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What is Bookkeeping?

basics bookkeeping Oct 29, 2020

“So what is bookkeeping?”

Believe it or not that’s actually one of the most frequently asked questions we get. Small business owners seem to understand that it has to do with basic business finances, but what is bookkeeping really?!


Bookkeeping Basics


“Bookkeeping” is the act of recording financial transactions. Seems simple, right?


Well, wait a second, while we’re here… let’s break down the word “transactions” too, so we have the most basic building blocks of bookkeeping!


What is a Financial Transaction?


There are two general types of transactions you need to record for your bookkeeping, your expenses and your income. At the most basic level, you are recording the money that goes out of your business (an expense) and the money that comes into your business (your income).


Expense Basics


We need to record the money that goes out of our businesses so we can know what our...

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Best Bookkeeping Blogs of the Year

There’s nothing quite like the end of the year to help remind you about how busy you’ve been for the past 11 and a half months.


So, to put a bow on our 2018, we’ve got a short list of our best bookkeeping blogs and our guide on how to pay yourself.


If you’re spending a lot of time with us, there’s a decent chance that you’re in the northern hemisphere, and that means it’s winter! Here’s my favorite warm drink recipe, a mexican mocha, as a little treat from me to you this season!


Inside Out Mexican Mocha Recipe

This can be used with a regular 8 ounce cup of coffee or with a double espresso shot :)


  • 1 cup powdered sugar
  • ½ cup unsweetened cocoa powder
  • 2 generous tsp of cinnamon
  • 2 tsp nutmeg
  • 1 tsp cayenne pepper (1 ½ if you like things a little spicy, like me)
  • Use 3 Tbsp per serving, mix into a regular cup of coffee or your favorite espresso drink.
  • Enjoy!



End of the Year...

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Year End Tips and Tricks


Can you believe that 2018 is almost done??!


We certainly can’t! It doesn’t seem to matter how organized your are, when you have a lot of stuff to do, it’s almost like time passes faster. And since I’d get in trouble if this blog became a discussion about relativity, we’ll skip to the good part and cover 4 Tips and Tricks to help you make sure your books are where they need to be!

4 Ways to Ensure your Books are Ready for the New Year


If you’ve kept up with our blogs throughout 2018, you might be familiar with some of these tips, but that won’t make them any less useful.


Whether you’ve mostly kept up with your books for the year, or you’re staring down multiple months of transactions, read on for some ways to save your time and sanity!

1 The Chart of Accounts


Your Chart of Accounts, or CoA, is your friend! It contains all of the categories that you use to keep your bookkeeping records as well...

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How to Set Up A Bookkeeping System

Previously we covered the difference between Bookkeeping and Accounting and the definition of Bookkeeping, so now that you know what it is, we’ll show you how to use it!


If Bookkeeping is the act of recording financial transactions, then a bookkeeping system is a system designed to record and view these financial transactions!


Basic Small Business Bookkeeping Overview 

Let’s briefly recap some important ingredients in this financial pie!

There are several basic (but very important parts) of a bookkeeping system: the basis, the entry system, and the usage of bookkeeping or accounting tools.


Basis refers to which method you’ve chosen to record financial transactions.....  cash or accrual basis?


Entry System refers to single or double-entry bookkeeping. It is closely tied to your tool of choice, as well. We highly recommend that you use double entry for bookkeeping, it is more accurate and provides you with more data. To make...

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Bookkeeping vs Accounting


“OK, what’s the difference between bookkeeping and accounting?”

It might seem like bookkeeping covers all of the finances of your small business, but there’s a lot of other information that bookkeeping simply does not provide. Bookkeeping is really only a slice of the accounting pie, and a healthy business needs more than one slice of pie.

Accounting Basics


Accounting, at the most basic level, is the system of recording and summarizing business finances. Now that might sound really familiar if you read our last blog, but stay with me! It’s more than just recording the transaction like we do when bookkeeping, accounting also means verifying, analyzing, and reporting these transactions. Accounting also includes the theory and method by which you do all of the above.


Bookkeeping is one of the systems that makes up accounting. So you need bookkeeping to do accounting for any business, but successful bookkeeping does not require...

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