This thesis considers financial reporting on a general level with focus on recording accounts receivables entries while harmonizing internal and external reporting. The objective of the thesis work was to construct a manual on accounts receivables and specifically instructions on purchase in-voice accounting. Along with the invoice accounting manual, the profit and loss account and balance sheet structures were considered and formatted to better suit the needs of the company.

The objective of the thesis was to construct the client company instructions on processing accounts receivables. Instructions should be formatted and presented so that the instructions can be used as support for personnel handling accounts receivables. Instructions are of special importance to new employees processing purchase invoices for the first time. Therefore, the instructions can be used during the orientation of a new employee. Along with creating instructions on the accounts receivables process, the internal and external financial reporting of the company was studied and evaluated to harmonize internal and external reporting. The need for instructions has been recognized in the client firm but also by the thesis maker based on personal experience while working at the client firm.

The theoretical part of the thesis focuses on general processing of purchase invoices but the subject has been limited with the operations of the client firm in mind. The first part of the relevant theoretical framework considers value added tax and deductibility of expenditure in taxation. Regarding value added tax special attention has been paid to the areas of VAT that are often of concern at the client firm. This means for instance representation expenditure and purchases from abroad.

The second part of the theoretical framework considers internal and external reporting with attention their differences, similarities and requirements. Similar to the limitations on accounts receivables theory, theory on reporting has been limited to the areas most important to the operations of the client firm. After reporting, the final theoretical part explains the working process chosen to produce the instructions on the accounts receivables process.

The final produce of this thesis work is a manual on processing purchase invoices that can be used in orientating new employees. The manual can be developed in more detail if required in the operations of the client firm. A process of developing financial administration is at work in the client firm and some of these issues are approached during this process.