Bookkeeping always helps a business owner to better understand the progress made by the business. (David, 2015) On the other hand, financial statements are also important for every business for several reasons. The company's financial statements provide important information about its financial health. These statements are organized based on daily accounting that tracks funds flowing in and out of the business. The information provided by the statements offers benchmarks and feedback that helps the company make minor adjustments and also determine its overall direction. Financial statements are useful in making decisions regarding expansion and financing. They also factor into marketing decisions, providing data clarifying which aspects of the company's operations provide the best return on investment. (Gartenstein, 2015)The accounting cycle is a common practice in financial accounting that allows an organization to record and calculate its financial activities. The cycle consists of a number of steps, each of which depends on previous steps aimed at collecting data and organizing it in a meaningful way. Small businesses, lacking full-time accounting services, rely on the accounting cycle