http://www.boardroomplace.org/benefits-of-succession-planning/

A financial transaction is a type of event that involves at minimum two parties and directly affects their financial situation. At least one of the parties will alter the amount of money on its accounts (assets or liabilities). The timing of a financial transaction can vary depending on whether the entity is using accrual or cash accounting guidelines. The use of these approaches affects tax reporting and taxability.

Stakeholders rely on financial statements to assess the condition of a company and their investments, such as shares and loans. Transparent and accurate financial transactions and reports are a must for all entities.

The purpose of any financial statement is to provide information that will allow stakeholders to comprehend the current state of affairs and future plans of the company. Financial statements could include an income statement, a balance sheet statement and a cash flow statement. The first two are static snapshots that present a company’s financial position, while the third is forecasted based on the current trends.

Providing accurate and transparent financial transactions and reporting is a complex process. Accounting journals are the simplest method of recording a financial transaction. Each entry is manually recorded by accountants. This can be tedious and susceptible to errors.

An alternative to this is to use a single financial statement, referred to as a consolidated financial statement. The report reveals all financial transactions for each institution within the university. By substantiating each transaction at the time of entry and reviewing material transactions on a quarterly basis the university can prepare the consolidated financial statements which are free of material errors.