Financial Transactions and Reporting

Financial transactions and reports involve tracking and studying the flow of money through your business. This may include internal transactions, such as expense and payroll reports, external transactions, like rentals or sales of assets, and credit-related transactions. Analysis of financial transactions is vital to ensure that your accounting records are accurate and reliable. This requires clear definitions, processes and policies, as well as regular, consistent updates.

Internal transactions are those which occur within a business for example, such as the purchase, sale or leasing of office space. These transactions are also referred as non-cash, since they don’t involve the exchange of products or services in exchange for cash. These transactions may include social responsibility and donations and other expenses, such as PCard and travel costs.

Non-cash and cash transactions are recorded in the financial system of record, which could range from a simple accounting software application www.boardroomplace.org/a-comprehensive-guide-to-the-best-software-solutions-for-financial-transactions-and-reporting to a sophisticated Enterprise Resource Planning (ERP) system. A reliable financial statement is dependent on policies and procedures which ensure that only transactions that can be independently verified are recorded in the system. These include sources documentation such as sales orders, receipts, purchase invoices bank statements, cancelled checks, promissory note and appraisal reports.

To confirm the authenticity of an activity, you must first identify the accounts involved, and identify the account from which it will be deducted and credited. Let’s say, for instance, that your company earned an amount of $5,000 in revenue from consulting services. To note the sale, it is necessary to must identify the income account as well as the account receivables; determine that both are growing and follow the guidelines of crediting and debiting. To complete the process, you must then note the transaction in your journal entry.