Financial Transactions and Reporting

Financial transactions and reports involve monitoring and studying the flow of money through your company. This may include internal transactions like payroll and expense reports, as well as external transactions like rentals or sales of assets, and credit-related transactions. Financial transaction analysis is critical to ensuring that your accounting records are accurate and reliable. This requires clear definitions, policies and processes and regular, regular updating.

Internal transactions are those which take place within a company for example, such as the purchase, sale or 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. These transactions may include social responsibility and donations, along with other expenses like travel and PCard charges.

Cash and non-cash transactions are recorded in the financial system of record, which may be anything from a simple accounting software package to a sophisticated Enterprise Resource Planning (ERP) system. A sound financial statement relies on the policies and procedures used to ensure that only the transactions are recorded in the system that can be verified with board room place objective evidence, such as evidence from the source like sales orders, purchase receipts invoices, cancelled check promissory note statements, bank statements and appraisal reports.

To confirm the authenticity of a transaction, you must first identify the accounts involved and determine the account where the transaction will either be debited or credit. For instance, suppose your company earns $5,000 in revenue from consulting services. To record the sale you must identify the income account as well as the accounts receivables account. You must confirm that both are increasing and apply the rules for crediting and debiting. The transaction must be recorded into your journal entry to complete the process.