If you keep track of your personal finances the chances are you complete it using single entry bookkeeping.
Single entry bookkeeping is usually only used for personal, 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 includes the following information a date, a short description and amount.
Single entry Bookkeeping is less expensive to maintain than double entry bookkeeping because you will not need to hire the services of a bookkeeper or accountant. It is also the simplest way of keeping your accounts in check. You also do not have the expense of paying for accounting software or taking the time to learn how to use it.
Commonly, only the bare essentials are recorded in single-entry bookkeeping such as income and expenditure.
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 Example
To help get you started we have shown an example below. It shows the balance brought forward, also known as the opening balances. A list of all the income on the left and expenditure on the right. Both the income and expenditure will have a total. To find the profit of the period take the expenses away from the income. In the example below the profit is 660.00 minus 76.00, therefore, a profit of 584.00.
Single entry bookkeeping only shows the transactions posted once either as payment or receipt. It 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.
Single Entry Bookkeeping Getting Started
The easiest wat to start bookkeeping is to either set up a spreadsheet using Microsoft Excel or one of the alternatives. We have used both Libre office and a app in the Microsoft store called Neat Office. Set up headers for the columns required. You are then ready to enter the opening balance and the transactions.
If you prefer using pen and paper, either purchase a prepared book or use a lined sheet. Draw in the columns you need and you are ready to start.
To check if everything is entered correctly, the closing bank balance from the statement should equal the balance on your single entry bookkeeping page. If it does not equal a mistake may have been made in entering the figures or adding up. Check through it all again and correct anthing.
The main advantage is that people can understand how to complete the system, but will need to employ someone to complete
the double entry accounts.
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