“6 STEPS” FOR DETERMINING OF EFFICIENCY OF SMALL ENTREPRENEURS

Boris Banovic (), Vladimir Grebenar () and Goran Pichler ()
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Vladimir Grebenar: Periska Ltd.
Goran Pichler: Moje Sunce Ltd.

Economy of eastern Croatia yesterday, today, tommorow, 2015, vol. 4, 232-238

Abstract: Single-entry accounting is applied by small entrepreneurs with annual revenues under 2 millions HRK. No financial/business reports based on a single-entry accounting system can provide reliable information on business efficiency. The major purpose of a regulated appliance of single-entry accounting is providing information for taxation of small entrepreneurs. This paper illustrates a methodology for calculation of business efficiency of small entrepreneurs applying single-entry accounting. The methodological approach outlined in this paper is based on six steps. In order to precisely determine the relevant business result, a financial analyst needs to calculate accurate data in each of the outlined six steps. The methodology described in this paper is in line with techniques of double-entry accounting. This paper uses a business case of a small family farm to illustrate the difference between (regular) financial reports generated by small entrepreneurs applying single-entry accounting and reports based on the methodology of six steps.

Keywords: single-entry accounting; business efficiency; financial analysis; methodological approach “6 steps” (search for similar items in EconPapers)
Date: 2015
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