Accounting is a system composed of inputs, processes, and outputs – much like a manufacturing process. In this case, the output is the financial statement and other financial records and reports. The inputs are the source documents which provide the details for financial transactions in the accounting system, and the process is balanced double-entry bookkeeping. The outstanding question is how to logically connect inputs to outputs, making sure that the source information isn’t lost during the processing. If the accounting solution in use is QuickBooks, then the answer is QuickBooks document management.
Source documents are the “documentary evidence” and the accounting process relies upon this evidence to prove (substantiate) the financial transactions entered. When businesses sell or purchase items and money is received or spent, the source documents are the proof that a transaction has actually occurred. Management of the source documents and original transaction information is a key element in creating internal control of resources and reducing risk from fraud, theft or misappropriation. Source documentation management is not only important within the business; it is also required to support tax audits and other business or financial reviews.