Accounting

What is accounting?

Accounting is the systematic process of recording, organizing, and analyzing financial transactions. It provides business owners with the information they need to make informed decisions, meet tax obligations, and understand whether their business is profitable.

For contractors and small business owners, accounting doesn't need to be complicated. At its core, it's about knowing how much money is coming in, how much is going out, and what's left over.

Why accounting matters for small businesses

Good accounting practices help you:

• Track profitability — Know if you're actually making money after expenses
• Prepare for taxes — Have accurate records ready when tax season arrives
• Make better decisions — Understand which services or clients are most profitable
• Manage cash flow — Avoid running short when bills come due
• Secure financing — Banks and lenders require financial records for loans

Accounting vs. bookkeeping

Bookkeeping is the day-to-day recording of transactions—entering invoices, logging expenses, and reconciling bank statements. Accounting takes those records and turns them into meaningful reports and insights. Many small business owners handle bookkeeping themselves and bring in an accountant for tax preparation and strategic advice.