As your business begins to grow, it’s important to find ways to track your progress so you can learn from your mistakes and build on your success.
Maybe you’re a music teacher who doesn’t know that a piano tune-up isn’t an expense, and you misrepresent your margins. Maybe you’re a photographer who sells an image to a stock website and you find yourself wishing there was an easy way to track Other Income. (Spoiler alert: There is.) Bottom line: You’re missing opportunities to increase your growth potential.
To help, FreshBooks has added new double-entry accounting features that open up a world of business insights, make it easier to collaborate with accounting professionals, and give you the kind of financial precision that can’t be beaten at tax time.
Double-entry accounting is the industry-standard practice for recording transactions. Every transaction must have matching debit and credit entries that affect at least 2 accounts. This helps to paint a more complete and accurate picture of your books.
Double-entry accounting allows you to understand exactly how much money you’re making versus spending. For example, if you buy a computer, you’ve both spent money and gained a computer. Double-entry accounting tracks both sides of the transaction so that your books balance out.
With a more thorough breakdown of your financial activity, FreshBooks double-entry accounting gives you a complete picture of where your business stands. This allows you to confidently make more informed decisions like setting aside enough money for tax time, hiring a new employee, or making a big-ticket purchase.
While single-entry accounting is useful for tracking revenue and expenses, double-entry accounting can also help track your assets, liabilities, and equity.
FreshBooks double-entry accounting is for anyone who wants to know:
And if you’re a FreshBooks Plus, Premium, or Select customer, you automatically have access to it!
There’s a lot to dive into with industry-standard double-entry accounting. If you need any help, reach out here.
This post was updated in November 2022.