Definition
The day-to-day recording of financial transactions — invoices, payments, expenses — that feeds accounting and tax preparation. Distinct from accounting (which interprets the records) and tax filing (a licensed function).
Why it matters
Bookkeeping is often the first function an owner outsources, because it's essential, time-consuming, and easy to fall behind on while running the actual business. When records slip, the cost shows up later: a scramble at tax time, missed deductions, and no clear picture of whether the business is actually making money month to month. Keeping the books current turns finances into something you can act on rather than a once-a-year fire drill.