bookkeeping-basics

---
name: bookkeeping-basics
description: Set up and maintain basic bookkeeping for a solopreneur business. Use when tracking income and expenses, preparing for taxes, managing invoices and receipts, understanding cash flow, or generating financial reports. Covers accounting software selection, chart of accounts, expense categorization, reconciliation, and financial statements. Not professional accounting advice — consult a CPA for complex situations. Trigger on "bookkeeping", "accounting", "track expenses", "financial records", "QuickBooks", "invoicing", "receipts", "profit and loss".
---

# Bookkeeping Basics

## Overview
Bookkeeping tracks where money comes from and where it goes. Most solopreneurs hate bookkeeping, so they avoid it — then face chaos at tax time or when applying for loans. This playbook gives you a simple system: minimal time, maximum clarity. **Disclaimer: This is educational content, not professional accounting advice. Consult a CPA for complex situations.**

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## Step 1: Choose Your Accounting Software

Don't use spreadsheets. Use accounting software. It automates most of the work and keeps you compliant.

**Software comparison:**

| Software | Best For | Pricing | Learning Curve | Features |
|---|---|---|---|---|
| **Wave** | Freelancers, very small businesses | Free (pay for payments/payroll) | Easy | Basic invoicing, expense tracking, reports |
| **QuickBooks Online** | Most solopreneurs, scaling businesses | $15-50/month | Medium | Full accounting, invoicing, tax reports, integrations |
| **FreshBooks** | Service businesses, invoicing-heavy | $17-55/month | Easy | Invoicing, time tracking, expense tracking |
| **Xero** | International businesses, contractors | $13-70/month | Medium | Full accounting, multi-currency, payroll |

**Selection guide:**
- Just starting, no revenue yet → Wave (free)
- Revenue < $50K/year → Wave or FreshBooks
- Revenue $50K-250K/year → QuickBooks Online
- International clients or contractors → Xero

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