Bookkeeping

Bookkeeping is the foundation of financial veracity. Reliable accounting requires double-entry rigor, adherence to the accrual principle (ASC 606 / matching principle), structured Chart of Accounts (COA) taxonomy, and disciplined month-end close checklists.

1. Chart of Accounts (COA) Taxonomy

Organize accounts in a standard five-digit hierarchical numbering schema:

• 10000 – 19999 Assets: 10100 Operating Cash, 10200 Treasury MMF, 11000 Accounts Receivable, 12000 Prepaid Expenses.
• 20000 – 29999 Liabilities: 20100 Accounts Payable, 21000 Accrued Expenses, 22000 Deferred Revenue (Unearned).
• 30000 – 39999 Equity: 30100 Common Stock, 30200 Additional Paid-in Capital (APIC), 30300 Retained Earnings.
• 40000 – 49999 Revenue: 40100 SaaS Subscription Revenue, 40200 Professional Services, 40300 Refunds/Discounts.
• 50000 – 59999 Cost of Goods Sold (COGS): 50100 Cloud Hosting (AWS/GCP), 50200 Payment Gateway Fees (Stripe), 50300 Customer Support Salaries.
• 60000 – 69999 Operating Expenses (OpEx): 61000 R&D Salaries, 62000 Sales & Marketing, 63000 G&A (Legal, Accounting, Rent).

2. Double-Entry Journal Entry Discipline

Every transaction must satisfy the fundamental balance sheet equation: $$\text{Assets} = \text{Liabilities} + \text{Equity}$$