Geschäftsvorgang

Geschäftsvorgang is a German term that translates to business transaction or business event. It refers to any action or activity that affects the financial state of a company and is capable of being recorded in its accounting system. These events can be internal or external. External business transactions involve an exchange with an outside party, such as a sale of goods, purchase of supplies, or payment of an invoice. Internal business transactions, on the other hand, occur within the company itself, like the depreciation of an asset or the consumption of raw materials in production.

The core characteristic of a Geschäftsvorgang is its economic impact. It must involve a change in assets, liabilities, or equity. For instance, receiving cash from a customer for a sale is a Geschäftsvorgang because it increases the company's cash asset and decreases its inventory asset (or increases revenue). Similarly, paying rent is a Geschäftsvorgang as it reduces cash and increases expenses. Not all activities are Geschäftsvorgänge; for example, a decision to hire a new employee is not a Geschäftsvorgang until that employee starts working and their salary becomes a financial obligation. Proper identification and recording of Geschäftsvorgänge are fundamental to maintaining accurate financial records and preparing financial statements.