Every business based in the United States of America must file a tax return every year to the Inland Revenue Service (IRS). In Canada businesses must file yearly to Revenue Canada.
Businesses that collect sales tax must be prepared to defend the amounts that they submit to their local and State or Provincial Governments. Businesses that have employees must submit payroll withholding taxes and deductions to the Government. In order to file correct yearly tax returns and be able to defend the amounts submitted as withholding and sales taxes a business must keep reasonably detailed accounting records of its sales and expenses.
There are no laws that define what format that these detailed records must be maintained in. If however, you want to be able to justify and pass an audit the best method of accounting is to utilize a ledger or group of ledgers and in this day and age the most convenient ledgers are contained in software packages that run on a personal computer.
There are numerous small business accounting software packages available from your local computer or office supply retailer. Most bookkeeping packages have added features such as the ability to do payroll and inventory. I suggest that you allow your accountant to recommend which package will be best for you. Choosing a software package that is familiar to your accountant should save you costs when you have him prepare your yearend tax returns.
If you are acquiring a business that currently utilizes an accounting software package I recommend that you verify that the version that is being utilized is the most current and contains the latest updates and releases and is legally licensed for use by the business.
If you are uncomfortable or really do not have the time available to do your own bookkeeping, no matter where you live and operate your business you will be able to find bookkeepers who can be contracted to do your work on a part time basis.
If you need some additional education on basic accounting there are literally hundreds of self-help books available. Many community colleges offer evening and weekend tutorials and courses covering financial accounting for small businesses.