What is Bookkeeping?

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What Is Bookkeeping?

Bookkeeping is simply keeping track of your business money—what comes in, what goes out, and where it all goes. Let’s say your online store buys some packing supplies—that purchase (with the date, cost, and payment details) gets recorded. Bookkeepers track all kinds of transactions like sales, expenses, loans, and even investment returns.

🚀 How to Start Bookkeeping for Your Startup

Here’s how to lay a solid foundation for your finances:

1. Choose a Method That Works for You

You can keep books by hand, in a spreadsheet, or (most popular) use software like QuickBooks Online. Manual methods are cheaper but slower. Digital tools save time—some even let you snap a photo of a receipt, and it logs the expense for you!

2. Set Up a Chart of Accounts

This is like your financial filing system. You’ll group your money activities into categories like income, expenses, or loans. It helps everything stay organized and makes taxes way easier.

3. Start Recording Your Transactions

There are two ways to do this:

• Single-entry: You write it down once. Good for very small businesses.

• Double-entry: You write it in two places (like one for cash in, one for what it cost). This gives a fuller picture of your business health.

❗ Common Mistakes to Avoid

• Falling behind: Delays make taxes harder and stress higher.

• Mixing personal & business: Keep those separate—it saves headaches later.

• Not double-checking: Small errors can snowball fast.

🧮 Bookkeeping vs. Accounting

They’re both about finances, but here’s the difference:

Bookkeeping	Accounting
Tracks daily transactions	Analyzes financial trends
Prepares reports like profit/loss	Helps with taxes and strategy
Requires less formal education	Usually requires a degree
You can DIY or hire a bookkeeper	Often hired for bigger-picture help

They often work together. Bookkeepers keep things clean; accountants make sense of the bigger picture.

📅 When Should You Hire a Bookkeeper?

If you're too busy to keep up with daily records or you want clean, reliable books—it might be time. A bookkeeper helps you stay organized, tax-ready, and focused on growth.

You can work with a freelancer, firm, or even someone just starting out (as long as they’re trained and detail-oriented!).

💬 FAQs

What records should I track?All your income and expenses—including receipts, invoices, bank statements, and bills.

Do I need a bookkeeper or accountant? Start with a bookkeeper for the everyday stuff. Bring in an accountant for taxes, loans, and big decisions.

Should I use cash or accrual accounting? Cash is simpler—track money when it moves. Accrual gives more detail and is better if you're growing fast or looking for funding.

How do I stay on top of taxes? Stay current with your books, file on time, and consider working with an accountant to keep things smooth.

Want help getting started with your books—or ready to hand them off to someone you trust? I’d love to chat.