“Wait, What’s a Journal Entry?” – A Bookkeeper’s Clarifies
Let me tell you something most bookkeepers won’t admit up front:
The term journal entry sounds like something you’d scribble in a notebook at summer camp.
But in business it’s something else entirely. And yes, it matters—a lot more than you might think.
So, What Is a Journal Entry?
Imagine your business is a stage play. Things happen: you make a sale, pay a vendor, buy a coffee machine you didn’t really need but justified somehow (no judgment). Every one of those little moments is part of your business story. A journal entry is just how we bookkeepers write it down. But we don’t use paragraphs—we use numbers. And categories. And a structure that may look like code, but is actually a beautiful (yes, beautiful!) language called double-entry accounting.
Here's the bare-bones version:
A journal entry is the act of recording a business transaction in your accounting records—usually in something called the general journal. It always involves at least two accounts: one that gives, one that gets. That’s the dance.
Example Time: Keep It Simple, Right?
Let’s say you pay $200 for office supplies.
In human speak:
“I bought printer ink and Post-its.”
In journal speak:
Debit Office Supplies $200 (you now have supplies)
Credit Cash $200 (you gave up money)
Debit, credit. Something goes up, something goes down. Balanced like a tightrope walker with an obsession for symmetry. But wait—it’s not always cash. Maybe you bought on credit. Maybe it was a customer refund. Maybe it involved five accounts. This is where things get spicy.
What Are Journal Entries Used For?
You might be wondering, Why all the fuss? Can’t software just handle this?
Here’s the deal:
Journal entries are the DNA of your financial reports.
They feed your profit and loss statement.
They build your balance sheet.
They make sure the taxman sees the right numbers.
Every invoice, every paycheck, every “Oops, I meant to refund that”—it all starts with a journal entry. Sometimes they’re automatic. Sometimes we enter them manually—especially for adjustments, corrections, and those weird one-off scenarios that QuickBooks doesn’t quite understand (but we do). Without journal entries, your books aren’t books—they’re just blank pages.
Think of journal entries as the quiet workhorses of your financial world. You don’t see them, but they’re holding up everything you rely on—profit reports, tax returns, even those “how are we doing?” gut checks you feel at 2am.
So next time your bookkeeper mentions making an entry, don’t picture a diary. Picture a carefully balanced, double-sided story that’s keeping your business honest, clear, and heading in the right direction.
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.
