In this article
Double-entry accounting is an international methodology that requires recording accounting transactions on at least two accounts simultaneously, with one side showing a debit (DEBIT) and the other a credit (CREDIT). This system enables a dual function: determining income and controlling cash flow. Once the transaction is recorded, there must be a condition of equality between the debit and credit.
It is based on two fundamental elements:
- Balance sheet – contains all asset accounts and is used to examine the financial aspects.
- Income statement – contains the accounts for costs and revenues and is used to examine the economic aspects.
In Banana Accounting, all accounts are listed in the Accounts table. Depending on the chosen template, these are adapted based on the company's legal nature, country, and business activity.
Banana Accounting offers many pre-configured templates to facilitate getting started.
Why use double-entry accounting
- It is universal. This methodology is recognized worldwide.
- It complies with legal requirements by providing all the data necessary to prepare and submit tax declarations. The generated documents must be stored for ten years and made available to tax authorities in case of an audit.
- It supports the company in all its stages, providing insight into both economic and financial aspects at any time.
- It shows at any moment how much money is available, how much has been spent, what it has been spent on, and where it came from.
- By adhering to the principle of equality between debit and credit (DEBIT and CREDIT), errors are easily detected because any discrepancy becomes immediately apparent.
- It highlights elements of both equity and third-party capital.
- It reveals to what extent investments can be financed with equity or whether loans are necessary.
- It provides detailed information for analyzing both internal management activities and external relations.
- It offers reference values to measure the company's profitability in various aspects.
Banana Accounting has modernized double-entry bookkeeping. In addition to the mentioned benefits, its various features allow for fast data entry. Many complex operations are simplified, such as VAT management, multi-currency accounting, invoicing, and much more, which you can explore as you use the software.