The Accounting Cycle: The 12 Steps of Keeping the Books

Phase 1: Capturing the Day-to-Day (Steps 1-4)

This phase is all about recording what happens in the business as it occurs. 

Phase 2: End-of-Period Adjustments (Steps 5-8)

At the end of the month or year, you need to "clean up" and make sure all numbers are accurate before creating reports. 

Phase 3: Reporting and Resetting (Steps 9-12)

This final phase is about creating the official reports and getting the books ready for the next period.