What is an accounting system ?
An accounting system is a workflow procedure that is employed in a business to organize financial information. It can be either manual or computerized.
Within the broader concept of accounting systems, we get smaller software systems such as :
Invoicing Systems [to handle all your sales invoicing needs],
Payroll Systems [to process the deductions and paychecks of your employees],
Inventory Systems [to keep track of merchandise items] and
Credit Card Point of Sale systems if you accept credit card payments.
If you use computers to do your bookkeeping, as a small business you most likely would end up using either spreadsheets or cloud accounting software such as Quickbooks, Xero, Wave, Sage etc.
Benefits of Maintaining an Accounting System
Using a good accounting system brings a lot of benefit to businesses. The first benefit is that it helps you to generate reports. Whether it is a profit report or a cash flow report, accounting systems help you to keep track of all your transactions which in turn will help you to make business decisions.
The second benefit is that it reduces errors that can be made with manual accounting systems and spreadsheets. The reason is that accounting software comes built with checks and prompts that help to ensure that your information is recorded accurately and the debits and credits balance out.
Thirdly, accounting systems are equipped to handle large volumes of data and can generate reports at any time.
Wave Accounting App
Wave is an accounting software package designed for small businesses. Its basic bookkeeping functions are free to use. Unfortunately, you will have to pay to use the payroll and credit card functions. As a small business owner on a tight budget, spending money on a bookkeeper or better quality software like Quickbooks in the beginning phase may be out of reach. However, Wave provides a good interim solution until your cash flow improves.
Wave Accounting app can be accessed at : www.waveapps.com
