Most of the successful companies today have a good accounting system, this means that, in order for the company to perform well, any transaction should recorded, and reported for it to be analyzed for financial transaction. This is important because, it helps the company to ascertain the results in terms of profit or loss, thus it provides the information about financial position of a company. An income statement also helps the owner of a company relating to what a company owns in form of assets and what it owes inform of liability at a particular time. Managers can also know if the company is directed as it should be, also accounting is needed because it helps the investors to find out the future prospect of the company, workers and customers also can know a position and condition of a company, accounting also can be very useful in planning, controlling and decision making process. Good accounting system is time efficient and accurate, thus the staff can use less time in finding data, because good accounting system provide timely and accurate data, managers can identify and reduce cost and add margin to their places of work. Accounting system also provides a company with security, this means that, the information of a company cannot be accessed by unauthorized people, with good accounting system, the information that a company has is meaningful an accurate. Good accounting system is flexible and can respond quickly to changes in a company environment; this will allow the owner of a company to respond to rapid business changes, and thus helping the owner to maintain the hierarchy of a business.
Through its creation of an organized structure of task allocation for financial management, accounting will keep track of all the profits and expenditure of a company, reports are compiled for a specific period of time, usually a month, then it can be reviewed for the