Every business needs an effective accounting system. Many business owners overlook the logical method of tracking their revenues and expenses by “profit centers.” A financial reporting system should be set up such that it has the ability to generate reports that provide a breakdown of revenues and expenses by type of service provided or type of product sold.
Once an effective accounting system is established, it serves as the foundation of your practice, tracking the financial health of a business so it can grow and change as it needs to.
To be effective, there are four basic requirements an accounting system must meet:
– Be simple to use and easy to understand.
– Maintain relevant and accurate records.
– Ensure that records are kept current.
– Keep records that exhibit consistent standards and principles.
As you consider implementing an accounting system, be sure it allows you to perform all these functions to best support your business. A strong financial management system is the cornerstone of any prosperous business. Stonehenge Accounting has successfully set up this software in many small businesses across Toronto, and the yields and benefits have been incredible.