A financial transaction is a business event that involves at least two parties and has an impact on the financial health of those parties. It causes at least one party to change the amount of money that is in its accounts (assets and liabilities). The timing of financial transactions will depend on whether an entity follows accrual or cash accounting guidelines. These accounting methods can have an impact on the reporting process and taxability.

Financial statements are used by stakeholders to assess the condition of an organization and its investments like loans and stocks. All organizations must ensure that their financial transactions are transparent and accurate.

The purpose of any financial statement is to give information that will allow stakeholders to understand the current situation and future goals of the company. Financial statements contain a income statement, cash flow statement and balance sheet. The first two are static snapshots that show a company's financial situation, while the third one is forecast based upon the current trends.

It is difficult to provide accurate and transparent financial reporting and transactions. The most fundamental method of recording financial transactions is through journal entries, which require accountants to manually enter debits credit and account numbers for each entry. It is tedious and vulnerable to error.

A unified financial report, also known by the name consolidated financial statement, is an alternative. The report provides all financial transactions for every institution within an university. By substantiating each transaction at the time of entry and examining all transactions that are material every quarter the university is able produce consolidated financial statements which are free of any significant errors.