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What is double-entry bookkeeping?

Double-entry bookkeeping is an accounting method where every transaction gets recorded in two places. Money doesn’t just disappear or appear in your books. It moves from one account to another.

When you buy office supplies for $200 with your business debit card, two things happen in your books. Your cash goes down by $200, and your office supplies expense goes up by $200. One side balances the other. That’s the “double” in double-entry.

This isn’t just an accounting tradition. It’s a built-in error-checking system. If your debits don’t equal your credits, something is wrong. Maybe a transaction was entered once instead of twice. Maybe the amounts don’t match. The imbalance tells you there’s a problem to find and fix.

Single-entry bookkeeping is simpler but riskier. It works like a checkbook register where you track deposits and payments. You know your bank balance but you don’t have a complete picture of assets, liabilities, income, and expenses. You can’t produce reliable financial statements from a checkbook register.

Every accounting software package from QuickBooks to Xero uses double-entry behind the scenes. When you categorize a transaction in your bank feed, the software handles the matching entry automatically. You don’t see debits and credits unless you look at the journal entries. This is why monthly bookkeeping produces accurate financial statements even when you’re not thinking about accounting theory.

Your accountant expects books kept with double-entry. Your bank wants financial statements that only double-entry can produce. If you ever sell the business or seek investors, they’ll require proper accounting. Single-entry won’t cut it.

If this feels complicated, that’s what a San Diego bookkeeper is for. The mechanics of debits and credits don’t have to be your expertise. What matters is that your books follow the standard method so they’re accurate, auditable, and useful for running your business.

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More Questions

How do I report employee tips for taxes?

Employees must report their tips to you, and you include those tips in their wages for payroll tax purposes. You withhold income tax and FICA from their pay, and you pay the employer portion of FICA on the reported tips.

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How do I reconcile accounts in QuickBooks?

Reconciliation matches your QuickBooks transactions against your bank or credit card statement. In QuickBooks Online, go to Settings, select Reconcile, and check off transactions until the difference reaches zero.

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Do I need to charge sales tax on shipping?

It depends on the state and how the charge appears on invoices. In California, shipping is generally not taxable if separately stated and reflecting actual carrier costs, but handling fees are taxable.

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What is prime cost and why does it matter?

Prime cost is your cost of goods sold plus labor costs. For restaurants, it's typically the two largest controllable expenses and should stay between 55% and 65% of sales for healthy profitability.

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What QuickBooks reports should I run monthly?

At minimum, run the Profit and Loss, Balance Sheet, and Cash Flow Statement every month. Add A/R and A/P aging reports if you invoice customers or have vendor bills. The key is actually reviewing them, not just generating them.

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Are there bookkeepers in San Diego who specialize in my industry?

Yes, San Diego has bookkeepers who specialize in specific industries. Industry expertise matters because each sector has unique accounting needs, from job costing in construction to tip reporting in restaurants.

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Fresh Ledger provides full-service bookkeeping for San Diego County's small businesses. We handle monthly financials, payroll setup, and part-time CFO services for local business owners who want their numbers done right.

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