A good accounting system for recording and summarizing the business and financial transactions of a business is essential for all businesses.
The accounting system is based on standardized accounting principles. The accounting system quantifies information about the finances of a business and includes recording, measuring, reporting and describing financial information.
Financial reports are used by management and include accounts receivable, accounts payable, profit and loss statement, cash flow and business balance sheet.
Other financial reports can include sales tax reporting, income taxes, depreciation, payroll, payroll taxes, and checkbook reconciliation.
It is important to have a good accounting system that meets the needs of your business but also one provides the proper information to taxing authorities, lenders or investors.