The Importance of Standardizing Business Source Documents
All business transactions require paperwork, called source documents. Business source documents, which are important to bookkeeping, need to be standardized. With standardized source documents, your bookkeeper (or you) can easily identify and interpret the relevant information.
Source documents serve as evidence of the terms and conditions agreed upon by your business and the other person or organization that it’s dealing with. Both parties receive some kind of source document. For example, for a sale at a cash register, the customer gets a sales receipt, and the business keeps a running tape of all transactions in the register.
You need to standardize the forms and procedures for processing and recording all normal, repetitive transactions, and you should control the generation and handling of these source documents. From the bookkeeping point of view, these business forms and documents provide information needed for recording transactions in the business’s accounts.
Sloppy paperwork leads to sloppy accounting records, and sloppy accounting records just won’t do when the time comes to prepare tax returns and financial statements.
Check out an office supply store to see the kinds of forms that you can buy right off the shelf. Also, computer accounting software packages like QuickBooks and Peachtree include templates for most business forms and source documents needed by a business, from invoices and receipts to purchase orders and payroll checks.