Bookkeeping is based on the principle of supporting documents. Each transaction must, in principle, be recorded in the books of accounts daily. A supporting document must accompany each transaction, basically evidence, justification, or explanation about the transaction. Supporting documents describe in detail the nature and purpose of the business transaction.
Bookkeeping captures the following financial transactions:
For instance, a sale must be supported by an invoice and a receipt. Cash receipts, bank statements, journals, and supplier invoices are other common documents used to support transactions.
Effective document preparation and organization go beyond mere record-keeping. They play a crucial role in ensuring transparency and accountability within an organization. These documents serve as the backbone of prepared accounts, subjected to independent scrutiny, and offer a clear trail of evidence for every transaction. In essence, they become the organization’s memory, readily accessible to answer any questions or address any concerns that may arise, especially during any financial examination. By meticulously preparing and organizing supporting documents, organizations not only comply with financial regulations but also foster trust and confidence in their operations.
A bookkeeping service will allow you to handle other essential business functions much more easily. We offer hassle-free bookkeeping services in Malaysia to help your business focus on its core activities.
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