What is a bookkeeping system?

While today's bookkeeping system is mostly electronic and some tasks can be automated. A bookkeeping or accounting system does not start and end with accounting software. 

Your bookkeeping system should fulfil all your statutory reporting requirements and by nature produce a clear audit trail for all documents and records. Used consistently a bookkeeping or accounting system can minimize errors, streamline operations, and forms the basis of all financial and management reporting.

Every business is required by law to 'keep books' in order to substantiate its claims and obligations under the taxation act and/or corporations law. Keeping the books also produces accurate management reports which are critical to good business decision making

A properly controlled accounting system encompasses all source documents, records, procedures and methods used to collect, record, classify, summarize, analyse and interpret information about financial transactions. It will therefore provide the framework to transform transactions and other forms of data into vital management information.

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.

Integrity of the data is a fundamental requirement of an accounting system. Regular review of main controls to avoid problems and capitalize on opportunities.