Simply Khata” uses already established Double entry Book keeping system of accounting with simplified automated entry mechanism. This system helps FPOs in maintaining their accounts and record all the incoming and outgoing resources. As a result, they can track how much is being earned and what’s being spent. It enables them to track their performance from a financial point of view.
When organizations record transactions properly, the documents prepared are accurate and they act as a ready reference for businesses whenever they need to retrieve or check any particular transaction for a particular period. This account- keeping system, however, includes details about purchases, sales, and liabilities recorded as expenses, income and expenses, and funding and accounts payable. As the data set is crystal clear, the details can be well represented via graphs and charts, providing a better comparative structure for businesses to assess. As a result, decision-making is more efficient and accurate .
Whenever a transaction, such as sales, purchase, expense, etc., occurs, it is recorded through proper journals, becoming the first entry in the system. As organizations use this accounting system, automated mechanism makes the respective entries in the correct account’s ledger whenever users post a journal. At the end of the period, however, it calculates the balance of each ledger and prepares different financial statements like balance sheets, cash flows, etc. Therefore, generating reports for reference and compliance becomes easier, while assisting the administration and management to make important financial decisions.