Financial Transactions and Reporting

Financial transactions and reporting entail tracking and analyzing money flow through your company. This could be internal transactions like payroll and expense reports, as well as external transactions like rentals or sales of assets, and credit-related transactions. Analyzing financial transactions is essential to ensure that your accounting records are accurate and reliable. This requires clear guidelines, processes and definitions and regular, consistent updating.

Internal transactions are those that are conducted within a company for example, the purchase, sale and rental of office space. They are also known as non-cash transactions since they do not involve the trading of goods or services for cash. They can include social responsibility spending, in addition to other expenses, such as travel and PCard fees.

Cash and non-cash transactions are recorded in the financial system of record, which could range from a simple accounting software package to a more sophisticated Enterprise Resource Planning (ERP) system. A reliable financial statement depends on policies and procedures that ensure that only those transactions are recorded in the system that can be verified using objective evidence, such as evidence from the source like purchase receipts, sales orders invoices, cancelled checks, bank statements, promissory notes and appraisal reports.

To verify an accurate transaction, you need to first identify the accounts that are involved and identify the account where the transaction will be debited or credit. For example, suppose your company earns $5,000 in revenue from consulting services. To record the sale you must identify read this the income account as well as the receivables accounts, confirm that both are increasing and apply the rules for crediting and debiting. You must add the transaction into your journal entry to complete the process.