Single-entry bookkeeping

What is single-entry bookkeeping?

As a self-employed person, your accounting is a crucial tool for continuously getting and keeping a clear picture of the situation of your activity and/or company. It is also a legal obligation to keep correct accounts, so that you can provide sufficient information about all income and expenditure of your self-employed activity or company. Supporting documents substantiate the movements – in and out and internal shifts – think of invoices, bank statements, depreciation tables, … The movements are recorded on accounting accounts or general ledger accounts. Accounting can be done according to two systems: single-entry or cash accounting, and double-entry bookkeeping.

Single-entry bookkeeping

Single-entry or cash accounting uses only one movement per transaction. So there is no way to detect an incorrectly written amount (which is possible with double-entry bookkeeping, e.g. if the VAT was wrongly recorded as € 20,-, € 1,- is ‘missing’ on the debit side).

Cash accounting works with a limited number of journals:

• a financial journal with a cash book section (all cash transactions) and a bank book (all expenditure and receipts on the bank account)
• a purchase journal with the suppliers' invoices and credit notes
• a sales journal with the invoices and credit notes to customers
• an inventory book, which keeps track of the goods in stock, certainly in quantities, with a valuation at regular intervals.

Only sole proprietorships, general partnerships (VOF) and limited partnerships (Comm.V) with an annual turnover below € 500.000,- may keep single-entry accounts. If annual turnover rises above that threshold, you are obliged to switch to double-entry bookkeeping.