Understanding singe-entry accounting: Basics, benefits & tips

‍What is single-entry bookkeeping?

Single-entry bookkeeping is an easy way to record a company's financial transactions. It is particularly suitable for sole proprietorships, start-ups and small SMEs that do not have complex business structures. All income and expenditure are documented chronologically, usually via the income surplus statement (EU).

The aim is to keep track of finances without using a complex accounting system.

Difference between single-entry and double-entry accounting

The most important difference lies in the Type of recording of transactions:

Single-entry bookkeeping:

-Each transaction is recorded once (as income or expenditure)

-Ideal for smaller businesses

-Saves time and money

Double-entry accounting:

-Every booking is twice recorded — by debit and by

-Provides an accurate picture of the financial situation

-Necessary for larger companies and complex structures

Single-entry bookkeeping is efficient as long as the company remains manageable.

Why Single-entry bookkeeping is important

Well-managed single-entry bookkeeping helps

to clearly structure finances

to avoid tax return errors,

to better monitor cash flow.

makes it easier to work with tax advisors or trustees, as all data is quickly available.

This is how single-entry bookkeeping works in practice

Collect and sort receipts: Keep all invoices, receipts, and bank statements.

Document income and expenses: Use Excel or digital tools to regularly record your finances.

Regular monitoring: Check every month whether all bookings have been entered correctly.

Observe tax obligations: Meet deadlines for tax returns and value added tax.

Tips for successful single-entry bookkeeping

Use accounting software to automate processes

Separate personal and business finances to keep track

Schedule fixed accounting periods per week

Create a budget plan to keep track of income and expenditure

Conclusion

Single-entry bookkeeping is a time-saving and efficient way to manage small business finances. With clear organization, discipline and digital tools, you always have an overview of your business figures — perfect for SMEs, start-ups and sole proprietorships.