Navigating the financial landscape can be a challenge, especially if you’re setting up your first startup or running a small business. Among the many tasks that demand your attention, understanding and managing the accounting cycle stands out as critical and necessary.
This cyclical process involves identifying, recording, analyzing, and reporting your company’s monetary transactions in a systematic manner. In this guide, we’ll unravel its intricacies.
What is the Accounting Cycle?
The accounting cycle is a series of steps that businesses follow to record financial transactions and create accurate, reliable financial statements. Your recording requirements will determine the length of your accounting cycle, but most cycles will go through the same simple steps.