Financial transactions and reports help companies track the money coming in and out, manage debt at bay, ensure tax compliance and more. Financial reporting isn’t the most exciting aspect of managing a business, however, it’s crucial to ensure everything is accurate and up-to-date.
A financial transaction is a completed agreement that alters the financial situation of two or more individuals. There are four kinds: payments, sales, and purchases. These kinds of financial transactions are recorded using the cash method or accrual accounting. They should be accompanied by supporting documentation.
The substantiation procedure is crucial to ensure the integrity of the financial statements that have been audited by an external auditor and internal management reporting. The process of confirming an event is properly documented, recorded and approved helps Drexel produce accurate and reliable reports, free from material errors.
A financial transaction must contain the who information, the what and when and the where, why and where. The substantiation process ensures that the transaction is compatible with policies and procedures set forth by the team of research accounting services and also adheres to the guidelines of federal agencies as well as private sponsors.
The Kuali Financial System provides tools to verify accuracy of an individual transaction. They include the Transaction Detail Report (TDR) and the Budget Adjustment Report (BA). The BA report displays pending entries in the General Ledger with dollar amounts indicated with D (debits) or C (credits). The Budget Adjustment Report is also an excellent way to spot unusual transactions and reconcile any variations between expenses and revenue which are recorded in your department’s expense accounts as well as on the Budget Verification Report.
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