Bookkeeping
Definition
The ongoing recording, categorizing and reconciling of every financial transaction in a business, so the financial statements are accurate and up to date.
Want a deeper explanation?
Good bookkeeping is the raw material for every decision you make about pricing, inventory, hiring and cash. For e-commerce it goes well beyond categorizing bank transactions: marketplace settlements, inventory and COGS all need their own process.
The test of good bookkeeping is whether you trust the numbers enough to act on them. Watch for: books that are always a few months behind, because by the time you see a problem it has already cost you.
Example
Each month, the bank, credit cards, Amazon and Shopify activity, bills and payroll are recorded and reconciled, then the P&L and balance sheet are reviewed and delivered.