Financial transactions and reporting can help businesses track money coming out and in, control debt, adhere to tax laws, and much more. Financial reporting is not the most exciting part of running a business, but it’s important to make sure everything is accurate and up-to-date.
A financial transaction is an agreement that affects the financial affairs of two people or entities. There are four types of financial transactions: sales, purchases and receipts. Payments are also accepted. These types of financial transactions are recorded using the cash method or accrual accounting. They should be accompanied by supporting documents.
The process of substantiation is vital for the accuracy of externally audited financial statements as well as internal management reporting. The process of confirming that a transaction is properly documented, recorded and approved helps Drexel create reliable and accurate reports, free of any material mistakes.
In addition to the financial amounts involved, financial transactions must be documented with the who the, what, when, where and why details. The substantiation process makes sure that the transaction is in line with the guidelines and policies that are set by the team of research accounting services and follows the guidelines of federal agencies as well as private sponsors.
The Kuali Financial System provides tools to confirm the accuracy of any particular transaction. This includes the Transaction Detail Report (TDR) and the Budget Adjustment Report (BA). The BA report lists pending transactions in the General Ledger with dollar amounts indicated with D (debits) or C (credits). The Budget Adjustment Report is also a great way to identify unusual activities and reconcile differences between the amount of revenue and expenses which are recorded in your department’s expense accounts as well as on the Budget Verification Report.
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