What is Bookkeeping?

Bookkeeping is an accounting process of tracking all documentation of any financial transactions that a business entity makes from launch to closure. Business owners or bookkeepers record business activities based on supporting documentation, depending on the accounting principles the company implements. Documents can be bills, receipts, invoices, purchase orders, or other financial reports that indicate a transaction.

You can record transactions by hand in a journal or a Microsoft Excel spreadsheet. But many companies opt to use bookkeeping software to organize their financial histories.

Bookkeepers can log a business’s financial transactions using single-entry or double-entry bookkeeping. In single-entry bookkeeping, you report profits and expenses for all expenditures in a cash register. The double-entry method begins with a journal, followed by a ledger, a trial balance, and financial statements.

In short, bookkeeping is just one facet of doing business and keeping good financial records. With well-managed bookkeeping, your business can closely monitor its financial capabilities and journey toward heightened profits, breakthrough growth, and deserved success.