What is bookkeeping?

Bookkeeping is the day-to-day recording of a business’s money movements. The Business Development Bank of Canada (BDC), a federal Crown corporation, says bookkeeping means recording every business transaction in a system such as accounting software or a spreadsheet. Those transactions can include sales and other income, expenses and other payments, asset purchases, loan payments, lease payments, and investments.

BDC says good bookkeeping depends on recording that is:

• accurate (real figures, not guesses)
• reliable (put in the right place)
• timely (written down promptly so details are not forgotten)
• consistent (the same kind of entry is always recorded the same way)
• simple (enter a transaction once when you can, so you do not create extra errors)

BDC also explains that bookkeeping is one part of accounting. Accounting is a wider professional activity used to understand a company’s finances and support decisions. In Canada, BDC notes that an accountant needs formal training and membership in a professional order, while a bookkeeper does not need that same professional membership. Many businesses still want experience and computer skills when they hire a bookkeeper.

This course teaches everyday record-keeping words and habits. It does not make you a licensed bookkeeper or accountant, and it does not say which software you must buy. The CRA says it does not issue or recommend one official record book — many paper or computer systems can work if they are clear.

If you run a small activity or help a local group, ask a professional when the numbers become more than simple lists.