10 Bookkeeping Terms Every Entrepreneur Should Know

I see you—balancing vision with vendor emails, passion with payroll, and somehow still finding time to glance at your books (or at least feel guilty for not doing so). But let’s be honest: bookkeeping terms can sound like a foreign language when your real focus is growing your business. So, let me break this down like I would for a client over coffee—no jargon storm, just the essentials. 

Here are 10 bookkeeping terms you really want to have in your back pocket. 

1. Chart of Accounts (COA) 

Think of this as your business’s financial map. Every income, expense, asset, or liability gets its own labeled spot here. It’s like your company’s financial index—without it, everything gets lost. 

2. Accounts Receivable (A/R) 

The money people owe you. If you’ve sent invoices and are waiting to get paid, that’s your A/R. High A/R might look great—until you realize it’s cash you don’t have yet. 

3. Accounts Payable (A/P) 

Flip side. This is the money you owe—to suppliers, contractors, utility companies, maybe even your cousin who lent you cash that one time (kidding… sort of). 

4. General Ledger 

This is where all the financial magic—or chaos—lands. It’s the master record. Every transaction flows here, quietly building the story of your business. Want to know where you went wrong or right? The ledger knows. 

5. Accrual vs. Cash Basis 

Big one. Cash basis means you count money when it comes in or out. Accrual? You count it when it’s earned or incurred, even if no money’s moved. Confused yet? That’s normal. This one’s worth asking your bookkeeper about directly. 

6. Reconciliation 

No, not the emotional kind (though those are important too). This means matching what your books say with what your bank says. If they disagree, it’s time to dig. 

7. Trial Balance 

This is your bookkeeping report card. It adds up all the debits and credits to check if everything’s balanced. Spoiler alert: if it isn’t, something’s off. 

8. Journal Entry 

Every transaction starts here, like an entry in a diary—but for numbers. Behind every coffee run and client payment is a journal entry whispering, “I was here.” 

9. Depreciation 

Stuff loses value. Your truck, your laptop, even that fancy espresso machine. Depreciation tracks that slow fade, and yes—it affects your taxes. 

10. Equity 

This is what’s left if you sold it all and paid everything off. Your stake, your skin in the game, your reward when it all goes right (and your risk when it doesn’t). 

You don’t have to become a bookkeeper (that’s my job), but knowing these terms helps you ask smarter questions—and make sharper decisions. Because the truth is, your books aren’t just numbers. They’re your business, translated. So the next time someone drops “trial balance” in a meeting, you won’t blink. You’ll nod. Confident. Cool. In control. 

And if you ever need help decoding the rest of the financial maze, I’ve got you. 

This information should never be taken as advice. Please talk to your bookkeeping and tax business professionals to discuss your individual situation. By the way, we’d love to partner with you on that! Give us a call or schedule your no-obligation consultation today. Click here to book a call.