What is Single-Entry Bookkeeping? Features and Examples

When it comes to accounting, many small businesses and sole proprietors prefer using Single-Entry Bookkeeping due to its simplified approach to record-keeping. Although it may be straightforward, it is still a crucial tool for tracking financial transactions and maintaining basic financial records. In this article, we will explore the meaning, features, and examples of the Single-Entry System to help you understand its importance in the business world.

What is Single-Entry bookkeeping?

Single-entry bookkeeping is a simple form of bookkeeping that is not based on a double-entry system. It records only one side of each transaction – either a debit or a credit – not both. This method is akin to maintaining a check register or a list of deposits and withdrawals for a bank account.

Features of Single-Entry System:

  1. It is simpler and less time-consuming than double-entry bookkeeping.
  2. It usually involves maintaining a daily summary of cash receipts and a monthly summary of cash receipts and disbursements, which shows the balance of cash at the end of the month.
  3. Single entry is often used by small businesses and for personal finances.
  4. It does not track assets, liabilities, or equity in detail.It does not conform to accounting standards and is not ideal for companies that need to provide financial statements to external parties.

Example of single-entry bookkeeping?

The key features of a single-entry system are that it records only the cash inflows (revenue) and cash outflows (expenses) of a business, without maintaining detailed accounts for assets, liabilities, and equity. Let’s break down the example provided:

  • Balance Forward: This represents the initial cash position of the business at the beginning of the accounting period. It shows the balances for revenue, expenses, inventory, and payroll.
  • Transactions:
  1. Utilities (6/15): On June 15th, the business incurred a utility expense of $400.
  2. Merchandise (6/18): On June 18th, the business made a revenue of $12,300 from merchandise sales.
  3. Wages (6/20): On June 20th, the business paid wages amounting to $4,500.
  4. Bank Deposit (6/21): On June 21st, a bank deposit of $13,100 was made, increasing the cash balance.
  5. Supplies (6/22): On June 22nd, the business incurred an expense of $1,200 for supplies.
  6. Ending Balance: This represents the final cash position of the business at the end of the accounting period. It shows the balances for revenue, expenses, inventory, and payroll after all recorded transactions.

Transactions are recorded in a cash book, which tracks the net cash position of the business.

An example of a cash book used in a single-entry system is as follows:

Nbr Date Description Revenue Expense Inventory Payroll
Balance forward $41,000 $23,000 $5,700 $8,500
1000 6/15 Utilities $400      
1001 6/18 Merchandise $12,30      
1002 6/20 Wages   $4,500    
6/21 Bank deposit $13,10      
1003 6/22 Supplies   $1,200    
Ending Balance $54,100 $24,600 $18,000 $13,000

The cash book example illustrates how a single-entry system tracks cash inflows (revenue) and outflows (expenses, inventory, payroll) in small business bookkeeping. This method simplifies financial tracking by focusing on basic transactions without detailed balance sheets or income statements, making it ideal for small businesses with straightforward financial operations.

Single-entry bookkeeping software

There are several single-entry bookkeeping software options available for small businesses and sole proprietors. Some popular choices include Wave Accounting, ZipBooks, and Zoho Books, Brightbook, Akaunting, Patriot Software. These software solutions typically offer features such as expense tracking, income recording, invoicing, and basic financial reporting. They provide a user-friendly interface and can streamline the process of managing financial transactions without the complexity of a double-entry system. Users can choose the software that best fits their needs based on factors like pricing, features, and compatibility with other business tools.

Who Uses Single Entry System?

Small businesses often opt for a single-entry system due to its convenience, especially if they:

  • Sole Proprietors: Small business owners prefer single-entry bookkeeping for its simplicity.
  • Freelancers: Independent workers find single-entry bookkeeping easy to manage for tracking projects.
  • Microenterprises: Tiny businesses with few transactions use single-entry bookkeeping due to its simplicity.
  • Startups: New companies choose single-entry bookkeeping to save costs until they grow.
  • Nonprofits: Some small nonprofits use single-entry bookkeeping for basic financial tracking.
  • Personal Finances: Individuals use single-entry bookkeeping to manage personal income and expenses.

What are the types of transactions that can be recorded in a single-entry system?

In a single-entry system, various types of transactions can be recorded to track the financial activities of a business. Here are some common types of transactions that are typically recorded:

  • Sales Transactions: Revenue generated from selling goods or services is recorded as income in the single-entry system. This includes cash sales, credit sales, and sales returns.
  • Purchase Transactions: Expenses incurred from purchasing goods or services for the business are recorded in the single-entry system. This includes payments made to suppliers, purchases on credit, and returns to suppliers.
  • Expenses: Any expenditure related to operating the business is recorded as an expense. This includes rent, utilities, salaries, advertising, repairs, and other overhead costs.
  • Income: Any money the business receives from sources other than sales is recorded as income. This may include interest earned on investments, rental income, or royalties.
  • Payments: Any payments made by the business, such as loan repayments, utility bills, taxes, and salaries, are recorded as expenses in the single-entry system.
  • Receipts: Any money received by the business, such as payments from customers, loans, or investments, is recorded as income in the single-entry system.
  • Depreciation: The decrease in the value of assets over time is recorded as an expense in the single-entry system. This helps to account for the wear and tear of assets used in the business.
  • Inventory Changes: Changes in the inventory levels, such as purchases of inventory, sales of inventory, and adjustments for lost, stolen, or damaged inventory, are recorded in the single-entry system.

These are just a few examples of the types of transactions that can be recorded in a single-entry system. It’s essential for businesses to accurately record all financial transactions to maintain proper accounting records and assess their economic performance.

Advantages and Disadvantages Single-Entry bookkeeping


  • Simplicity and Ease of Use: The single-entry system is simple to understand and easy to implement, as it does not require following a fixed set of accounting rules or using complex software.
  • Cost-Effectiveness: The single-entry system is less expensive compared to the double-entry system, as it does not require hiring skilled accounting personnel or maintaining many books.
  • Profit Calculation: It is easier to calculate the profit or loss of the business under the single-entry system, as the focus is on tracking cash inflows and outflows.
  • Suitable for Small Businesses: The single-entry system is well-suited for small businesses with limited financial transactions, as it provides the basic financial information needed to run the business.


  • Incomplete Financial Information: The single-entry system does not maintain detailed accounts for assets, liabilities, and equity, providing an incomplete picture of the business’s financial health.
  • Lack of Internal Controls: The single-entry system lacks the robust internal controls present in the double-entry system, making it more prone to errors and irregularities.
  • Inability to Generate Comprehensive Financial Statements: The single-entry system cannot generate a full set of financial statements, such as a balance sheet or cash flow statement, which are essential for informed decision-making.
  • Difficulty in Tracing Assets and Liabilities: Tracking the business’s assets and liabilities is more challenging in the single-entry system, as it does not maintain detailed accounts for these elements.
  • Unsuitability for Businesses with Credit Transactions: Companies that frequently purchase or sell goods or services on credit will find the single-entry system inadequate, as it cannot match revenues with their respective expenses.

How is Ascendum Business Service assisting with bookkeeping services?

Ascendum Business Services provides outsourcing bookkeeping services for businesses, tailored to meet their specific needs. Their expertise in managing financial records, transactions, and reporting can help streamline bookkeeping processes, enhance financial transparency, and provide cost-effective solutions. By outsourcing your bookkeeping needs to Ascendum, you can focus on your core operations and rest assured that your financial records are being handled accurately and efficiently.


In summary, single-entry bookkeeping offers simplicity for small businesses but lacks the depth needed for comprehensive financial analysis. While suitable for basic record-keeping, it may not meet the needs of larger or more complex enterprises. Ultimately, the choice between single-entry and double-entry systems depends on the specific requirements and goals of the business. Accuracy in financial record-keeping remains paramount regardless of the chosen method.


Q: What is single-entry bookkeeping?

A: Single-entry bookkeeping is a simplified method of tracking financial transactions, recording either a debit or credit for each transaction.

Q: What are the three types of single-entry systems?

A: Single-entry systems include Cash Book System, Simple Single-Entry System, and One-Column Cash Book System, each tailored to different business needs.

Q: Is single-entry bookkeeping suitable for larger businesses?

A: Single-entry bookkeeping is typically more suitable for small businesses with fewer transactions. Larger businesses may find it inadequate for comprehensive financial tracking.

Q: What types of transactions can be recorded in a single-entry system?

A: Transactions such as sales, purchases, expenses, income, payments, receipts, depreciation, and inventory changes can be recorded in a single-entry system.

Q: Can single-entry bookkeeping systems generate financial reports?

A: While single-entry systems may provide basic financial reports, they may not offer the comprehensive reporting capabilities of double-entry systems.


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