This master's thesis addresses the differences between the accounting practices of sole proprietors (craftsmen) and companies in the Republic of Croatia. Sole proprietors and companies represent distinct forms of business entities with unique characteristics and requirements for financial record-keeping. Craftsmen's accounting, tailored to individual entrepreneurs, typically relies on simplified accounting methods and rules. Craftsmen record their revenues, expenses, and debts in a less formal manner compared to companies. Conversely, companies employ more complex accounting systems and are often subject to different tax regulations. These divergent approaches to accounting and taxation significantly impact financial statements and tax obligations. This thesis analyzes and compares these differences to provide a better understanding of accounting practices and challenges faced by craftsmen and companies in Croatia. Understanding these distinctions can assist decision-makers and accounting professionals in effectively managing business operations and complying with legal requirements. Accounting for entrepreneurs requires greater involvement from accountants, increased documentation volume, and differs from accounting systems used by nonprofit organizations, budget beneficiaries, traders, and self-employed individuals. Within the corporate accounting framework, several characteristics and differences exist compared to primary activities. Consequently, the accounting of service companies differs from that of manufacturing and trading enterprises. Craftsmen maintain their business records according to the principles of cash bookkeeping, which means that commercial transactions are recorded in income and expense ledgers at the moment they occur, i.e., when there is an inflow or outflow of cash. Craftsmen are obligated to keep income and expense ledgers, transaction ledgers, records of receivables and payables, as well as an inventory of long-term assets. Craftsmen's accounting is regulated by the Crafts Act and is subject to the income tax system. On the other hand, companies adhere to the Accounting Act and are subject to the profit tax system. In contrast to craftsmen, companies are required to compile annual reports at the end of the fiscal year, and these reports are described in detail in the master's thesis. This research involves the analysis of business records and accounting literature using real-life examples from craftsmen and companies with the aim of exploring their key differences.