What Is Full Cycle Accounting? And Why SMEs Should Hire Professional Accountants

What Is Full Cycle Accounting? And Why SMEs Should Hire Professional Accountants

Small and medium enterprises (SMEs) usually fail because of the inefficient accounting cycle. While there can be many reasons behind a disrupted accounting cycle, you’ll always require professional insight and quick response to ensure a streamlined inflow and outflow of cash.

If you want to keep your cash flow issues from affecting your business growth and revenues, consider hiring a full-cycle accounting service in Edmonton. Before we get to their benefits for your small or medium scale business, let’s first look at what’s a full cycle accounting and the steps included in it.

What’s a Full Cycle of Accounting?

A full accounting cycle refers to every activity involved in carrying out necessary business transactions and developing financial statements. It can be broken down into the following steps:

  1. Recording purchases, payment receipts and other accounting transactions as journal entries in specified sub-ledgers.
  2. Approving all journal entries and recording them on a general ledger.
  3. Preparing T-accounts to find out the unadjusted trial balance. These accounts show all the accounting transactions conducted during an accounting period.
  4. Recording depreciation expense, expense accruals, deferred revenues, and other adjusting journal entries.
  5. Preparing the income statement, balance sheet, cash flow statement, and other financial statements.
  6. Posting temporary account balances of the current accounting period to the income summary to nullify the balances.
  7. Preparing a closing trial balance sheet after the temporary accounts have been closed.

Benefits of Hiring Professional Accountants for Your SME

A professional accountant recording financial statements in an SME.

Here are some reasons why you should consider hiring an accounting firm for your small or medium-sized business in Edmonton.

  • Help businesses manage their cash flows efficiently.
  • Help businesses stay compliant with tax obligations with their experience and updated knowledge of tax legislation.
  • Keep businesses informed of their financial situations and help them track their performance metrics over time to make informed decisions.
  • Keep businesses from growing in the wrong direction and optimize their growth potential.
  • Prevent companies from making mistakes that may cost them in the long run.

And these are only a handful of all the benefits that a professional accountant can bring to your SME.

If you are looking for professional and reliable accounting firms in Edmonton, get in touch with Duggal Professional Corporation. It is one of Edmonton’s leading accounting companies that offers specialized accounting solutions to help businesses maintain smooth accounting cycles. Call them at +1 780 863 2224 to get started today!

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