Accounting Systems

Objectives of a Basic Accounting System
Keeping track of how your business is going is not difficult if you have in place a basic system.
Your accounting (or bookkeeping) system share the same 2 basic objectives.
These are:
  1. To keep track of all income and expenses and increase the chances of your business making a profit
  2. To collect all the necessary financial data from your accounts so that financial statements can be drawn up and a profit arrived at for taxation purposes.
The actual process of keeping your books involves 3 steps:
  1. Keep receipts or other acceptable documentation which confirms the receipts and payments of your business
  2. Make sure you summarise your income and expenditure for each period
  3. Complete summaries for your accountant or financial adviser so that financial statements and annual reports can be completed

Overview - Basic Accounting System

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