Skip to content
× FreshBooks App Logo
Official App
Free - Google Play
Get it
You're currently on our US site. Select your regional site here:
7 Min. Read

What Is Single-Entry Bookkeeping? | Pros and Cons for Small Business

Single-entry bookkeeping is an accounting system used to keep track of a business’s finances. There is one entry per transaction and most entries record either incoming or outgoing funds. Transactions are recorded in a “cash book”—a journal with columns that organize transactions details like date, description and whether it’s an expense or income.

NOTE: FreshBooks Support team members are not certified income tax or accounting professionals and cannot provide advice in these areas, outside of supporting questions about FreshBooks. If you need income tax advice please contact an accountant in your area.

What Is the Definition of Single-Entry Bookkeeping?

Single-entry bookkeeping is a system of accounting where there is only one entry for each transaction.

The following transactions are recorded in single-entry bookkeeping:

  • Taxable income
  • Tax-deductible expenses
  • Cash

Each transaction is in one column and is either positive or negative. It’s possible to split revenue and expenses into separate columns but because each transaction is still recorded on a single line, this also qualifies as single-entry bookkeeping.

Single-entry bookkeeping can be performed in accounting software but, in its simplest form, it can be recorded in a table. The journal you use to record transactions is called a cash book.

At minimum, a cash book records:

  • Transaction date
  • Transaction description
  • Transaction value: this can be placed in either an income (credit) or expense (debit) column
  • Balance: a running tally of cash on hand

A column can also be added for notes. The last row of the table should show the ending balance for the accounting period (at month end or year end, for example).

What Is the Single Entry Bookkeeping System (with Examples)?

The previous section covered the features of a single-entry bookkeeping system. By looking at a couple of examples, you should have a better understanding of the basics of a single-entry system.

The below example shows a simplified cash book. Please note that each transaction has one line. This is unlike a double-entry system, which has two lines for each transaction.

Each transaction records the date it occurred, a short description, whether the money is coming in or out (income or expense) and the running bank balance, which changes with each new transaction.

You could also add a reference column if you’d like to record invoice numbers and a reconciliation column at the far right to tick off if you’ve reconciled (matched) the entry to what’s on your bank statement.

Basic Cash Book

DateDescriptionIncomeExpensesBank Balance
October 1


October 5


October 16Invoice Paid-Creative Personnel Inc.200 675
October 22Website Domain Renewal 10665
October 30Invoice Paid-Widgets Inc.250 915
Ending Balance 45035915

After you’ve made sure your entries match what’s on your bank statement, you’ll want to make a separate document to account for transactions outside the scope of the cash book. In the chart below, there’s an unpresented check for $300 (this is a check that hasn’t yet cleared) and $50 cash that hasn’t been deposited yet.

Bank Reconciliation

Cash Book Balance916
Unpresented Check300
Less: Deposit Not Showing50
Bank Statement Balance1166

It’s also possible to expand the above simple cash book into a more detailed record. The below example breaks down different types of expenses, which makes it easier to track spending by category.

Detailed Cash Book

DetailsMoney InMoney Out 
DateDescriptionSalesTotal InMarketingWebsiteTotal OutBank Balance
Balance      500
October 5Headshots  25  475
October 16Invoice Paid-Creative Personnel Inc.200    675
October 22Website Domain Renewal   10 665
October 30Invoice Paid-Widgets Inc.250    915
Ending Balance 450450251035915

Please note you can use a table like the examples above. Simple software is another another option and will save you the hassle of setting up a spreadsheet.

What Is the Difference Between Single Entry and Double Entry?

Number of Entries

Single-entry bookkeeping has one entry per transaction while double-entry bookkeeping has two entries per transaction—a debit and a credit. The debit is recorded in one account while the credit is recorded in another. On the other hand, single-entry bookkeeping only uses one account per transaction.

What Is Recorded

Single-entry bookkeeping uses cash-basis accounting, a system that gets its name because it focuses on recording cash coming in (revenue) and cash going out (expenses). Cash, by the way, can mean physical cash, checks, credit card payments or electronic fund transfers like debit or wire transfers.

Double-entry bookkeeping usually uses accrual accounting which has five accounts: assets, liabilities, equities, revenue and expenses. Single-entry only uses the last two accounts.

How Transactions Are Recorded

Small businesses using the single-entry system record revenue when it comes in and record an expense when its paid. Companies using a double-entry system record revenue when it’s earned, not received. And they record an expense when it’s due, not paid.

What Are the Advantages and Disadvantages of a Single Entry System?


An advantage of the single-entry bookkeeping system is that it’s simple and straightforward. This suits business owners who aren’t interested in or have much experience with accounting or can’t afford to hire an accountant to do their books.

Plus, the single-entry system doesn’t require complicated accounting software—a simple spreadsheet or program will do.

The IRS reports that many individuals and small businesses use single-entry bookkeeping. Just keep in mind that the IRS prohibits companies with annual gross sales of over $5 million from using this method.

Service-based businesses may also prefer the single-entry system because, without the complication of inventory, a more robust accounting system isn’t required.

Another advantage is that if your business is new, small and has limited activity, this system gives you everything you need. The chief report produced by single-entry bookkeeping is a business’s income statement, also called a profit and loss report (or a “P&L”).

A P&L displays how profitable a company is within a certain period of time. It’s a key document to understand the financial health of your company and see where you can or need to cut costs. Single-entry bookkeeping is focused around producing this report, which may give a small business owner all the tools they need to monitor their business finances.


The disadvantage of single-entry bookkeeping is that it doesn’t include accounts like accounts receivable, accounts payable and inventory. That means you can’t generate a balance sheet or income statement, which are mandatory for public companies. Thankfully, small businesses are usually privately held.

Another problem with single-entry system is that it’s harder to track liabilities and assets. This would be an issue for a larger company that has numerous assets like vehicles, buildings or lots of office furniture. As for liabilities, it’s harder to monitor their effect with single-entry bookkeeping.

For example, if a business owner takes out a loan, this is recorded as income in the single-entry system. In a double-entry system, this transaction would also be recorded as a liability (a debit) so you’d have a better picture of your cumulative bank debt.

All in all, the single-entry system makes it harder to get the full picture of your company’s financial standing.

Companies that deliver goods and services and receive payment on different dates may also find that the single-entry system doesn’t suit their needs. The double-entry system is better at matching expenses related to producing a good or service and its resulting payment. If the two are in different accounting periods, a single-entry system won’t be able match the two up.

However, if you’re in a creative service-based business with few expenses related to producing your work (such as copywriting), this won’t be an issue.

The final problem with single-entry bookkeeping is that it’s harder to spot fraud or errors in your accounting. In the double-entry system, debits and credits always have to match in reports—if they’re out of balance you know immediately that one or more of your entries is incorrect. The single-entry system doesn’t have this failsafe, so errors can be carried forward and compounded without anyone noticing.