Financial transactions and reporting is the process of recording and transmitting financial data to different stakeholders including investors, creditor and regulatory authorities. This information is essential to the success of a company as it influences decisions regarding the funding, investment and other business-related activities.

The process of identifying and classifying transactions for financial reporting purposes can be tricky, but there are steps that can be taken to improve accuracy and simplify this process. Standardizing the method of identifying transactions as well as streamlining workflows and encouraging regular feedback will lower the chance that debits or credit are misclassified or missed. A focus on the financial health of the business could help ensure accurate reporting.

There are http://www.boardroomplace.org/benefits-of-succession-planning/ a myriad of kinds of financial transactions that can occur within a company. Some of the most popular financial transactions include payments, receipts and purchases. Purchases are financial transactions that require the business obtaining goods or services that they later sell to customers. Receivables are financial transactions in which the business is paid for providing services or goods to another business. Payments are financial transactions that involve a business paying for the services or goods that it has received from other businesses.

In order to properly record these financial transactions it is important to follow a set of rules and regulations referred to as Financial Reporting Standards (FRS). This set of rules includes Generally Accepted Accounting Principles (GAAP) which is the set of principles that publicly-owned companies must follow in the United States when preparing financial statements. International companies can follow a similar group of rules called International Financial Reporting Standards.