Financial transactions and reporting entails monitoring and analysing the flow of funds through your company. It could refer to transactions that take place within the company, such as purchases or payroll and expense reports; and externally, such as sales and rental of assets; and credit-related transactions (e.g. loans or revolving credits, cash advances). Analysis of financial transactions http://www.boardroomplace.org/hybrid-board-of-directors-and-remote-management/ is vital to ensuring that your accounting records are accurate and reliable. This requires clear definitions and processes, as well a consistent and regular update.
Internal transactions are those which take place within a company like the purchase, sale or leasing of office space. These transactions are also referred as non-cash due to the fact that they do not require the exchange of items or services for cash. These transactions may involve social responsibility and donations, and other expenses such as PCard and travel costs.
The financial system of record tracks all cash and non-cash transactions. This could range from a basic accounting program to an Enterprise Resource Planning (ERP). A solid financial statement is based on policies and procedures that ensure that only transactions that can be verified objectively are recorded in the system. These include source documentation like sales orders receipts, purchase invoices, bank statements, cancelled checks and appraisal reports.
To confirm the authenticity of the transaction, you need to first determine the accounts involved and identify the account from which it will be debited and credit. Suppose, for example, that your business earned the sum of $5,000 through 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 guidelines for crediting and debiting. The transaction must be recorded in your journal entry to complete the process.