Financial reporting and transactions is the process of recording and analysis of the flow of money within an organization. It is a vital process that must be performed precisely and with integrity in order to produce reliable, accurate financial reports and ensure compliance with external requirements. This article will discuss the fundamental requirements and best practices for substantiating transactions and the documentation needed to back up every financial transaction.
A financial transaction is the alteration in the total assets and liabilities of an institution or its components due to interactions between units of an institution that are undertaken for commercial reasons. It does not include the writing-off or writing-down of bad debts by creditors or the unilateral cancellation of a debt by a debtor, both of which are recorded in the other changes in the volume of assets account.
Substantiation refers specifically to the original documents or work papers which provide the financial transaction with. The documentation must be clear enough to stand on its own and answer the following questions: who what, when, and why. The substantiation should also be linked to the general ledger transaction details.
A solid financial statement will demonstrate your company’s financial integrity to creditors and investors, and increase trust. It will also help you stay in compliance with tax laws. An online tool for reporting, such as datapine, will enable you to prepare financial statements in a matter of minutes. This http://www.boardroomplace.org/hybrid-board-of-directors-and-remote-management/ will allow you to focus on more important tasks, such as building a plan of action.
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