The Accounting Process – What You Need To Know
Accounting has a lot of complexities which is why it is a job that is best left to the professionals rather than delving into it and just brewing up a headache. If you own a business, knowing the process of accounting may be beneficial because you basically know what is going on. While you may not exactly put your time into it, knowing some of the steps involved can give you enlightenment in what seems like a very perplexing form of mathematics.
The very first process involved in accounting is the documenting and recording of entries whenever there is a transaction involved. Whether this is cash, debit, or credit type of transaction, it needs to be recorded. All the inflow and outflow or money must be taken note of so as to keep track of all the money involved in the business. Failure to keep note of a single entry means missing money in the monthly audit.
Financial statements are tallied each month, every quarter, and at the end of the year. This tallying of financial statements is basically the auditing part of the business. The journal will involve a long line of entries and all of these entries have to coincide with the final amount and there should be no missing part, not even a single dollar.
The accounting will be further simplified inside a ledger and spreadsheet software like Excel. There will be a computation of everything and that there will be trial balance that will be made over the different accounts. The trial balance will include assets, equities, and liabilities. Trial balance is not a fixed amount but more like a rough accounting of the overall revenue of the business within a particular financial period. Once a particular financial period has been completed, a new accounting cycle will be opened.
Accounting can be very tricky. Unless you are an accountant yourself, this type of job should be given to those who specialize in it. Hiring the services of accountants from the many accounting companies Calgary has is recommended. Accounting companies can provide personal accountant Calgary or corporate accountant Calgary services. Hiring an accountant will be in your best interest as not only do they provide numerous services that your business will find very useful, but they can also provide consultations and invaluable advices that can help make your business venture more successful.