By adding accounts (or categories like income, expense, assets, liability and equity), Open automatically categorizes the transactions and helps manage bookkeeping seamlessly. This further helps in generating reports as per the particular categorizations.
Income: Income is referred to as the revenue that your business earns. This could be from the sale of products or services.
Expense: Expenses are referred to as the revenue that your business spends. You can manually add an expense by following these steps:
Assets: Assets are things of value that your business owns. An asset can be something tangible like cash, bank accounts, property, or a piece of equipment. Or it can be something intangible, like intellectual property or goodwill. Including the money your business is owed by customers for products or services you've provided are part of assets.
Liability: Liabilities are funds your business owes to other parties — in other words, debt. Credit card balances, business loans, line of credit or outstanding bills/ sales tax due to the government are all examples of common business liabilities.
Equity: Equity represents the difference between your assets or liabilities and helps measure the net worth of your business. In other words, equity is what would be left over if you sold all your business assets and paid all your debt.