Single-entry or double-entry bookkeeping
Not everyone can opt for single-entry or simplified bookkeeping. It’s only allowed for sole proprietorships, partnerships (SNC), and ordinary limited partnerships with an annual turnover of less than €500,000.
Note: Some sectors are not allowed to use single-entry bookkeeping, such as insurances, lending transactions, investments, and stock market transactions.
Components of single-entry bookkeeping
Single-entry bookkeeping consists of the following components:
- Purchase ledger: contains entries of all incoming invoices and credit notes from suppliers.
- Sales ledger: contains entries of all outgoing invoices and credit notes from customers.
- Financial journal: consists of a cash and a bank ledger. The cash ledger records all cash income and expenditure. The bank ledger records all income and expenditure made to or from bank accounts.
- Inventory ledger: includes a description and valuation of stocks.
Each year, you have to prepare internal financial statements though you are not obliged to make them public.
If your annual turnover exceeds €500,000 or if you have a public limited company (SA), a private limited company (SRL), or a cooperative company (SC), you are obliged to use a double-entry bookkeeping system.
The difference between single and double-entry bookkeeping
Just as with single-entry bookkeeping, you record all incoming and outgoing transactions. The difference is that, in double-entry bookkeeping, every transaction receives a counter-entry. This means that there is a corresponding receipt or payment. That's why we call it double-entry bookkeeping.
Components of double-entry bookkeeping
Double-entry bookkeeping consists of the following components:
- A journal: records all transactions.
- The chart of accounts: a structured chart of all accounts. You are obliged to follow an established chart of accounts.
- You must draw up an annual inventory, taking into account the format of the chart of accounts.
Every year, you must prepare online financial statements. You must file these annually with the national bank. A copy thereof is published in the Belgian Official Gazette.