Transaction tracking and recording are very important, especially for growing businesses. Often, details such as recording every transaction can seem like a burdensome task. However, the benefits gained from taking the time to set up proper processes and systems to cope with your business expansion can result in a hundredfold increase in profits!
So, is there a difference between transactions recording?
A record is a document (hard copy or digital) that records a business dealing that evidences a transaction which can be retrievable at a later date for review and reconciliation. Most business records have specified retention methods based on legal requirements and or internal company policies.
Transactions tracking is the process of knowing the source of the data in your business recording system. In other words, it is Tracking a record through every system that makes up a business process and is often used for performance management and to manage customers (internal and external) experience.
For bigger businesses with a large number of transactions, tracking may require a more advanced fully integrated tracking system such as Oracle or SAP, CRM System or order tracking and delivery systems such as used by the like of Tesco or Amazon. On the other hand, the owner of a small business may have a fewer amount of transactions and hence need a less complicated system, such as the use of a small business accounting software like Sage, Zero or QuickBooks.
No matter the size of your business, the tracking of transactions in a business is a worthy investment for any business owner who wants to ensure their records are timely complete and accurate, manage the customer journey and avoid risks and unnecessary losses.
Transaction tracking for bigger businesses
Business transaction management is the tracking and monitoring of transactions in a company. It is considered as a part of information technology and is a tool for keeping track of business transactions to detect anomalies within business applications. These anomalies can then be corrected.
In modern businesses, transactions may have to pass through numerous, complex systems and applications, and as a result, there may be a requirement for transaction management. A failure to track transactions can be a disaster not only for the business (loss of records and funds) but can also cost a company its customers.
In business, there should be an end-to-end tracking of all transactions –
Active transaction tracking should be real-time and should be able to flag irregular and unique behavior immediately. In this way, you spot anomalies in time. Such details as expected duration, time, references and credentials should accompany each transaction.
An example of transaction tracking in a large business is the Western Union tracking of Money Transfers. Since each transaction has an ID or reference number, a beneficiary following up any transaction uses this number to track the progress of the transfer and the company would also know when the receiver collects the money.
Tracking transactions in a small business
Suppose the owner of a small business cannot afford the IT system kind of tracking of transactions or does not have a vast number of transactions to track? It is vital to keep control over daily operations in the following ways:
• Open a ledger book to record transactions – This may be somewhat outdated but can be handy as a back-up for information that would eventually transfer to a business accounting software. A spreadsheet such as Excel can also be used to record transactions.
• File receipts and payment vouchers in the order and date they occurred.
Unless a business has very few transactions, a business accounting software is an efficient way of recording all business transactions. Such software is useful not only in the recording of daily operation but in the preparation of monthly and annual reports.
In summary, it is essential for a business, especially large companies, to keep track of every individual transaction through a business transaction management system. Especially businesses that have a large customer base or are in the service industry. Transaction tracking is key to customer satisfaction, records and security. It is also crucial for any business, large or small, to have a system of records for all transactions. Daily transactions should be recorded and preserved in a reliable format for future reference and the compilation of monthly and annual reports. A business owner who does not have a proper system of record-keeping will find him/herself unable to gauge the performance of the business or will have trouble with tax authorities and auditors. Besides, a company that lacks proper records is likely to experience cash flow problems.
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