Accounting cycles are the series of steps that companies use to record and report financial activity. The last step in an accounting cycle is the closing process, which is the process of transferring temporary balance sheet accounts—like sales, purchases, and expenses—made throughout the cycle back to zero. After this step, the books are closed and no further entries can be made until the start of the next cycle. Closing the books ensures the accuracy and completeness of a company’s financial reports going forward. The last step in the accounting cycle may take some time, but it’s essential to maintaining accurate records and creating trustworthy financial statements.