Cash accounting is required by most public and private sector organizations. Furthermore, most organizations have to report a full set of financial statements.
Today, many corporate groups and other organizations must comply with a plurality of statutory accounting principles when preparing and publishing their annual financial statements. For example, a German group listed on a U.S. stock exchange must submit a financial statement under US-GAAP and/or IAS as well as under HGB. It is possible that further financial statements are necessary, for example, for subsidiaries in Asian countries, according to local rules.
In addition to these financial statements prescribed by law, the preparation of financial statements for various organizational units of an enterprise that are as informative as possible are required for internal uses. For example, such financial statements provide management with as comprehensive a picture as possible on the development of individual projects or company segments or product groups. The organizational units of an enterprise may be cost centers, profit centers, or segments or lines of business. In the media industry, such an organizational unit may, for example, involve a single title or, in the insurance industry, a single type or line of insurance business.
All company reports of a corporate entity are based on business transactions, each of which is to be recorded by a document. For example, a business transaction may be recorded by an incoming supplier invoice or the withdrawal of goods from the stores for production purposes. Large corporate entities incur thousands or hundreds of thousands of transactions each day. For that reason, accounting for a large corporate entity can be accomplished only with the use of data processing systems if related efforts are to be justifiable.
In view of the foregoing, corporate entities and other organizations require improved data processing systems and methods that provide a summarized reporting of their cash flow, so that they can view money paid and money received. Such systems and methods must be capable of providing relevant balance and other accounting information, even for entities that incur a large number of daily transactions. Therefore, there is thus a need to provide an improved accounting tool to facilitate a retrospective projection of information along a process chain.