The Five Stages of Bookkeeping

Bookkeeping Services in Cincinnati. These five stages ensure that a company’s financial activities are accurately tracked, categorized, and ready for final reporting.

1. Identifying and Recording Transactions

This is the starting point of the cycle. Every financial event the business engages in—such as a sale, a purchase, paying a bill, or receiving cash—must be documented.

Action: Collect and review source documents (like receipts, invoices, and bank statements).

Method: The transaction is recorded chronologically in the Journal (the book of original entry) using the double-entry bookkeeping system, ensuring every transaction has an equal and opposite effect (a debit and a credit).