When it comes to bookkeeping services for your small business, there are a lot of options at your disposal. Double-entry accounting is one possible solution to your bookkeeping needs, which provides more detailed information than the single-entry approach. Learn more about this option and how it could benefit your business below.

How Does Double-Entry Accounting Work?

As the name suggests, double-entry accounting involves two entries for every transaction. These entries are listed as debits and credits, which tells you what money is coming in and what money is going out.

For example, when you purchase $5,000 worth of supplies for your business, your cash account will be decreased by that amount. However, your business supplies will be increased by $5,000, which means your books are balanced. This method can be used for all business expenses and income across the board, with each transaction having two separate entries.

What Are Its Benefits?

Single-entry accounting is easier than double-entry, and in simple work situations, single-entry may be sufficient at keeping a business owner on track. However, most people who use double-entry bookkeeping are pleased with the benefits it offers.

The most significant benefit is the easy recognition of any mistakes. With single-entry, errors might not be discovered until it’s too late to remedy them. When using a double-entry system, you’ll be aware of any issues as soon as you see your sheet is out of balance. Double-entry also provides more detailed information about your finances, which will help you make smarter decisions when it comes to the needs of your business.

If you’re a small business owner in Silver Spring, MD, who’s looking for dependable bookkeeping services, contact ZP Tax, Inc. for quality assistance. Along with tax preparation for individuals and businesses, they also provide payroll and bookkeeping services using trusted accounting methods that get results. Call (301) 587-4829 or visit their website to schedule a consultation today.