Einkalóðar

Einkalóðar, also known as "single-entry" or "one-entry" systems, refer to a simplified accounting method used primarily by small businesses and individuals. Unlike double-entry accounting, which records each transaction twice—once as a debit and once as a credit—einkalóðar involves tracking financial transactions in a single column or ledger. This method is often used for basic income and expense tracking rather than providing a comprehensive financial overview.

The system is particularly common in Icelandic business practices, where it is sometimes referred to as *einkalóðarregningur*. It is favored for its simplicity, requiring only a single record of each transaction, typically in a cashbook or spreadsheet. While this approach reduces complexity, it lacks the detailed transactional insights provided by double-entry accounting, such as balance sheet accuracy or profit-and-loss clarity.

Einkalóðar is generally suitable for very small operations, such as freelancers, sole proprietors, or hobby-based businesses with minimal financial complexity. However, it is not compliant with most international accounting standards, including Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS), which mandate double-entry methods for financial transparency and auditability. Businesses relying on einkalóðar may face challenges when seeking loans, investors, or regulatory compliance, as lenders and authorities typically require more rigorous financial documentation.

Despite its limitations, einkalóðar remains a practical choice for those prioritizing ease of use over detailed financial analysis. Many users supplement it with additional tools, such as spreadsheets or accounting software, to bridge the gap between simplicity and compliance.