Accounting is one of the key cornerstones of good information systems in microfinance institutions. A good accounting system produces accurate, relevant and timely reports that enable meaningful analysis and monitoring of operations. Accounting practice and reporting standards vary slightly from country to country, although there is The Toolkit includes: a growing trend towards common accounting What is Accounting? standards articulated in International Accounting Overview of Microfinance Accounting Standards (IAS) and International Financial Systems Reporting Standards (IFRS). As the effects of the Accounting Documents global economy and international trade increase, The Accounting Cycle many national standards are gradually being harmonised with IAS. The microfinance industry Internal Control Procedures is moving in this direction as well. The topics Accounting Procedures for Microfinance included in this toolkit help MFIs to keep abreast Financial Statements and Reports of ongoing developments and changes in the sector, particularly to the standards that apply to them. This toolkit on Basic Financial and Accounting 1. Transaction Systems for MFIs offers the key issues in setting up occurs MFI accounting systems and structures. It does not 8. Closing 2. Journalizing focus on the theory of accounting concepts, but emphasises on practical procedures, skills, and tools needed to implement and manage accounting 7. Draft 3. Posting financials for microfinance transactions and reporting. For example, the sample of accounting cycle illustrates
6. Closing Entries 5. Accounting adjustments balance 4. Trial balance
the flow of financial transactions and data.
The purpose of the toolkit is to help MFI accountants and management understand the key elements of financial and accounting systems that strengthen internal controls, and increase the reliability of financial statements and reports for analysis