Financial transactions and reports help businesses keep track of money coming in and out, keep the debt out of sight, meet tax compliance, and much more. Financial reporting is not the most exciting aspect of managing a business, but it’s important to make sure everything is accurate and up-to-date.
A financial transaction is a completed agreement that alters the financial situation of two people or entities. There are four types of financial transactions: purchases, sales, payments and receipts. These types of financial transactions are recorded either using the cash method or accrual accounting. All of these are accompanied by supporting documentation.
The process of substantiation is crucial for the integrity of an entity’s externally audited financial statements consolidated as well as the internal management reports. Drexel produces accurate and reliable reports by confirming that transactions have been correctly recorded, documented and ratified.
A financial transaction should include the who the information, when and what and the why, where, and where. The procedure for substantiation assures that the transaction is compliant with federal agency and private sponsor guidelines, as well as the guidelines and procedures of the team that provides research accounting services.
The Kuali Financial System provides tools to check the accuracy of the particular transaction. This includes 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 an opportunity to spot unusual activities and reconcile the variations between revenue and expenses from your department’s expense accounts and the Budget Verification Report.