The Small Business Bookkeeping Basics

Bookkeeping is the system that turns daily transactions into usable financial information. The goal is not only to satisfy tax filing requirements; it is to know what your business is earning, spending, owing, and collecting.

Separate business and personal activity

Use dedicated business banking and cards whenever practical. Mixing transactions creates avoidable cleanup and makes reporting less reliable.

Record transactions consistently

Choose a weekly cadence for reviewing bank feeds, coding transactions, and attaching supporting documents.

Reconcile every month

Bank and credit-card reconciliation helps confirm that the accounting records match what actually cleared the financial institution.

Review the core reports

• Profit & Loss: revenue and expenses over a period.
• Balance Sheet: assets, liabilities, and equity at a point in time.
• AR Aging: customer balances by age.
• AP Aging: bills owed to vendors by age.

Close the month

Use a checklist so recurring entries, reconciliations, and review steps are not forgotten.