Double-entry bookkeeping records every transaction twice so the books always balance. This guide explains the system and why it is the foundation of accounting.
Published July 2026 · Updated July 2026
Double entry is the standard system where every transaction is recorded on two sides, a debit and a credit of equal value. The idea, centuries old, is that money always comes from somewhere and goes somewhere, so you record both the 'from' and the 'to'.
Because each transaction records equal debits and credits, the totals must always match. This is what underpins the accounting equation and lets a balance sheet balance. If it does not, something is wrong, which is exactly why the system is so useful.
Single entry (like a simple cash log) records only one side, what came in or went out. It is simpler but cannot produce a reliable balance sheet or catch many errors. Double entry does both.
A £900 sale paid into the bank:
No, the software handles it. But knowing the basics helps you understand your reports and spot when something looks wrong.
It was formalised in 15th century Italy and is often associated with the mathematician Luca Pacioli, though merchants used it earlier.
No. It catches entries that do not balance, but not a transaction coded to the wrong (but still balancing) account. Reconciliation catches more.
Source: Investopedia ↗. This glossary is written for small business owners, so definitions are simplified. Tax rates and thresholds reflect 2026/27 UK rules and change over time. Berified does not provide accounting, tax or legal advice; always check the source or a qualified adviser.