U.S. Bookkeeping Basics for International Entrepreneurs

The short answer

The IRS describes two bookkeeping systems: single-entry, a simple record of income and expenses, and double-entry, where each transaction is recorded in at least two accounts.
The IRS lists two basic accounting methods: cash, where income and expenses count when money moves, and accrual, where they count when earned or incurred.
Tax returns are prepared under tax rules. Some lenders and investors also ask for financial statements under GAAP: ask your accountant which applies to you.
A monthly routine of categorizing, reconciling and reviewing takes far less time than rebuilding a year at tax time.
For a foreign-owned single-member LLC, transfers between the owner and the LLC must be recorded separately from business income and expenses.

Table of contents

Two bookkeeping systems
The chart of accounts
Owner transactions need their own accounts
Cash or accrual
GAAP and tax reporting
Sales tax in your books
A monthly routine
Software
Controls that matter even for a small company
What MyUSAService offers
Frequently asked questions

The words used in U.S. bookkeeping are often the first obstacle for founders abroad. Terms like accrual, receivable or reconciliation have meanings that do not always translate from your language. This guide explains the basics, in the order you will meet them, and gives you a monthly routine you can follow yourself or check against the work of a provider. To compare providers, see our guide to bookkeeping services.

Two bookkeeping systems

The IRS describes two systems:

Single-entry: a simple record of income and expenses, like a checkbook. Fine for a very small business with few transactions.
Double-entry: every transaction is recorded in at least two accounts, one as a debit and one as a credit, so the books balance. It gives a complete picture and it is the base of accounting software.

If your company has a bank account, receivables or inventory, double-entry is the safer choice.

The chart of accounts

The chart of accounts is the list of categories in which every transaction is recorded. A simple one has five groups:

Group	Meaning	Examples
Assets	What the company owns	Bank accounts, money owed by customers
Liabilities	What it owes	Loans, unpaid bills, sales tax collected
Equity	The owner’s stake	Owner contributions, owner withdrawals, retained profit
Income	Money earned	Sales, service fees
Expenses	Cost of running the company	Software, freight, state fees

Keep the list short and use the same categories every month.

Owner transactions need their own accounts

For a foreign-owned single-member LLC, money the owner puts in and takes out are reportable transactions on Form 5472. Record them as owner contributions and owner withdrawals, in equity, never as sales or expenses. See our guide on inactive LLC tax returns for what counts.

Cash or accrual

Under the cash method, you report income in the year you receive it and generally deduct expenses in the year you pay them. Under the accrual method, you generally report income in the year you earn it and deduct expenses when you incur them, whether or not the money moved. The method is chosen when you file your first tax return: decide it with your tax professional. See our guide to U.S. business taxes for the rest.

GAAP and tax reporting

Tax returns are prepared under tax rules. GAAP, the Generally Accepted Accounting Principles, are standards for financial statements, and some lenders, investors or auditors ask for them. A small private company does not automatically need GAAP statements: ask your accountant which standard your case requires. [Probabile]

Sales tax in your books

Sales tax collected from customers is not income: it is a liability owed to a state. Record it in its own account and pay it on the state’s schedule. See sales tax for online sellers.

A monthly routine

Collect the statements of every bank account, card and payment platform.
Categorize each transaction into the chart of accounts.
Reconcile each account: the balance in your books must match the statement.
Review the reports: profit and loss, balance sheet and cash flow.
Store the documents behind every figure, and keep them for at least 3 years from filing, longer in specific cases.
Note questions for your accountant: unusual transfers, missing receipts, new income types.

Software

Accounting software helps if it is configured with a proper chart of accounts, connected to your bank feeds and reconciled every month. The software does not replace the review: a wrong category in the feed becomes a wrong figure in the return.

Controls that matter even for a small company

Keep company money in the company’s account.
Separate the person who records from the person who approves payments, when you have more than one person.
Keep a written explanation for every owner transfer.

What MyUSAService offers

MyUSAService bookkeeping costs $279 per month, and tax returns start from $951 for a single-member LLC or a C corporation. Prices as of September 2026.

Frequently asked questions

What is double-entry bookkeeping?

A system where every transaction is recorded in at least two accounts, as a debit and a credit, so the books balance.

Do I have to follow GAAP?

Tax returns follow tax rules. Some lenders and investors ask for GAAP statements. Ask your accountant which applies to you.

Should I use the cash or the accrual method?

Many small service businesses use cash. Inventory and larger sales can require accrual. It is set with your first return.

How do I record money I put into my LLC?

As an owner contribution, in equity. Never as sales.

How often should I do the bookkeeping?

Every month, with reconciliation. Waiting until tax time makes errors harder to find.

Want to set up your U.S. bookkeeping correctly?

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Sources

First published April 29, 2025. This article is general information, not tax advice for your situation. Bookkeeping and accounting | Book a free call