The difference between the documentary cycle and the accounting cycle

The accounting cycle means recording all financial operations and events and posting them to access income, financial position and budget accounts, while the documentary cycle represents the set of documents prepared for the purpose of controlling all the accounts of the enterprise.

Amr Farag - • Internal Control

Facilitate asset management and cost centers. The difference between the documentary cycle and the accounting cycle: -

The accounting cycle does not differ from one establishment to another, regardless of the size of its work, as the accounting cycle means recording all financial operations and events and posting them to reach income, financial position and budget accounts, while the documentary cycle represents the set of documents that have been prepared for the purpose of controlling all the accounts of the establishment.

Through this, we can conclude that the documentary cycle is a way to ensure the correct result of the work of the accounting cycle, and it also represents a barrier to any gaps or defects that allow embezzlement or manipulation of the facility's funds, and therefore the documentary cycle plays a large and important role within the facility and is different from the accounting cycle, and below we will address the documentary accounting cycle, its explanation and forms.

What is a documentary course?

It represents the first stage of the accounting cycle and means the sum of documents, records and papers related to the company's accounts and its itinerary within the vessels of the establishment from the beginning of its registration until the completion of its posting and ensuring the integrity of each statement in it, and the accounting documentary cycle is the main source for recording arithmetic operations where the financial statements and final reports are built on them.

The separation of the procurement and warehouse departments leads to the loss of the company's assets, and the more correlation between them, the greater the control of the company's assets.

Link a video to explain the difference between the documentary cycle and the accounting cycle ( click here )

The importance of the documentary cycle :-

Documents are the first proof that the entity is carrying out financial operations.

Investors, government agencies and all those dealing with the facility have their first argument is documents, and they cannot base their dealings with the facility on gossip and oral conversations.

Business owners and companies leave financial matters to an accounting firm or chartered accountant, and what proves his work is the documents.

The documents represent the first guide to the work of the internal auditor, as he reviews all accounts, cash, expenses, etc. and ensures that they are properly recorded in documents.

Financial statements and tax returns depend in their creation on the accounting document.

Types of documentary cycle :-

The documentary cycle varies from one company to another, and the Egyptian Certified Public Accountants Office provides different services to prepare a general accounting program that helps your company manage the documentary cycle of various types, for example, the documentary cycle for real estate investment companies needs a general accounting program such as the real estate investment program, which takes into account the registration of advance payments, the costs of operations, works under implementation, and others.

Documentary cycle for warehouses :-

What is the documentary cycle of stores?, It means the movement of documents for all goods and materials leaving and entering to and from the warehouses from the beginning of receiving the goods until the final inventory work, and it is considered the first step of the accounting documentary cycle.

Among the elements related to the documentary cycle of warehouses :-

Minutes of inspection and receipt of goods.

Exchange permissions for products.

Return permissions from products sold.

Item cards.

What services will our warehouse management program provide?

Record entries directly in the journal.

Immediate posting to the ledger.

Make a balance for review before and after settlement.

Preparing the result statements (income statement and financial position).

Warehouse management software provides periodic and real-time reports.

Documentary cycle forms for warehouses :-

Of course, the documentary cycle of stores will vary according to the company's activity and the size of its operations, and examples of warehouse documentary cycle models are:

Documentary Cycle for Procurement :-

It consists of purchase orders, quotations, purchase or supply order, purchase invoices, acknowledgments of receipt of goods from suppliers, cash disbursement permits from the facility to suppliers, and to achieve the greatest benefit, you can use the electronic invoice program through our office.

Sales documentary cycle :-

These include price requests from the customer to the company, offers issued by the company, sales and supply orders, sales invoices from the company to customers, goods disbursement permits to customers, and cash receipts from the company to customers.

Documentary cycle for customer accounts :-

It means the movement of documents related to each customer and each process in which he deals with the facility, including sales, exchange permits for them, invoices, collection receipts from them, and others, and the documentary cycle of customer accounts varies according to the size and type of activity.

The documentary cycle of customer accounts is also aligned with what we offer in human resources software and customer management software CRM, and customer management CRM is a tool or a complete program that companies currently follow to improve the management of relationships with their existing customers.

Why is CRM software important?

· Increase the number of potential new customers.

· Closer relationships with old customers.

· Collect and organize all possible information about your customers and employ it to suit your business and the nature of your products.

· Determine which services or products are best for the customer and present them in the best form.

Accounting cycle :-

The accounting cycle can be defined as the policies and laws followed by the company to record its financial operations, from recording, numbering, analysis, summarizing and posting to benefit from them in accessing the design of reports and financial statements of the company to know the result of the company's business, and it is implemented by a chartered accountant or accounting office with which the company deals.

When to prepare the accounting cycle?

The full accounting cycle is prepared from the beginning of the financial period and once the financial operations occur, where all transactions carried out by the company during the period are recorded and then the financial statements are prepared at the end of the period based on the operations that have been made, and the steps of the accounting cycle vary from one company to another, but it is customary to start on 1/7 and end 31/6 the following year.

What are the stages of the accounting cycle?

The accounting cycle begins with the occurrence of financial operations in the company during the financial period and the analysis and recording in the journal.

Post all registered transaction entries to the general ledger.

Aggregate the total balances of all accounts to make the trial balance.

Make final adjustments for the financial period.

Create the trial balance after adjustments.

At the end of the accounting cycle, financial statements such as the statement of financial position, statement of cash flows, net profit, issuance of final reports, closing and rotating accounts are made.

How to record accounting entries :-

To record the daily entries, it is necessary to first list all the company's assets and liabilities.

Verifying the ownership documents of the company's current and non-current assets.

If the company is not committed to records, it must be prepared for contingent liability situations such as tax liabilities, suppliers, etc.

Double entry is used as a method of recording accounting operations.

Each financial transaction is posted from one account to another.

The parties related to the registration of accounting entries are the debtor, the creditor, the statement, the cost center, the entry number, the date and the professor's page number.

All accounting entries are posted to the general ledger, which is the ledger that is responsible for recording the permanent entries.

Activation process example :-

Journal form

The journal plays a very important role in the accounting cycle, as all stages of the accounting cycle are based on the accounting entries recorded in the journal, and the journal form is made manually or via Excel or general accounts program.

The journal form consists of main columns:

· Registration number.

· Date.

· Statement.

· Registration (debit - creditor).

· Amount (debit - credit).

The Egyptian Certified Public Accountants accounting firm provides a public accounts program based on the latest technological tools that help facilitate the stages of the accounting cycle and the documentary cycle to the maximum extent.

What features does the General Accounts Program provide?

· Make an electronic invoice.

· Create a journal and record and post accounting entries automatically.

· Supports the feature of importing your accounting data from Excel.

· It offers several programs in one program:

· Calculation software.

· Warehouse management software.

· CRM customer management.

· Accounting software for manufacturing.

· Human Resources Program.

· Create a chart of accounts with unlimited levels.

· Facilitate the management of your company and its branches.


· Periodic reports, fixed assets reports, trial balance, financial statements and ledger accounts.

· Our experts also provide tax advice, legal advice, internal audit services, external audit, production planning services and all accounting services.

(For our services click here)

(To order a free demo from the program or to know the price, click here)

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