FINANCIAL RECORD MAINTENANCE PRACTICES IN BUSINESS ESTABLISHMENT
in ACCOUNTING PROJECT TOPICS AND MATERIALS on September 4, 2020CHAPTER ONE
- BACK GROUND OF STUDY
Finance is very important, it is as old as man and it is pivot on which every business hinges.
Finance is an economic force, a means of economic empowerment or enablement; where withal available to an organization to discharge or settle it’s obligations. It is therefore any or means of settlement. A transaction is said to be financed when it is settled through the payment of money and other credit facilities such as commercial bank loans, bank overdraft, letter of credits, finances of establishment comprise both cash and other liquid resources such as stock, bond, contract right etc, as well as the credit and loan facilities available to the organization (Adapted from Okofor 2003).
To achieve proper financial records, records of transactions must be kept, such financial records of business establishments includes, cash books, Receipt booklets, Bank Account books, ledger account books, invoices and payment books and booklets etc.
For effective management, these records must be kept ready at every point in time when they are needed.
Accounting to right and record institute London (march 2001), Record management is concerned with achieving economy and efficiency in the creation, maintenance use and disposal of the records of an organization and in making the information contain available in support of the business of that organization- the objective is to finish accurate and complete information when it s required.
Financial records in business organization cover greater aspects including control of file movement, location, types equipment, classification, index, procedures access and supervision, follow-up, retention period etc.
Financial record management is to help guide the organization in future. It also helps in providing a base for future action. Data on cost, pay vouchers financial statements, research findings etc. may assist management in future decision making by providing them with evidence for past experiences.
Financial records maintenance help to provide statutory obligation, which the low requires, that the organization keep detailed records about certain areas of the business, there are obligations which have to be met, for instance, recording all business transaction for purpose of value Added Tax (VAT), Taxable income etc. it also show evidence of transactions. Detailed records are needed as a payment record of the inputs and outputs of the organization. It is needful that written records be filed; this is because files are essential for the continual operation of business, which is the memory of a business.
In modern business offices vital decision must be based upon available up to date information. This is to say, risk are too great for the executives, decision to be based up on guesses, heresy etc. thus, a business establishment cannot hope to remain in a competitive field without adequate financial records are the life wire of any organization. The importance of record management cannot be over emphasized, because of the information reason, hence, the researcher bid to find out the effects of poor financial records in some business establishments.
