Single entry bookkeeping is usually only used for small businesses, charities, clubs or societies. It can either be completed using a simple spreadsheet or a book. It will show the receipts on one side and the payments on the other. It will also include a date and a short description may be used.
Single entry Bookkeeping is both less expensive to maintain that double entry bookkeeping because you will not need to hire the services of a trained professional and it is the simplest way of keeping your accounts in check.
Commonly, only the bare essentials are recorded in single-entry bookkeeping such as accounts payable, accounts receivable and taxes.
For most businesses whether self-employed or a registered company single-entry bookkeeping will not be enough to complete the year end accounts.
It is also possible to extend the information recorded to include an analysis of the income and expenses.
Single entry bookkeeping only show the transactions being posted once either as a payment or receipt and will not include balance sheet items such as bank account, debtors and creditors. Most businesses need to also include a balance sheet showing debtors, creditors, assets and liabilities, for this double-entry bookkeeping will be required.
The main advantage is that most people can understand how to complete the system, but will need to employ someone to complete the double entry accounts.
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