What is bookkeeping, and why is it important? Well, Merriam-Webster defines a bookkeeper as “someone who records the accounts or transactions of a business”. So bookkeeping is the act of recording those accounts and transactions. It’s keeping track of all of the financial movements of money in a business, whether that’s for the expenses going out, the money coming in from providing the product or services or even holding money aside in savings for a future expense, like taxes!
This is so important for a couple of reasons. One, it’s really hard to tell if your business is actually making any money if you don’t know where your money is at, or where it’s going. And two, bookkeeping is legally necessary to keep your business in compliance with state and federal laws.