Financial Transactions and Reporting

Financial reporting and transactions are procedures of recording and transmitting financial information to various stakeholders, such as creditors, investors and regulatory authorities. This information is critical to a company’s growth, because it aids in official statement making the company’s decisions regarding investments, funding and other business operations.

It isn’t always easy to identify and classify transactions for financial reporting. However, there are ways to improve accuracy and simplify the process. Standardizing the method of identifying transactions as well as streamlining workflows and encouraging regular feedback will reduce the likelihood that debits and credit are not correctly classified or missed. A clear and focused view of the financial picture of the company could help ensure that accurate reporting is done.

There are a variety of financial transactions which can take place within a company. The most common include receipts, purchases and payments. Purchases are financial transactions where the company purchases goods or services that it will later sell to customers. Receipts are financial transactions that involve the business receiving payment to provide goods or services to other businesses. Payments are financial transactions that involve the business paying for the goods or services that it has received from other businesses.

In order to properly document these financial transactions, it is important to follow the rules and regulations referred to as Financial Reporting Standards (FRS). The rules in this group include Generally Accepted Accounting Principles (GAAP), which are the set of guidelines that public companies must follow in the United States when preparing financial statements. International companies may use a similar group of rules called International Financial Reporting Standards.