Finance & Accounting Articles

What Is Double-Entry Accounting? Here Are 6 Apps to Help You Balance the Books

by Lauren Maffeo
Published on 30 November 2017

What is Double-Entry Accounting? Here Are 6 Apps to Help You Balance the Books

Unless you studied accounting at school, it's likely that you haven't heard of single-entry vs. double-entry accounting. But if you're a small business owner, balancing the books is part of the package.

In an ideal world, you'd find accounting software that lets you work with an accountant or bookkeeper in real time. But even if you get that far, you still have a big choice to make: whether to use single-entry or double-entry accounting. Then, you must buy software that supports your method of choice.

Single-entry accounting might not be a bad choice if you're a solopreneur. Without employees and inventory to manage or people to pay, the single-entry method -adding money that comes in, then subtracting expenses- might be enough for your small business.

But if that sounds too simple, then you know the truth: Small business accounting is a deceptively big job. If you don't accurately track your debit against your credit, your expenses can quickly get out of hand. That makes it much harder to know where your business stands financially. It's also where double-entry accounting comes in.

What is double-entry accounting?

Double-entry accounting means that every business transaction will involve at least two accounts. There's no limit to how many accounts you can use per transaction, but two accounts is the minimum.

Double-entry accounting's goal is to help you record each transaction in the accounts where money comes from and the accounts where money ends up. When the total of all debit entries matches the total of all credit entries, each transaction is considered "in balance." This helps you create correct financial statements.

As Capterra's Andrew Marder explains, "accounts" is a broad term. He illustrates double-entry accounting using the example of moving your checking to a physical object. In this case, the object would get its own account on your books (Mardar goes into more detail about double-entry accounting here).

In other words, double-entry accounting is more complicated than simply moving money from your checking to your savings account, but that's no reason to ignore it.

Despite causing some head scratches at first, double-entry accounting ends up making the process easier. Although single-entry methods might seem simple, they're too simple to track business assets and liabilities. This means that you won't have the information you need to build balance sheets at important times, like tax season. And coming across unbalanced books during tax time is a nightmare that could severely hurt your business.

Double-entry accounting software features

If you want to do more robust accounting, you must make sure to choose the right software. Luckily, this doesn't have to turn into an endless maze. The trick is to know which features you need most.

You'll be on your way to doing double-entry accounting if you can find accounting software that includes these features:

  • Cash flow and income statements
  • Balance sheets
  • Bank reconciliation
  • Invoicing and expense tracking
  • Accounts payable and receivable

Still want some more help starting your search? The following six accounting apps are the best place to begin. To earn a spot on this list, each app had to have an average rating of four stars or higher on GetApp.com and provide double-entry accounting features.

Kashoo

Screenshot of Kashoo (What Is Double-Entry Accounting? Here Are 6 Apps to Help You Balance the Books)

Kashoo is beloved by GetApp readers for its simplicity. It's designed specifically for small business owners who are often on the go and want to balance their own books themselves. GetApp reviewers rave about Kashoo's easy interface, collaboration with accountants, and quick customer service. All of these help users climb the double-entry accounting hump.

With native apps for iPhone and iPad, Kashoo prides itself on letting users do their books, pull profit and loss statements, and review balance statements on any device (an Android app is offered as well). Every action you make within Kashoo is recorded, and real-time dashboard views help you compare debit against credit entries.

Price: $16.65 per month on their annual plan.

QuickBooks Online

Screenshot of QuickBooks Online (What Is Double-Entry Accounting? Here Are 6 Apps to Help You Balance the Books)

QuickBooks Online is a mean, green, double-entry accounting machine. Research from GetApp revealed in 2017 that it's by far the most popular accounting software among small business owners in the U.S. That's largely because you can view all your information from its online login portal.

The dashboard allows QuickBooks Online users to track payments, create custom reports, manage profit and loss sheets, and build billing and invoicing solutions. You can also track cash flow, due dates, income vs. expenses, and more. One reader shares that QuickBooks Online eases data entry and reconciliations. Another shares that it's a great tool to help them track subscription payments and payments for services rendered.

Price: Four separate plans range from $5 per month for the self-employed to $25 per month for full businesses.

Sage Intacct

Screenshot of Sage Intacct (What Is Double-Entry Accounting? Here Are 6 Apps to Help You Balance the Books)

Sage Intacct is known as a strong double-entry accounting choice for midsize businesses that want full control. Be forewarned that this solution isn't cheap: They predict that a small business can spend $5k annually, while enterprises can expect to shell out up to $30k. But if you've got a robust budget for double-entry accounting software, this one's worth reviewing.

Workflow and cash management, balance sheets, and accounts payable and receivable are all available within Sage Intacct. You can also use the tool to automate transaction processing, data entry, and approvals. Many readers share how easy it is to customize work within Sage Intacct, from invoice and email templates to full reports.

Price: Request a quote via their website.

Wave

Screenshot of Wave (What Is Double-Entry Accounting? Here Are 6 Apps to Help You Balance the Books)

Wave is double-entry accounting designed for teams of nine employees or less. It's also free to use. So, if you're a true small business on a budget, it's safe to say that Wave was built for you.

Wave allows users to connect with their banks automatically, thus erasing manual entry. Users can also work with their bookkeepers in real time; email invoices; collect credit card payments; and build custom templates. All major credit cards are accepted, and readers love that Wave updates automatically when they get paid.

Price: free, with pay-as-you-go pricing for bank payment processing, credit card processing, and payroll.

Xero

Screenshot of Xero (What Is Double-Entry Accounting? Here Are 6 Apps to Help You Balance the Books)

Xero aims to give clear, concise accounting information for small business owners. If GetApp reviews are any indication, they seem to live up to the hype. The dashboard shows users at a glance which invoices are outstanding and which bills are upcoming. All of these features (and more) help users view their business financials at a glance.

Xero automatically imports daily bank and credit card transactions. Then, it matches each transaction to its corresponding accounting transaction. This helps users confirm if each match is correct and take action if not. Xero earns high praise from GetApp readers; one reviewer even shared that he returned to practicing accounting due to Xero!

Price: Three plans range from $9 per month to $70 per month.

Zoho Books

Screenshot of Zoho Books (What Is Double-Entry Accounting? Here Are 6 Apps to Help You Balance the Books)

Zoho Books was built to help businesses of all sizes manage their cash flows. To that end, its features for "money in" and "money out" management are impressive.

Users can automate recurring invoices and payment reminders. Additionally, all bank and credit card transactions are recorded and monitored, from checks and deposits to credits and refunds. This helps you reconcile bank and credit card statements. Readers love Zoho Books' easy invoicing, CRM integration, and data protection.

Price: Three plans range from $9 per organization per month to $29 per organization per month.

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