The financial transaction and report process provides a clear picture of the cash balance of a company, its inflows and outputs which is essential for businesses of all sizes. It assists in identifying patterns, opportunities and risks that are worth exploiting or mitigate. It can also be used to meet legal and regulatory requirements. For example electric utilities may need to report their financials to a government agency or a lender, if they are a publicly traded company.
Financial reports enable businesses to communicate internally about the current state of their finances. They provide crucial information to employees that can aid in improving productivity and protecting against mistakes. They also aid managers in making informed decisions in order to meet the financial goals of their organization.
To produce effective reports, a business should have processes and systems that are aligned with its internal policies. Having these systems in place does not only improve the quality of reports but also speeds up data processing. This can cut down on the time required to process invoices and perform other financial reporting tasks, like the ad hoc analysis of budgets or balancing.
A clear description of each transaction should be recorded in every record. This will help identify the specific transaction. This will help differentiate a particular transaction from other transactions in the general ledger or Finance Mart reports. The description should be brief and clearly describe the reason to book an entry, including a detailed calculation, if needed. Other elements that should be incorporated into every record are a posting financial transactions and reporting date chartfield, date of posting and type of transaction.