What is bookkeeping and how do you do it?

  • 3 min read
  • 24 Oct 2023

Bookkeeping. What is it? And how do you do it? It’s the million-dollar question on all self-employed minds. 🤔

And we’re mind readers when it comes to big and burning tax questions. 

Put simply, bookkeeping is the practice of recording and tracking the financial transactions of a business. 

Think Sony Music meets Sherlock Holmes. 

But, there’s a lot more to it than that. So, let’s get this blog underway. 🏁

Why is bookkeeping important? 

As we said, bookkeeping helps you to record and track all of your business finances. By this, we mean income and expenses, payments, taxes and much more! 

So, we’ve given you a basic definition of bookkeeping already. But that won’t be enough if we want to help you become the best in the biz’, which is why we’re going to get you up to speed, in just a few minutes. 💨

The first thing you should know is why bookkeeping is crucial to the success of your business.

Here are a few reasons to get us started: 

  • It helps you prepare for your tax return –  as this is a cause close to our hearts, we can vouch for this. Having all your income and expenses stored and ready to go in one place is something we should all aspire to. ✨
  • It helps you to budget – keeping your income and expenses organised and understanding your financial situation will help your business boom! 💥
  • Maintaining records – organisation is the key to success, after all. You’ll have all your records ready for whenever and whoever wants to peruse them. 📚

And that’s just to name a few … 

What’s the difference between bookkeeping and accounting?

Talking about bookkeeping involves a lot of financial jargon. And the use of terms such as income, invoices and expenses, understandably causes some confusion. 🤕

Bookkeeping is essentially point ‘A’. It involves recording and organising a business’s finances. 

  • Scanning documents and receipts 🧾
  • Creating invoices for clients 
  • Tracking income and expenses 🕵️
  • Ensuring employees are paid on time 
  • Paying bills to suppliers 🚚
  • And much more!

This brings us to what we’re going to call point ‘B’, accounting. 

Accounting focuses on the bigger financial picture. To do this, accountants need to analyse the information provided by bookkeepers. Can you see where we are going with this? 

  • Scanning documents and receipts 🧾
  • Creating invoices for clients
  • Tracking income and expenses 🕵️
  • Ensuring employees are paid on time
  • Paying bills to suppliers 🚚
  • And much more!

If you hadn’t guessed already, before you can reach point ‘B’, you’ll need to make sure your bookkeeping is spick and span. 🧹

What is a bookkeeping tool?

As we’ve learnt, bookkeeping requires excellent organisation! The lengthy admin, spreadsheets and chasing of payments make it a time-consuming (and boring) business necessity. 🥱

But it doesn’t have to be this way! In fact, it can be quick, easy and fun. Who would have thought?

With our new, free bookkeeping tools, you can stay on top of your business’ finances once and for all! 

Here are just a few things you can do with our tools: 

What you can do 🚀The advantages
Create, personalise and send invoices in just a few clicksNo need to use different platforms when you can do it all in one place with our simple and easy-to-use invoice software! 
Scan, upload and organise receiptsOur AI-powered data extraction tool will pull all your business spending straight from your receipts
Get a 360 view of your finances With everything all in one place, you can clearly see an overview of your income and expenses
Seamlessly link bank accountsPull your business spending automatically, and say goodbye to time spent sifting through your accounts or spreadsheets

Eager to find out more about our terrific tools? Check out our bookkeeping demo below 👇

Go get it!  

Now you know what bookkeeping is and how to do it, you’re ready to boss your business. 

The stabilisers might have come off, but don’t worry, you’ll always have our tools and our support to help you along the way! 🚲

🚀 Boss your bookkeeping – for free

Manage your self-employed finances in one place with 10/10 bookkeeping tools.

  • Save money, time and effort
  • Create and personalise invoices
  • Track all your income and expenses in one place
  • And more!
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