Bookkeeping for beginners: the complete guide
Just started as an entrepreneur? Learn the basics of bookkeeping: what you need to record, which rules apply, and how to automate it. Practical guide for starters.
What is bookkeeping?
Bookkeeping is the systematic recording of all financial transactions of your business: income, expenses, assets and liabilities. As an entrepreneur in the Netherlands you are legally required to keep records. Your bookkeeping forms the basis for your VAT return, your income tax return and possibly your annual report. But bookkeeping is more than an obligation — it gives you insight into your profit, your cost items and your liquidity. With modern accounting software like Giroo you automate the largest part: bank transactions are imported automatically, purchase invoices are recognised via OCR, and posting rules learn from your previous choices. This way your records are always up to date, even without an accounting background.
What do you need to record?
The Belastingdienst requires you to keep complete and reliable records. This includes:
Required documents
- Purchase invoices — all invoices you receive from suppliers
- Sales invoices — all invoices you send to customers
- Bank statements — from all your business bank accounts
- Cash records — if you receive cash payments
- Quotes and contracts — for traceability
Retention obligation
You are required to retain your records for 7 years. For immovable property a retention period of 10 years applies. Digital storage is permitted, provided the documents remain legible and unaltered. Read more in our article on the records retention obligation.
Debit and credit: the basics
Every posting has two sides: debit (left) and credit (right). This is called double-entry bookkeeping:
- Debit = assets increase, or liabilities decrease
- Credit = assets decrease, or liabilities increase
Example: you send an invoice for € 1,210 (incl. 21% VAT)
| Account | Debit | Credit |
|---|---|---|
| Accounts receivable | € 1,210 | |
| Revenue | € 1,000 | |
| VAT payable | € 210 |
The chart of accounts
Your bookkeeping is built from general ledger accounts, grouped into categories:
- Balance sheet accounts — assets and liabilities
- Profit and loss accounts — revenues and expenses
A typical chart of accounts for a self-employed person:
| Number | Name | Type |
|---|---|---|
| 1000 | Cash | Asset |
| 1100 | Bank | Asset |
| 1300 | Accounts receivable | Asset |
| 1600 | Accounts payable | Liability |
| 8000 | Revenue | Income |
| 4000 | Purchase costs | Expense |
| 4100 | Accommodation costs | Expense |
Practical tips for beginners
- Separate business and private — open a business bank account
- Post weekly — don't wait until the end of the quarter
- Use accounting software — manual bookkeeping in Excel is error-prone
- Scan receipts immediately — till receipts fade quickly
- Link your bank account — automatic import saves hours
- Ask for help — an accountant can save you a lot of money
Bookkeeping with software
Modern accounting software like Giroo makes bookkeeping accessible, even without an accounting background:
- Automatic bank connection imports transactions
- Scan & recognise processes purchase invoices automatically
- Smart posting rules learn from your previous postings
- VAT return is automatically calculated and submitted via Digipoort
- Reports give immediate insight into your figures