In the general point of view, an accounting cycle refers to certain procedures that must be established by every business unit to provide the data to be reported on the financial statements. The accounting process consists of two interrelated parts: the recording phase and the summarizing phase. Although these phases vary in details depending on the nature of the business, the main purpose is just the same - to be able to provide an accurate report containing the firm's condition and the result of its operation. .
To clearly illustrate the complete accounting cycle of a finance company, let us take as an example Dann & Berns, Inc. The company is engaged in providing business analysis including credit investigation, a thorough study of the company profile, review of the client's financial statements, and providing an overall rating of the clients, whom we will call as subjects in this example. Among Dann & Berns' subjects include big companies who are applying for accreditation as a distributor of another firm; applicant verification for banks and other financial institutions offering various types of loans, as part of their pre-approval requirements; outsourcing companies and other headhunting firms for hire-right purposes; and others from different industries. To be able to provide the necessary services, Dann & Berns is hiring very senior financial professionals for these functions. These professionals are required to have a solid background in finance and accounting as well as the ability to communicate with the top management of different financial institutions. A deep knowledge on financial analysis is highly expected from them. The Operations Department is involved in the main process and is consist of report coordinators, field officers, business analysts, and editors, who are all directly reporting to the vice president. Other departments providing support include marketing, human resources, legal, information technology, accounting and audit.