The main and most well known reason for an accounting system is so that the company has a record of all revenue and expenses for the company. This information is used in typical ways such as providing reports to investors and creditors. Anyone that is doing business with the company will want to know the financial state that it is in. Shareholders will also be interested in knowing the bottom line after all of the expenses have been paid.
With this system in place it becomes easier to make bigger decisions in the company. Hiring and firing, purchases, sales, investments, mergers and more can all be affected by the financial state of the company at the time. The data that is produced by the accounting system will let the right people know what major decisions need to be made and which ones need to be avoided.
A viable accounting system is also an excellent way for a business to keep track of employees and monitor their habits to ensure they are on track with the goals of the company. It is a system of checks and balances.