Follow the elements of building the system - the documentary cycle | ECPA

At the moment, every company owner needs to register any financial event and information that his company is going through, especially if he has investors or contributing partners with him. Therefore, he has to work on developing a system that accurately shows the company’s property and business itinerary and processing it to obtain accounting information or building an integrated accounting system.

Accounting work depends on accounting documents and documents. Hence, the documentary cycle plays a vital role in the accounting cycle. Still, when building an integrated accounting system, you should pay attention that the accounting cycle is different from the documentary cycle. For example, the accounting cycle relates to the duties of an accountant within the company, while the cycle The documentary relates to the papers and records used by the accountant.

We can learn about the difference by reading the following article

The accounting cycle relates to the work and functions of the accountant within the company and includes

Journal restrictions are posted daily to the American Journal, which has the task of collecting all annual balances of different customers, accounts, banks, and others.

Daily posting of the assistant ledger is a detailed statement for each account.

We are preparing the trial balance with the totals and balances of the Assistant Ledger and American Journal accounts.

Preparing financial statements, closing restrictions, and opening restrictions. This task shall be attributed to the financial director or head of accounts.

Automation of the documentary cycle helps to make the right decision at the righttime

In a previous article, we said that building an integrated accounting system is based on three main processes

Registration of all property and assets owned by the company and all liabilities of the company

It is creating an accounting guide means accounting for all company accounts and recording all transactions. A comprehensive inventory is made, and all that has been reached is recorded.

The final step is to create the documentary cycle, which means collecting all the company’s financial information, recording it in documents, and archiving and storing the previous information

One of the most critical stages when building an integrated accounting system is the chart of accounts or account directory. It means recording all accounts related to the company’s business, such as accounts of assets, liabilities, equity, and income expenses. Then, each account is divided into sub-accounts, and each sub-account includes sub-accounts and so on

The design of the chart of account varies depending on the nature of the tree’s work and the size of its business. For example, the asset account includes non-current and current assets accounts. The liability account is divided into long-term and current liabilities, and the current assets account is divided into the customer account. Cash account Inventory is divided into other accounts, such as the customer account, which is divided into external customer accounts, wholesale and retail customers. Each customer has a unique account and so on

The path of documents within the company, from the beginning of writing accounting information and making restrictions, means accounting, financial statements, and various accounts such as the professor’s account, the audit balance, and the list of cash flows. The documentary cycle also includes ensuring accuracy when writing any statement and the validity of the posting and error-free

The documentary cycle aims to control all the company’s funds and property.

It also monitors all administrative matters in it.

Its main task is to collect, record and summarize all data in reports submitted to management

According to current data, records, documents, and reports help management make appropriate financial and administrative decisions

It is considered a means of communication between different departments within the company

A key partner in setting the company’s annual goals

The main objective of the documentary cycle is to grow the company and raise its market value

Detect errors and immediately correct them

The well-known documentary cycle forms are divided into several types, and each type falls under subtypes. The documentary cycles used within the company vary according to the size and requirements of each company, but three main types are not without documentary cycle forms, namely

It means all documents related to the company's purchases, whether goods, manufacturing materials, machinery, furniture, stationery, etc. It also includes purchase orders, copies of invoices, and all emergency purchases that are not planned to be purchased and registered immediately

It means all documents about goods held within the company's stores, including documents of their purchase, sale, import, export, disbursement, etc

All sales documents carried out by the company during the fiscal year, including goods and services provided, purchase orders received, quotations, lists of goods ordered in the market, customers' opinions, and others Other types include the documentary cycle of the fund and cash, the expense documentary cycle, the revenue documentary cycle, and others

There are several differences between them, such as :

In the tradition was considered impossible except by in the traditional system reprinting again. In the modern system, you can edit easily.

In the traditional cycle, all the company and the customer data recorded were printed. In the modern system, you can show only the information related to the transaction

in the traditional system, registration required several people to register, review and approve. In the modern system, one person is charged for the task and can be modified and replaced according to the director's desire Many differences have led business owners to use the modern documentary cycle, which mainly contributes to building an integrated accounting system

The writing was done manually, reviewed, and approved in the traditional system. In an integrated and modern accounting system, it is written directly on the computer screen and sent for approval, and then printed directly

The design of the accounting system differs from one company to another. Small companies and projects do not need this integrated accounting system in the literal sense based on creating an income statement, financial statements, budget, etc... Still, they will often need only one chartered accountant to prepare invoices, inventory the store, account for cash, tax, and other simple operations.

As for large companies that need real work, accounts and lists have complete financial management and a team of accountants for each specialty. Therefore, creating and designing an accounting system for them is somewhat complicated. In general, any accounting program depends on four main axes from which an opening balance can be drawn To review and then establish an integrated accounting system, namely

liabilities

In all cases, depending on the nature of your work, you will need a specialized chartered accountant or one of the accounting offices. Of cycle, I recommend to you with confidence the “ECA” office, one of the most prominent accounting offices in Egypt and the Arab world, which has an integrated team of consultants and certified accounting specialists. They pledge By working 24 years to reach your company to the best profitability and the highest possible economic security

We are designing an integrated accounting system compatible with the nature and size of your business

Carefully study the nature of your activity, financial market, and company's internal structure

We are preparing the chart of accounts based on the analysis of an integrated accounting system and drawing the chart of the accounting tree.

Formation of the documentary cycle by the laws and rules and taking into account the separation of tasks of each department

We are designing the best accounting program for your company

taking an actual inventory of the company's assets and property

Review all registered accounts and balances and ensure the integrity of registration

They establish the trial balance, cash flow list, financial statements, and financial position list and make the necessary adjustments

Our team will establish an integrated and comprehensive accounting system if your company follows a prior accounting system or has not followed it before

Ensure the daily registration of transactions and ensure the validity of the documentary cycle

Follow up on the internal audit and control work

Calculate different types of taxes and exploit tax opportunities to the maximum extent

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