Double Entry and Accounting Cycle

Your Accounting System Monitors Periodically these areas:
A good accounting system allows you to extract correct information to help you monitor on a daily, weekly or monthly basis various areas of your business. 

Each Day

  1. Balance of the cash you have in your bank account.
  2. Balance of cash that you have on hand.
  3. A daily summary of all your sales and income received.
  4. A daily summary of all your expenses and monies paid out.
  5. Other daily matters that require attention.

Each Week

  1. Details of people that owe you money for sales you have made to them on credit (accounts receivable).
  2. Details of people that you owe money to for purchases you have made on credit (accounts payable).
  3. Details of your staff and payroll.
  4. Details of the taxes due by your business and the Fed Income Tax and Sales Tax that is due to the IRS.

Each Month

  1. Details information extracted from your accounting system so that monthly financial reports and accounts can be prepared by your accountant.
  2. Receive copies of your profit and loss accounts and balance sheets for the month.
  3. Review your balance sheet for the month so that you can see what the assets and liabilities are.
  4. Reconcile your bank account by doing a full Bank Reconciliation.
  5. Balance your petty cash.
  6. Review various positions of the business especially as regards its accounts receivable to ensure that debt collection is not slow and that bad debts do not arise.