Accounting is the fundamental means of tracking and understanding a business’ financial transactions. The accounting cycle of a service business begins with the initial recording and organization of all business services that are provided, such as consulting or labor. Next, a transaction must be recorded to record the corresponding cash (or other asset) that was exchanged for those services. After this transaction is documented in the general ledger, an account is then created to develop an organized series of reports that provide information about the service business’ overall performance. This process will repeat itself on a regular basis as more services are rendered and paid for. By following the steps of the accounting cycle for service businesses, owners and stakeholders can accurately measure the profitability and efficiency of their business operations.