What are Generally Accepted Accounting Principles (GAAP)?

Generally accepted accounting principles (GAAP) are a set of established accounting rules and standards. Private companies aren’t required to use GAAP, but as your company grows, getting closer to GAAP compliance is important. 

Keeping your books GAAP-compliant can be difficult without an experienced accountant or accounting firm’s help, and many startups don’t follow GAAP standards at the start. But implementing some of the preferred rules early on, such as using double-entry bookkeeping and accrual-based accounting, can make the transition easier.