BENCH SMALL BUSINESS GUIDES Step 2. Choose a bookkeeping system There are two main bookkeeping methods: single-entry, and double-entry. There’s no right or wrong, it’s just a matter of picking the system that’s right for your business, and sticking with it consistently. Single-entry is a simple system that might work for you if your bookkeeping is very straightforward. Entries are recorded one time, as either an input or output. Especially if you’re doing your own bookkeeping, this is likely the approach you’ll want to take. Double-entry is more complex, but also more robust. First, all transactions are entered into a journal, and then each item is entered into the ledger—you guessed it—twice, as both a debit and a credit. For example, if you own an ice cream shop, each time you sell a pint of ice cream, the sale is entered as a credit to your “cash” account and as a debit to your “ice cream” account (more on accounts later). Debits and credits entered in the ledger should always add up to zero. The IRS has published a handy list of guidelines to help you understand the ins and outs of double-entry. Using the double-entry method is complicated at first, and may require the help of a trained bookkeeper. But it will give you more accurate books overall. Think of it like double-checking your answers before you hand in a math test. 8