Double entry bookkeeping is an accounting system that means every transaction requires two accounts. For example, when a business uses funds from a loan, their Cash account will increase and their Liability account – or Loans Payable will increase.
Double entry bookkeeping allows for the accounting equation (assets = liabilities + owner’s equity) to be in balance.
Double entry bookkeeping also means that the amounts entered into the General Ledger accounts as debits must be equal to the amounts entered as credits.
At Plumb, a premier outsourced accounting firm, we work with companies across the country to handle their bookkeeping and accounting needs. Our accountants understand the importance of the double entry system in order to get an accurate view of business finances. By tracking every transaction and recording a debit to one account with a credit to another account, we make sure all accounts are in balance.
The double entry accounting system is a more complete way to track your spending, cash and reconcile accounts. The benefit of using this system of tracking is to make financial reporting easier. This process will generate more detailed income statements, including statement of cash flow and balance sheets, so your business can have more up-to-the-date financial picture.
Considering using a firm for outsourced accounting services to handle your double entry bookkeeping? Here are some of the ways that Plumb can help.
Plumb works with companies on a part-time and interim basis or can fully outsource your accounting department, and we have industry expertise and software expertise in Sage, NetSuite, and QuickBooks. Pricing is on a fixed fee basis or hourly rates depending upon the level of services. Please contact us for more information. We're here to help!