The toolkit uses something called the cash basis accounting method, which sole traders who earn less than £150,000 per year are eligible for. This means that you count income and expenses as they are paid, rather than when they are invoiced.
If you are a VAT registered sole trader, the VAT tools support you if you use the Cash Accounting Scheme, or have approval from HMRC to use the Flat Rate Scheme with a cash-based method. Find out more here.