Journal entry is the method which allows us to sort all the transactions into data in the accounting records of a business. A business can use many journal entries in just a single reporting period. The journal entry is considered to be balanced when the totals of the debits and credits are equal.
–Expenses Ledger Our accountants create an expense ledger with details of transactions within a specific period of time. Businesses are required by law to maintain expense ledgers to prevent and detect illegal activities.
To be ensured that transactions are recorded accurately, the bookkeepers compare total of updated expenses with expenses listed on bank statements. They are usually responsible for reviewing outstanding transactions.
Bank reconciliation is a statement which allows the business to adjust or correct any discrepancies in case there are differences between cash account and a bank statement in an entity’s accounting records.
–Credit Card Reconciliation Reconciliation of the credit card statement means verification of the actual purchases made by the business being charged for. This process will pick up any errors or fraudulent activities on the credit card straight away. Thus, it will help to avoid having to pay for something business did not receive.
–Management reports Management reports are created to analyze the volume of outstanding invoices, assessing and monitoring the entity’s performance in comparison with their competitors. They are vitally important for the well-functioning of the business.
–Aging reports Most companies do business with each other on credit, which means that a business buys goods or products and pays for them in specific period of time. If they don’t pay as agreed under the credit terms, the seller could have cash flow problems. In other words, the company is unable to pay their bills on time eventually leading to it becoming insolvent.
To prevent this from happening, businesses need to prepare an ageing report to determine all the customers falling behind the payments terms and showing outstanding balance in the accounts.