You never know when you will need data or the transaction from the past. You cannot keep everything in your mind for a long period. Organizations must keep transaction records so that they can access them easily whenever they need them. There are ways to keep these records, and over time the documents are now in the virtual form and are found in the organization’s database system.
What are the types of records you must keep?
Every record is important for the organization. Information and data are your assets, and you must keep your assets safe and secure. Below are some of the record list that most of the organizations keep.
- Income statements and cash flows
- Results of day to day activities
- Payment records
- Transactional records
Here below, we will discuss some of the advantages of keeping transactional records.
Importance of transactional records
The transaction records play a key role in the organization’s growth as it is one of the effective ways of tracking your finance department and operations. Below are some of the benefits that one can get from keeping the financial records.
1. You get to know where you stand
Transaction records help businesses and organizations to have an understanding of their position. They get to know where they stand and the grey areas that need improvements and more effort. Transaction records are a combination of your income and expenses within a given time. Higher management can make financial decisions based on previous transaction records and plan their next move. Businesses can better understand what profit they made in a year or in a month and the expenses in a specific time. To properly organize your financial records, employ the services of top audit firms in Dubai to have a hold over your finance department.
2. Helps in financial audits
Organizations conduct audit activities more often in their organization. The audit teams may be internal or external, depending upon the need. For an external auditor to know the transactional records is very important to make the final decisions. They can look at the transaction records and match them to their records to identify any deviation or irregularities in the financial statements. As the audit activities halt the organization’s other operations until the audit is complete; having transactional records will help prepare audit reports in a minimum time without resulting delays in organizational processes.
3. Helps in paying tax
Keeping transaction records helps you to save yourself from paying extra taxes. The history of your income and expenses will help you pay the tax that is in your range. If you do not have proof of your income to expense record, you may pay extra tax. There will be no benefit or profit left for your organization or business if you keep spending the amount on taxes from what you earn.
4. Easy identification of fraudulent activities
Keeping proper documentation of your day-to-day transactions will help you keep track of what is coming into the organization’s pocket and what is going out of its bag. By looking at the transactional records, senior management can track fraudulent activities by the workers or the employees within the organization. Workers stay cautious and fearful of doing or indulging in fraud activities because they know they are under observation.
5. Helps in decision-making processes
Higher management and the authorities of an organization or business can make plans and decisions based on the current financial or transactional records. You can oversee where your organization is standing, the steps necessary to perform to make the upcoming operations and activities of an organization better. Transaction records also help identify the areas that are costing an arm or leg to the organization and the functions that need much money to complete. One can have cost control by going through transaction records.