An accounting system allows you to record financial information.
Accounting system is a notion that can be understood in different ways. In its broadest sense, it is the set of elements that record financial information and the interrelationships of this data . This structure, due to its characteristics, contributes to decision making in the management field.
It should be noted that a system is an ordered module of components that interact with each other and are interrelated. The idea of accountant , for its part, refers to that linked to accounting (the method that allows the accounts of an organization to be kept).
Objectives of an accounting system
Accounting systems are made up of various types of documents and involve the participation of specialists ( accountants ) who are responsible for the accurate recording and analysis of information . Accountants often work closely with managers or company decision makers.
The main objectives of an accounting system are the following:
- Record of financial activity , which must be up to date and must be reflected in the document established for this purpose.
- Classification of information into groups and categories so that it can be studied, analyzed and used in the most appropriate way possible.
- Summary of all the accounting information of the company in question, so that it can be taken into account by the people who are in charge of the entity.
A spreadsheet can be used as an accounting system.
Other features
In addition to everything stated above, it is important to know other relevant data regarding any accounting system that are considered fundamental:
- It must be a well-designed, understandable and comprehensive system.
- If done correctly, it will allow complete control of the company's accounting while facilitating decision-making that is appropriate at all times.
- There are many and varied objectives that are attempted to be achieved when creating an accounting system. However, among them the following stand out: predicting cash flows, exercising control over the operations of the company in question, supporting administrators in their functions, helping to prepare statistics, facilitating decision-making regarding new projects and business directions…
- In order for it to be of great use to those in charge of the entity, it is established that it is essential that every accounting system be understandable, neutral and fully verifiable.
The accounting system as software
Currently, the concept of accounting system is usually associated with the computer program that allows information to be recorded. The accounting software has different modules so that a company can keep its books and balance sheets digitally and with tools that facilitate calculations.
It is even possible to create a basic accounting system in a spreadsheet . Thus it is possible to record the financial income and expenses of a family, allocating a sheet for the current month. The movements of the period, in turn, can be automatically reflected in another sheet where the family 's savings are increased or reduced. As you can see, the spreadsheet works as an accounting system.