The building blocks of financial accounting. In it’s purist sense it is a series of debits and credits reported in various general ledger accounts. A proper double entry bookkeeping system is essential for all businesses who require annual financial statements. The benefits of having a proper bookkeeping system are in the accuracy of the financial reporting. A sole proprietorship does not technically require a double entry bookkeeping system but may choose to employ one for internal control purposes. For example, a proper bookkeeping system reconciles the banking records to the accounting records to avoid double entries, missing entries and transpositions.