Single vs Double Entry Bookkeeping Apps - Which is Best for Me?

14/07/2024; 646 words; 3 minutes to read.

Are you using a single entry bookkeeping-based accounting app, such as Quicken, Checkbook, MyMoney or Microsoft Money, where you have a number of Bank and/or Credit Card accounts with a range of Income and Expense categories and you manage all of your transactions by adding, editing or deleting single entries against a Bank or Credit card account? Should you consider moving to a double entry bookkeeping-based accounting app, where you have a range of Asset, Liability, Income, Expense and Equity accounts and all of your transactions involve funds moving from one account to another and can be added, edited or deleted in any of your accounts?¹

According to current wisdom the single entry option is fine for individuals and very small enterprises but double entry is a must for larger organisations. Many of the single entry bookkeeping-based accounting apps, particularly in the United States, support the direct online import of transactions from financial institutions and match the imported transactions to categories automatically, based on previous entries. In the UK (and in much of the rest of the world as far as I know) however, the automated updating of transactions is not widely supported and the automatic allocation of manually entered transactions to categories can be awkward and invasive. Furthermore, the automated import of transactions, rather the manual entry thereof, can reduce the ability of account holders to detect fraudulent (or unintended, in the case of unwanted subscriptions) withdrawals. So, even for the straightforward needs of individuals and small enterprises, double entry may still be the better option.

To my mind your choice between the two options will depend mainly on whether or not you want to exploit the income and expense data captured by your app fully. If you simply want to keep track of what you have, what you are earning and what you are spending your money on, the simplicity of single entry wins the day, especially if you are based in the United States, choose to upload your transactions automatically and have found an app that maps your transactions to your income and expense categories consistently and accurately. If however, you want more flexibility in analysing the data that you have captured and more choice in how to enter your transactions, a double entry-based app, such as MyNetWorth, MyNetWorth for Windows or iNetWorth, could be your best option.

If you do decide that a double entry-based app would be your best for you, migrating your data to MyNetWorth, MyNetWorth for Windows or iNetWorth from your single entry bookkeeping-based accounting app can be done easily, using the export to QIF functionality, that is provided in many single entry bookkeeping-based accounting apps, and converting your accounts, payees, categories and transactions from .qif into .mnydata or .mnw format with QIFConvert, QIFConvert for Windows or iQIFConvert. Please see the Export Your Data to QIF sections of the appropriate User Guides for more details.

¹In fact all apps, single and double entry-based, use the double entry technique; the Categories of single entry bookkeeping-based apps are the direct equivalent of Income and Expense accounts in double entry-based apps and the Opening Balances of their Bank and Credit Card accounts are the direct equivalent of the Equity account (positive and negative). However, double entry bookkeeping-based apps allow the user to add, edit and delete transactions in Asset, Liability, Income, Expense and/or Equity accounts directly.