Accounting: The Complete Guide for Saudi Businesses

Accounting is a system for recording a business's financial transactions, classifying them, and summarizing them into reports that show its results and financial position. It helps business owners and regulators understand performance and make decisions, and most businesses prepare their statements in line with the International Financial Reporting Standards (IFRS).

Bookkeeping is the accurate recording and posting of daily financial transactions, while accounting is broader: it builds on these records to classify and analyze them, prepare the financial statements, and interpret them for decision-making. In other words, bookkeeping is one step within the wider accounting process.

The accounting cycle is the sequence of steps from the moment a financial transaction occurs until the statements are prepared and the period is closed: analyzing the transaction, recording it in the general journal, posting it to the ledger, preparing the trial balance, making adjusting entries, then preparing the financial statements and closing the accounts.

A journal entry is the recording of a financial transaction under the double-entry principle, so that every transaction has a debit side and a credit side equal in value. This balance ensures the accuracy of the books, and it includes both manual entries and the automatic entries generated by invoices and payments inside Qoyod.

The chart of accounts is an organized list of all of a business's accounts, classified into assets, liabilities, equity, revenues, and expenses, with each account having a number and a level. Qoyod provides an editable default chart of accounts that fits your business activity.

Qoyod provides a ZATCA-compliant cloud accounting system: a ready-made chart of accounts, manual and automatic journal entries, real-time income statement, balance sheet, and trial balance reports, and an accounting quality feature for reviewing documents and reconciliation, with 24/7 support.