Bookkeeping basics for small businesses

Bookkeeping is the recording of financial transactions, and is part of the process of accounting in business and other organisations. It involves preparing source documents for all transactions, operations and other events of a business. There are two common methods. Single-entry bookkeeping records only one side of a transaction and is suitable for very small businesses; double-entry bookkeeping records every transaction as a debit and a credit in at least two accounts, which gives a more complete and verifiable picture. Basic records every business should keep are a cash book, a sales journal, a purchases journal and a simple ledger of debtors and creditors.