Bookkeeping is the process of recording, classifying, and summarizing financial transactions to provide accurate and timely financial information. It's the foundation of accounting.  

Bookkeeping is the day-to-day recording of financial transactions. Accounting is a broader field that includes analyzing and interpreting financial data, preparing financial statements, and making business decisions based on that information. Think of bookkeeping as the data entry and accounting as the analysis of that data.

Single-entry bookkeeping: A simple method suitable for very small businesses, recording income and expenses in a single ledger.

Double-entry bookkeeping: A more complex and accurate method where every transaction affects at least two accounts (debit and credit). This is the standard for most businesses.

Accurate bookkeeping is crucial for:

Tracking income and expenses: Knowing where your money is coming from and going.

Making informed business decisions: Understanding your financial health helps you make better choices.

Preparing financial statements: Essential for taxes, loans, and attracting investors.

Staying compliant with tax laws: Accurate records are necessary for filing taxes correctly.

Measuring business performance: Bookkeeping provides insights into profitability and growth.

Balance Sheet: A snapshot of a company's financial position at a specific point in time (Assets = Liabilities + Equity).

Income Statement: Reports a company's revenues and expenses over a period of time to show profitability (Revenue - Expenses = Net Income).

Cash Flow Statement: Tracks the movement of cash into and out of a company.

Choose QuickBooks if: You prioritize ease of use, need extensive customer support, and require a wide range of features, including potentially more advanced ones.

Choose Xero if: You value automation, prefer a modern interface, are on a tighter budget, and primarily need core accounting features.