Financial transactions and reporting help companies track the money coming in and out, help keep debt at bay, meet tax compliance and more. Financial reporting might not be the most exciting part of running a business but it’s essential to ensure that everything is correct and up-to-date.
A financial transaction is a completed agreement that changes the finances of two individuals or entities. There are four kinds of financial transactions: sales, purchases and receipts, as well as payments. These types of transactions are recorded using either the accrual or cash method of accounting and should be documented with the help of supporting documents.
The substantiation procedure is crucial for the accuracy of financial statements that are audited externally and internal management reporting. The process of confirming that the transaction is properly recorded, documented and approved helps Drexel create accurate and reliable reports, free from material mistakes.
A financial transaction must contain the who information, the what and when along with the where, why and where. The substantiation process ensures that the transaction adheres to federal agency and private sponsor guidelines, and also the policies and procedures of the research accounting services team.
The Kuali Financial System provides tools to confirm the accuracy of the particular transaction. They include the Transaction Detail Report (TDR) and the Budget Adjustment Report (BA). The BA report shows pending entries with dollar amounts labeled as D (debits), or C (credits) in the General Ledger. The Budget Adjustment Report also provides a way to identify unusual activities and reconcile the variations between revenue and expenses that are reported in your department’s expense accounts as well as the Budget Verification Report.
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