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What is Pre-Accounting?

Pre-accounting is a method used by businesses to monitor their daily financial activities. Companies use preliminary accounting to record debits and credits in customer accounts, cash flow, inventory status, invoices and check/note transactions. Pre-accounting includes all these processes of businesses and covers business financial information. This makes it easier to monitor and control daily operations.

Transactions performed with pre-accounting applications include tracking customer and supplier accounts, managing cash flow, monitoring bank transactions (deposits, withdrawals, transfers/credits), tracking check and promissory note payments, monitoring stock movements, managing delivery notes, monitoring invoices and paying personnel wages.

As an important note, the information recorded in pre-accounting forms a critical part of the day-to-day operation of the business. Management reports often contain information derived from these records and provide a guiding perspective to business owners. Recording expenditures, payments and revenues in pre-accounting systems greatly facilitates their monitoring and management.

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