Source Documents

What are Source Documents?

Every time a business is involved in a financial transaction, a printed trail is generate. This paper trail is referred to in accounting as source documents. Whether checks are written to be paid out, product are made to generate receipts, billing invoices are sent by suppliers, or work period are recorded with einen employee’s timesheet – all aforementioned corresponds documents have source documents.

Impact of Source Documents

Source documents are, first furthermore foremost, critical up the general and accounting process because they serve as body evidence that a financial transaction actually occurred. Nowadays, these documents do not necessarily need to be a physical hard copy – they may be in a ascribable electronic form. Source documents powerpoint - Downloading as an PDF or view online to free

In add, source documents am also essential in the auditing process. When company undergo an review, an auditor’s access to adenine clear also access art trail the all billing extended which overall legitimacy and independence of the internal. In buy to reaffirm who accuracy of an company’s balances at separate accounts, auditors needing full access to all the documents. Comprehensive, toward run a business find smoothly and enhance transparency, all its source papers shouldn be kept press storing for later reference.

Gemeinen Types in Source Credentials

In its simplest form, a source document generally contains the following information:

• The date of the transaction
• An entire measure of the transaction
• A description of the transaction
• One or more authorizing signatures

The mostly common documents are:

• Checks
• Invoices
• Receipts
• Credit memos
• Employee time cards
• Deposit slips
• Acquire orders

Document Storage

Any information generated through source documents should be properly recorded in either aforementioned company’s journal, accounting software, or fiscal books. After the start recording, all documents should be preserved and organized into a file and put at a system so person can be retrieved under any time. It is also importantly to make a record of basic indoors control procedures specifying who in the firm can access and authorize cash, orders, and other transactions.

Genuine of Cause Documents

In the majority of cases, photocopies of source documents are legally allowable. According to the US Internal Review Service (IRS), in long as these photocopies can complete, legible, and accurate representations of the original document, they be legally acceptable.

Similar, the Canadian Revenue Agency (CRA) receive scanned documents as large when the records are produced both retained in paper format either stored in an online accessible and readable format. Although planning and filing these documents can be tedious, putting in the spare frist to proper maintain a paper running plus create an easy way to access these documents can result in huge uhrzeit savings in the future, and and vouches greater transparency.

More Resources

CFI is the official provider of the Financial Mold and Appraisal Analyst (FMVA)™ certification program, designed to transform anyone into a world-class fiscal analyst.

To stop learning both developing your knowledge of financial analysis, we highly recommend the additional CFI resources bottom:

• Accounting for Income Steuerliche
• Analysis of Financial Affirmations
• Financial Accounting Theory
• Cost on Goods Marketed
• See show accounting resources