $35 a month for a tool that only sent invoices, while her customers, bank transactions, and books lived somewhere else. Moninsight creates invoices for customers and records each one's client, status, and the date it was paid, so she moved her retainer invoices there and cancelled the separate tool.

That's $99 a month, or $1,188 a year, gone from a stack that was already below the percentages she'd seen quoted. Her new total is $258 a month, $3,096 a year, 1.72% of revenue. Next September she won't need an afternoon. Her P&L lists expenses by category, each with an amount and its share of total expenses, and software sits on its own Software & Subscriptions line, so "did the stack creep?" has a one-line answer.

None of it is dramatic. That's the point. A low percentage didn't mean nothing to cut, and cutting took an afternoon, not a rebuild.

When Your Stack Is Already Fine

If your list comes to a few hundred dollars a year and you use everything on it, you've finished at Step 1. Write the total down, set a reminder for next September, and go back to work. Cutting a $5 tool to save $60 a year isn't worth the hour it takes, and a habit of cancelling a tool and re-buying it three months later costs more than it saves.

Don't cut your way into a new problem either. A cheaper tool that costs you an hour a month in workarounds isn't cheaper. And no percentage proves you're overspending: a business that sells through automated tools could sit at 8% of revenue and be exactly right, while Dana's stack at 2.38% still held $99 a month of slack. What matters is whether each tool is earning its place.

The Tax Side, Briefly

Software you use to run your business is deductible, and the IRS says so directly. The instructions for Schedule C say: "You can deduct technology and software tools that are ordinary and necessary expenses directly related to operating your business. Generally, this will include tax preparation software and subscription services paid to manage your business." Publication 334 defines the test: an ordinary expense is one "common and accepted in your field of business," and a necessary one is "helpful and appropriate for your business." If a tool does both business and personal duty, the same guide says to "separate the personal part from the business part." One caution from the Schedule C instructions: most computer software expenses must be capitalized and depreciated or expensed under section 179, so a one-time software purchase can follow different rules than a subscription.

Deductible isn't the same as free. A deduction lowers the profit your taxes are figured on. It doesn't hand the money back. The IRS sets self-employment tax at 15.3%, and Topic 554 says it's figured on 92.35% of your net earnings, found by subtracting ordinary and necessary business expenses from your business income. So each $100 you spend on a deductible tool trims about $14 off that tax alone (15.3% of 92.35% of $100), plus whatever your income-tax bracket saves. The law sets a yearly maximum on earnings subject to the Social Security part, so the figure is lower above it. Either way, a $100 tool costs you well under $100 and well over nothing. Keep a tool because it earns its place, not because it's deductible.

How Moninsight Helps

Moninsight is an AI bookkeeping and tax assistant built for one-person businesses. It keeps a proper ledger and chart of accounts in the background so you never have to operate one. For finding out what your stack costs:

• Connects your bank and card accounts, so each charge arrives with the name your bank reports.
• Sorts transactions into tax-relevant categories, such as Software, and a correction you make once sticks.
• Shows expenses by category on your P&L, each with an amount and its share of total expenses, with software on its own Software & Subscriptions line.
• Creates invoices for customers, recording each one's client, status, and the date it was paid.

Conclusion

There isn't a right percentage. There's the total of what you pay, what each tool returns, and what you'd rather stop paying for. The afternoon in this post gets you all three: pull twelve months of charges, sort each tool into keep, merge, or cut, and price what's left.

If you'd like to see what your stack costs without opening a dozen statements, connect the accounts those charges land on and let each one arrive sorted into a category, with software on its own line of your P&L.

Try Moninsight free. Plans start at $20/month billed annually ($25/month billed monthly). No credit card required. Cancel anytime.

Frequently Asked Questions

How much should a solopreneur spend on software per month?

There's no single right number. The percentages you'll find published describe companies with employees and whole IT budgets, not one person's subscriptions, so they make a poor target. Add up what you actually pay, convert it to a monthly figure, and judge each tool by what it returns. In the example above, a 15-tool stack at $357 a month was 2.38% of revenue and still held $99 a month of slack, so the percentage alone told Dana nothing.

How do I find every software subscription I pay for?

Start with twelve months of statements from every bank account and card you've used to pay for tools, business or personal, because annual renewals only show up once a year. List each recurring charge with what it does and what it costs, then convert annual charges to a monthly figure. Free trials that converted and tools a client set up on your card are the usual places a charge hides.

Are software subscriptions tax deductible for a freelancer?

Generally yes, when they're ordinary and necessary for your business. The IRS instructions for Schedule C say you can deduct technology and software tools that are ordinary and necessary expenses directly related to operating your business, and that this generally includes subscription services paid to manage your business. If a tool serves both business and personal use, deduct only the business part. A one-time software purchase can follow different rules, which the instructions point to Publication 946 for.

Is an all-in-one tool better than several separate ones?

It depends on overlap, not on the label. Fewer tools means fewer logins and less retyping, but an all-in-one you use a third of is still money spent on the other two thirds. Run the same three steps on either kind of stack. If you're weighing bookkeeping tools in particular, our comparison page sets Moninsight against QuickBooks, Xero, and Wave.

Can Moninsight show me what I spend on software?

Moninsight connects to your bank and card accounts, so each charge arrives with the name your bank reports, and it sorts transactions into categories such as Software. Your P&L lists expenses by category, with each category's amount and its share of total expenses, and software appears on its own Software & Subscriptions line. Connect every account you pay for tools with and each charge shows up. Plans start at $20/month billed annually ($25/month billed monthly).

This article is for general educational purposes and is not tax advice. Tax situations differ from person to person. Consult a qualified tax professional or the IRS about your specific circumstances.