An accounting system provides an organized method to track all of business activities generated by each transaction and provides the information required by taxing and regulatory authorities. The system used should accomplish the following:
1. Maintain a record of all business transactions.
2. Provide financial statements (Profit and loss statement, balance sheet, cash flow statement and key financial ratios) that show operating results and the company’s financial condition.
3. Protect the assets of the business from errors, fraud and carelessness.
4. Provide a basis for business planning by showing the results of past decisions and facts needed for future decisions.
5. Generate information that is periodically required by taxing and other regulatory authorities.
Developing a sound accounting system can mean more profits because it provides a tool to evaluate the performance of your business. If you would like more information on setting up an accounting system appropriate for your business contact Campanelli & Associates CPA LLC.
