Accounting System 




Why Do Businesses Need An Accounting System? 




Accounting: A Communication Vehicle 

Managerial Accounting & Financial Accounting

Accounting is the systematic recording, classifying, reporting, and analyzing of financial transactions of a business. It is a vehicle for communicating financial information of a business entity to many different groups of people. The communication is generally in the form of financial statements.

Accounting that provides financial information to people inside the business entity, such as managers, owner and auditors, is called management accounting or managerial accounting. Management accounting allows interpretation and analysis on the financial performance of the business in order to mainly provide a basis for making management, financial, or operating decisions. Read more "Accounting: A Communication Vehicle"

Bookkeeping System

Bookkeeping is a process of recording, classifying, and summarizing of such day-to-day financial transactions as sales and purchases, into a usable form that provides financial information about a business or an individual. It's a part of overall account system.

Sound bookkeeping practice is a prerequisite to complete a full accounting cycle. Using the trial balance and ledgers prepared in the bookkeeping process, a bookkeeper or an accountant prepares financial statements, which are used to analyze the organization financial performance, as well as to file tax forms with government agencies. 

A bookkeeping system is a set of rules for recording financial information in an accounting system. There are two common methods of bookkeeping systems, which are the single-entry bookkeeping system and the double-entry bookkeeping system. A business owner must decide what bookkeeping system to be used. Read more "Bookkeeping System"

Accounting Methods 

Is cash or accrual accounting better for your business?

Bookkeeping methods: Accrual vs. Cash Accounting




Why Do Businesses Need to Accurate Bookkeeping?

Bookkeeping is the process of keeping full, accurate, up-to-date business records. It involves making a record of the monies received by a business as well as the monies paid out. Bookkeeping covers money a company owes to vendors, employees, tax agencies, contractors, lenders, and any other individual or entity. Equally, accurate records of amounts owed to a company by outside individuals and organizations are also recorded in a company's books. 

The job of bookkeeping can be very time consuming. With no exceptions, every monetary amount that is paid or received must be recorded. Additionally, accuracy is of the supreme importance, making keeping the books in a quick manner a very bad idea. As business owners are often lacking in time, many choose to hire bookkeepers to keep company records well maintained.

Certainly bookkeeping is necessary and beneficial to business owners. Proper bookkeeping can help businesses effectively manage cash flow, stay well-informed on company performance, and develop plans for the future. Moreover, accurate bookkeeping is required by both federal and local tax agencies. Read more "Why Do Businesses Need to Accurate Bookkeeping?"

Accruals and Deferrals

In order to comply with the revenue recognition and matching principles, revenues and expenses have to be reported in the time period in which they are earned or incurred. Accruals and deferrals are instrumental in helping this proper reporting of revenues and expenses happen. Accruals and deferrals require adjusting entries at the end of the accounting period.


Under the accruals, conditions are satisfied to record a revenue or expense, but money has not changed hands yet. An accrual occurs before a payment or receipt.

Under the deferrals, money has changed hands, but conditions are not yet satisfied to record a revenue or expense. A deferral occurs after a payment or receipt. Read more "Accruals and Deferrals"

End of Financial Year Guide

Closing the accounting year and beginning a new one


The most common tasks to close business year include:

  • Reconciling Balance Sheet Accounts
  • Entering Year-end Accounting Adjustments
  • Closing the Books
  • Sending Customer Statements
  • Reporting for Year-End
  • Preparing 1099 & 1096 Forms
  • Consulting Your Accountant
  • Distributing Profits
  • Paying Sales Tax
  • Budgeting for Next Year

You may need your accountant's or bookkeeper's assistance to perform the activities if you think they put extra burden on your daily business routine. Read more "End of Financial Year Guide"