The three basic accounting principles are the accrual principle, the consistency principle, and the matching principle. These principles serve as the foundation for recording and reporting financial transactions accurately.

The cash-based accounting method is the simplest method, and makes it easier to track your cash flow in real time. You record transactions when the money actually enters or leaves your business, even if they were earned or billed earlier.

Bookkeepers and accountants sometimes do the same work, but have a different skill set. In general, a bookkeeper's role is to record transactions and keep you financially organized, while accountants provide consultation, analysis, and are more qualified to advise on tax matters.

Bookkeeping, in large part, has to do with accurate recordkeeping. This means recording transactions and saving bills, invoices and receipts so you have all the data you need to run reports. Accounting software makes it easy to store these documents and reference them in case of an accounting error or audit.