Financial transactions and reports help businesses track money coming in and out, manage debt, adhere to tax laws and more. Financial reporting isn’t the most exciting aspect of managing a business, however, it’s essential to ensure everything is accurate and up-to-date.
A financial transaction is a completed agreement that alters the financial situation of two entities or individuals. There are four kinds: payments, purchases, and sales. These kinds of financial transactions are recorded using the cash method or accrual accounting, and are accompanied by supporting documentation.
The process of substantiation is vital to ensure the integrity of financial statements that are audited externally and internal management reports. The process of confirming the transaction is properly recorded, documented and endorsed assists Drexel create reliable and accurate reports that are free of material errors.
A financial transaction must contain the who information, the what and when and the why, where, and where. The substantiation procedure ensures that the transaction is in line with federal agency and private sponsor guidelines as well as the policies and procedures of the team responsible for research accounting.
The Kuali Financial System has tools to verify the accuracy of a transaction. These tools include the Transaction Detail Report and the Budget Adjustment (BA) report. The BA report lists pending transactions 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 activity and to reconcile the variances between revenue and expenses which are reported in your department’s expenses accounts as well as the Budget Verification Report.
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