Accounting Cycle Step 4: Trial Balance

Discusses step 4 of the Accounting Cycle, creating a trial balance, and its relationship to the general ledger before it and reporting processes after it. If you’re interested in a more in depth look, have a look at the accompanying textbook Balancing Act: A Practical Approach to Business Event Based Insights, available for download. Specifically, look at Chapter 5, Accounting. Change in Frequency Steps 1 – 3 … Continue reading Accounting Cycle Step 4: Trial Balance

The Value of Data Part 2: The Data Supply Chain

In the previous post, The Value of Data Part 1: Business Functionality I discussed the costly process of capturing attributes of business events, and the value in understanding them over time. In this post I’ll discuss various types of business events and their potential impact and use in financial and analytical processes. Data Supply Chain Defined A data supply chain is defined as a process … Continue reading The Value of Data Part 2: The Data Supply Chain

The Value of Data Part 1: Business Functionality

Optimizations verses Functionality An expert recently said to me that the most important optimizations of systems need to be identified at the appropriate time. Trying to identify and create them too early can affect the design of the system, negatively impacting functionality and flexibility. In other words, the optimization can become more important than the functionality, compromising the over results of the system design. I … Continue reading The Value of Data Part 1: Business Functionality

Accounting Cycle Step 3: Post to Ledger

This week’s post discusses step 3 of the Accounting Cycle, posting to the general ledger, the nature of roll forward balances and accounting periods. If you’re interested in a more in depth look, have a look at the accompanying textbook Balancing Act: A Practical Approach to Business Event Based Insights, available for download. Specifically, look at Chapter 5, Accounting. 3 Books of Bookkeeping Historically, there were three … Continue reading Accounting Cycle Step 3: Post to Ledger

Accounting Cycle Step 2: Create Journal Entries

Discusses step 2 of the Accounting Cycle, creating journal entries, the “flow” of data through accounting, and the purpose of debits and credits. If you’re interested in a more in depth look, have a look at the accompanying textbook Balancing Act: A Practical Approach to Business Event Based Insights, available for download. Specifically, look at Chapter 5, Accounting. Flow of Data Bookkeeping is a very sophisticated (even … Continue reading Accounting Cycle Step 2: Create Journal Entries

Accounting Cycle Step 1: Execute Business Events

This week we discuss step 1 of the Accounting Cycle, executing business events, and the relationship to financial transactions and the world of measurement. If you’re interested in a more in depth look, have a look at the accompanying textbook Balancing Act: A Practical Approach to Business Event Based Insights, available for download. Specifically, look at Chapter 5, Accounting. What’s a Business Event Business Events are broader … Continue reading Accounting Cycle Step 1: Execute Business Events

Introduction to the Accounting Cycle

This week’s post introduces the accounting cycle. Creating a single balance sheet as of today, or an income statement that reflects one’s activity over the week is not too difficult to do. But financial reporting is most powerful when it allows us to analyze things over time, efficiently, spotting trends and comparing periods. Doing this requires a process, and that’s what the accounting cycle is. … Continue reading Introduction to the Accounting Cycle