Dual entry is another term for double-entry bookkeeping, the accounting system where every transaction is recorded in at least two accounts to maintain the accounting equation.
Dual entry (or double-entry) is the universally used bookkeeping system that ensures every transaction has equal and opposite effects on at least two accounts. The system maintains the fundamental accounting equation: Assets = Liabilities + Equity. When you make a sale on credit, two entries are created: a debit to accounts receivable (increasing assets) and a credit to revenue (increasing equity through retained earnings). When the customer pays, two more entries occur: a debit to cash (increasing one asset) and a credit to accounts receivable (decreasing another asset). This system is self-checking because total debits must always equal total credits. If they do not balance, an error exists somewhere. Modern accounting software like Xero handles dual entry automatically, creating both sides of every transaction behind the scenes. SortBooks ensures both sides of each entry are correctly categorised.
SortBooks helps with the bookkeeping behind dual entry by connecting to your Xero account and using AI to suggest the right account for transactions sitting in catch-all accounts, learning from your own past coding. Instead of fixing dual entry by hand, you review each suggestion, approve it, and SortBooks updates Xero, GST code included. Then ask the AI CFO about your numbers, using live Xero data.
Double-entry bookkeeping is a system where every transaction is recorded in at least two accounts - a debit and a credit - ensuring the accounting equation always balances.
In double-entry bookkeeping, a debit is an entry on the left side of an account. Debits increase assets and expenses but decrease liabilities, equity and revenue.
In double-entry bookkeeping, a credit is an entry on the right side of an account. Credits increase liabilities, equity and revenue but decrease assets and expenses.
The general ledger is the master record of all financial transactions in a business, organised by account. It forms the basis for preparing financial statements.
A trial balance is a report listing all general ledger accounts and their balances at a specific date. Total debits must equal total credits, confirming the books are mathematically balanced.
Connect Xero, check the AI's suggestions and approve the changes. SortBooks updates Xero for you.