What is a bookkeeping system?
Not just software!
A bookkeeping system consists of all the source documents, records, procedures, staff and all the data processing methods used to transform transactions and other forms of data into vital management information.
A bookkeeping system therefore provides the framework to collect, record, classify, summarize, analyse and interpret information about financial transactions.
10 Key Objectives of a Bookkeeping System
A great bookkeeping or accounting system encompasses the following key objectives:
- That all cash flows are properly accounted for
- That all statutory reporting requirements are met,
- Relevant and current information for monitoring operations is produced,
- On-going controls of operations are maintained,
- Sufficient checks and balances are introduced to avoid the potential for errors and impropriety,
- Reliable historical information is gathered to assist in management decision making,
- Management information is gathered on a regular basis using accounting periods,
- That a current and functional budget is maintained,
- That there is a clear audit trail for all documents and records in and out of the business.
Used consistently the system can minimize errors, streamline operations, and forms the basis of all financial and management reporting.