It is imperative that everyone in a company, business, or organization maintain good finance records. This can be done by keeping paper records or electronic documents. Either way, these records will help you keep track of where your money is at all times and what you owe. Some people prefer to keep all of their records in a binder, while others may choose to organize their records on the computer.
There are rules and laws that require businesses to maintain financial records for a certain period of time. For example, the Securities and Exchange Commission (SEC) requires that firms keep their financial records for seven years. Other businesses adhere to the “generally accepted accounting principle,” which requires all businesses to present their financial statements for a certain period of time.
Aside from financial statements, there are other records that document expenditures and purchases. In some companies, this includes departmental purchase orders, credit card charge slips, and P-Card transactions. Other types of finance records include bills, invoices, journal vouchers, and reports on receipts and payments. These records help determine the financial status of a company and may be used to evaluate programs and implement changes to the organization.
Businesses have to maintain the proper financial records in order to avoid any risks. This includes auditing and storing them securely. Without proper records management, a company faces a high risk of lawsuits and stiff fines. To avoid these issues, companies should set up a schedule for managing their records. They should also secure their financial records by securely shredding them.
Finance records can include everything from check requests to invoices. These documents may contain information on the account, the recipient of the check, and the approval signature. They also may contain records of collection efforts such as collection letters, correspondence with collection agencies, and lists of uncollectible accounts. Additionally, these records may include Aging Reports.
Finance records are vital in business because they provide proof of business transactions and summarize the results of the company. They are an integral part of the accounting department. Invoices, receipts, cash flow statements, trial balances, balance sheets, and income statements are all examples of financial records. In addition, companies also use these records as a basis for tax returns.
Another important source of finance records is your bank account. Bank accounts typically store transactions for several years, and they can include payments you make each month. You can keep a record of every check that you write. In addition to paying bills, you can also record payments made to suppliers and employees. Then, you can compare the bank statement against the accounting records.