Small Business Bookkeeping Basics

April 20, 2025
Published by Gonzales Group CPA

No matter how small your business is, bookkeeping is a vital part of keeping it functional. Besides the obvious invoices, bills, and expenses and their part in understanding your financial situation, it’s important to keep up with all of your documentation so that you don’t miss payments and run up against costly fees, especially when it comes to taxes. While a CPA in San Antonio TX, such as the Gonzales Group, can be a big help, it’s good to understand the basics of bookkeeping.

It’s important to understand the difference between bookkeeping and accounting as they are not the same thing. Bookkeeping is about recording and balancing daily transactions, debits and credits, understanding day-to-day financial questions, and overall balancing and maintaining a ledger. Accounting is more focused on analyzing business costs, doing in-depth planning and forecasting, and the actual tax preparation.

As a small business owner, make sure you’re keeping your personal and business accounts and paperwork separate to avoid confusion. Whether you use bookkeeping software or spreadsheets, the key is organized consistency. This helps you better view your financial statements and prepare them for taxes or even understanding the health of your business.

There are different methods of bookkeeping: cash and accrual. With the cash method, you record expenses when you pay a bill and record income when you receive payment. The transactions are recorded when you actually receive or spend any money. With the accrual method, you record expenses and incomes before the money has actually changed hands, though this is generally for larger businesses.

You’ll need to track multiple accounts in order to create a general ledger. The accounts to keep up with include assets, liabilities, revenue/income, cash, accounts receivable, and accounts payable.

While bookkeeping can be done by the small business owner, it can soon become a job in itself, taking away from the time you should be spending on maintaining and growing your small business. For help with all of your small business bookkeeping and other financial issues, turn to Gonzales Group, a respected CPA in San Antonio TX. We look forward to hearing from you and helping you make the most of your business.

Categorised in: audit questions, Business Tips, Small Business Bookkeeping Basics

This post was written by Gonzales Group CPA