--- title: "Bookkeeping: Definition and Sources | Tax Glossary" description: "Bookkeeping is the routine recording of a business's daily transactions, such as income, expenses and payments, so the records support its tax returns and..." url: https://wallacecpa.multisites.ai/glossary/bookkeeping publisher: Wallace CPA phone: +1-877-682-1171 quote: https://wallacecpa.multisites.ai/contact --- Bookkeeping and payroll # Bookkeeping Bookkeeping is the routine recording of a business's daily transactions, such as income, expenses and payments, so the records support its tax returns and statements. Bookkeeping means writing down what a business earns and spends as it happens. The IRS says good records help you monitor your business, prepare financial statements, identify sources of income, track deductible expenses and support your tax return. The records feed a [chart of accounts](https://wallacecpa.multisites.ai/glossary/chart-of-accounts) and from there the [profit and loss statement](https://wallacecpa.multisites.ai/glossary/profit-and-loss-statement) and the [balance sheet](https://wallacecpa.multisites.ai/glossary/balance-sheet). Most small businesses use software and reconcile bank accounts each month. Clean books make year end faster and answers to a notice easier. The [small business accounting page](https://wallacecpa.multisites.ai/services/small-business-accounting) describes the service. [Wallace CPA can helpSmall business accounting](https://wallacecpa.multisites.ai/services/small-business-accounting) ## Related terms - [Chart of accounts](https://wallacecpa.multisites.ai/glossary/chart-of-accounts) - [Profit and loss statement](https://wallacecpa.multisites.ai/glossary/profit-and-loss-statement) - [Balance sheet](https://wallacecpa.multisites.ai/glossary/balance-sheet) - [Accrual accounting](https://wallacecpa.multisites.ai/glossary/accrual-accounting) ## Sources 1. [IRS: Recordkeeping](https://www.irs.gov/businesses/small-businesses-self-employed/recordkeeping) ## Talk to Wallace CPA Call the Southlake office and say what you need: a return, an IRS letter, your books or a new business. Have the notice or last year's return nearby if you have one. [Call (877) 682-1171](tel:+1-877-682-1171)[Send a message](https://wallacecpa.multisites.ai/contact) 180 State Street, Suite 225, Southlake, TX 76092