Single-entry bookkeeping is where a financial transaction is logged in one account in your small business’s accounting systems. With double-entry bookkeeping, the same transaction is recorded twice, with two offsetting entries in two different accounts within your accounting system.
The single-entry system is easier and can be used by small businesses that do not require balance sheets financial reporting or tax purposes. The double-entry system has the major benefit of being far more accurate; businesses that produce a profit and loss account and maintain a balance sheet must use double-entry bookkeeping.
Essentially, if a business needs to track its assets and liabilities, a single-entry system is not sufficient. In that case, the business must use a double-entry system.