Maintaining a set of accounting records is not optional, it's a law! The Internal Revenue Service (IRS) requires that businesses prepare and retain a set of records and documents that can be audited. Internal Revenue Code requires that business have the ability to compute taxable income by using some sort of common-sense accounting system that clearly reflects income. In addition, the federal legislation requires public companies to have a detail and accurate books, records, and accounts of transactions and dispositions of the assets.
Beyond complying with the law, a company that fails to keep an accurate record of its business transactions may lose revenue and is more likely to operate inefficiently. You can’t successfully manage your business without the accounting system. Success requires the ability to perform financial analysis, which is to accurately measure business growth, profitability, and cash flow, as well as to reasonably estimate your financial condition.
Read full source article at accounting.pettir.com
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