Evidence Of Internal Transactions: Definition, Benefits, And Differences With Evidence Of External Transactions

Illustration of evidence of internal transactions. (Pixabay)

YOGYAKARTA - Evidence of internal transactions is something that must be considered and should not be missed in a business. Because evidence of internal transactions is one of the factors supporting good business accountability. Accountability of a company will certainly support success in business.

The transaction evidence consists of two types, namely evidence of internal and external transactions. Most people still misunderstand the differences of these two types of transaction evidence. In fact, these two transaction proofs are two different things.

So what is evidence of internal transactions? Reported from Antara, see the explanation below.

Proof of transactions is proof that records the activities that have been carried out by a company. Proof of transactions is used so that the company has a record if there are financial problems the next day. The existence of transaction evidence will also make it easier for a company's accounting team to record business activities in a financial report.

In addition, with proof of transaction, we can verify the party responsible for a transaction in the company. With the proof of transaction, your company can prevent the risk of financial records errors that could occur.

There are several benefits of proof of transaction for your company. Below are the benefits that can be obtained from proof of transaction:

As discussed already, the proof of the transaction consists of two types, namely evidence of internal and external transactions. Unlike evidence of internal transactions involving only internal parties, evidence of external transactions is proof of transactions from activities involving third parties outside the company. External transactions also allow transactions with more than one third party.

Several examples of third parties in external transactions include individuals or companies that cooperate with your company. These third parties can include resellers, vendors, suppliers, to agents. Examples of evidence of this external transaction can be in the form of invoices, notes, checks, receipts, and others.

In addition, there are several other things that are the difference between internal and external transactions. Below are some differences that you can see.

Internal transactions are the result of internal business that generally does not involve resources. However, if resources are involved, it only happens within the internal of a company or organization. Meanwhile, in external transactions, there is an exchange of resources between two or more parties and the company.

Internal transactions occur between one department and another in one company, so that in general there is no impact on cash flow in the business. The external transaction involves exchanging resources with external parties so that it affects the company's cash.

Internal transactions occur because of the function of internal business only. Meanwhile, external transactions are due to business activities between companies and other parties.

Internal transactions involve only one party, namely the company itself. The external transaction involves two or more parties with a company.

That's a review of evidence of internal transactions. Visit VOI.id to get other interesting information.