If the general glossary of financial and accounting terms makes your palms sweaty, you may not want to hear about the “accounting circle”.
Unfortunately, the accounting circle is an important process to understand if you want your business to be successful and compliant with all necessary regula
tions, like tax.
To ensure your financials are accurate requires the on-going application of methodical rules and procedures when it comes to accounting practices.
Without even realising it, you are involved in the accounting circle in your small business to some degree each and every day – well, at least you should
It involves making journal entries, posting of transactions to the account it impacts, trial balances, adjustments, the preparation of financial statements and, finally, the closing of the books.
If you’ve had to prepare financial statements before you know what a massive relief it is to have accurate data at your fingertips and to see your books balance with ease.
So, what is the full circle of accounting?
Think of it this way. When something is deemed to have come full circle, it’s completed a cycle and has returned to the beginning; to as things were at the start.
Your financials work exactly the same because, in essence, an accounting circle starts when a transaction occurs and ends with its inclusion in your financial statements, and is started and completed within an accounting period.
It’s the process of accounting, recording, sorting and crediting payments you’ve made and which you’ve received within your business during a specific period. Once all the business accounts have been balanced, they are closed for that specific period and the accounting circle starts afresh for the new accounting period.
What is the full circle of accounting in your business? Have you taken a moment to assess how strong the circle is and whether it’s being fed with the right data?
Problems in the financial cycle will occur and it may never reach the desired end goal if you are not accurately recording your income and expenditure each day. This is where things can get very messy for small businesses, especially if the taxman is also breathing down your neck.
Accounting software systems, like QuickBooks desktop or QuickBooks online, are helping millions of small business owners all over world not only conquer their fear of all things financial, but greatly reduce human error associated with recording financials manually.
An automated accounting circle (we hear you breathe a sigh of relief) is the most reliable way of presenting a realistic picture of your business’s financial health and to ensure you’re legally compliant.
As the world’s number one accounting solution for small businesses, QuickBooks understands that accounting isn’t everyone’s forte. With the right support, you can leave the finances to the experts and get on with growing your business using the passion and skills which started it in the first place.
QuickBooks has 4.3 million customers globally who are enjoying the benefits of an automated accounting cycle. Let us help your business too.
Call 010 203 4300 or email email@example.com today.