To those unfamiliar with accounting, it may seem like a very complex world full of complicated numerical data and processes. Most accountants however, organize their work in different phases to ensure they cover all possible avenues and carry out a professional and efficient service for their client.
The phases of accounting include:
- Identify the financial transactions
The initial stage of the accounting process includes creating supporting documents for financial transactions that have taken place. These documents may take the form of vouchers and will include information regarding the transaction including the date, value and the account it was paid in to or out of.
Using the information collated on the vouchers, the accountant will then transfer this information in to a book of accounts where other information about the company's transactions will be recorded in the form of journal entries.
- Classifying journal entries
The information recorded will be divided up under different headings. For instance, each set of information about one transaction will fall under two accounts or two records.
- Presenting financial statements
An accountant will usually find themselves doing the accounts for a company that needs to create statements to send out to suppliers or other business clients. Part of their job will be to create and summarize these statements in order to then create a Trial of Balance. This balanced information is then used to help a company balance its books before the end of the financial year. In addition, this will also include recording any profits or losses.
