The core idea
Every transaction affects at least two accounts. Get paid $1,000 for a project: cash goes up $1,000 (a debit to Cash) and revenue goes up $1,000 (a credit to Sales). The two sides always equal, which is why the balance sheet 'balances.' Single-entry — basically a checkbook list — just records the $1,000 in and can't produce a true balance sheet.
Why it matters for your business
Double-entry is what makes a Profit & Loss statement and a Balance Sheet possible and trustworthy. It catches errors (if the two sides don't match, something's wrong), and it's the expected standard for taxes, loans, and due diligence. If you ever want financing or to sell, single-entry books won't cut it.
Do you have to do it by hand?
No. Modern accounting software does the debits and credits for you — you see plain categories, it keeps the double-entry ledger underneath. With Holdings, that ledger is native to your bank account ($25/mo for full accounting), so a paid invoice posts both sides itself, in the same place the money landed. You get real double-entry books without ever touching a journal entry.
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Frequently asked questions
What's the difference between single-entry and double-entry?
Single-entry records one side of each transaction (like a checkbook) — fine for the simplest cash tracking but can't produce a balance sheet. Double-entry records both sides (debit and credit), enabling real financial statements and error-checking.
Do small businesses need double-entry accounting?
If you want a real P&L and balance sheet, plan to get a loan or investment, or work with a CPA, yes. Most accounting software handles the mechanics automatically, so the bar is much lower than it sounds.
Does Holdings do double-entry accounting?
Yes — full double-entry accounting (general ledger, P&L, balance sheet) is the $25/mo Software plan, built into the bank account so entries post automatically as money moves.