My discussions with auditors and finance professionals usually lead to discussion around how generally unacceptable manual journals are in accounting systems these days.
The expectation is that you properly unify your systems and properly interface them so that the need for manual journals is completely or almost completely eliminated.
Manual journals speak to a lack of integration among ones’ systems or perhaps a failure in the good and proper accounting bookkeeping and accounting process but the reality is that there are certain circumstances under which the creation of a manual journal is simply a necessity even if you have a good systems architecture.
What is probably more important, is exposing the entire business and business partners as well as the audit team, to the events that drive the creation of the manual journals and what systems and processes you can put in place to either constrain their use or minimize their application.
Some of the kinds of manual journals that get created in the normal course of business include suspense, recurring, allocation, budget, standard, reversal, statistical, formula, encumbrance and tax journals but if you have to create manual journals what should you look for in a system that supports you being able to create journals in a controlled way?
During the course of working with customers, partners, consultants and software engineers on a product specifically targeted at the manual Journal Entry process I determined some aspects that those who were involved felt were important.
Here's a starter set of requirements for an automated journal entry solution - things that I believe it should at least include:
In the pursuit of the 'first time correct' manual journal organizations needs to have a robust and reliable automation solution that not only achieves the manual journal objectives of all the different types of manual journals one would like to create but which also supports the policies and controls that the business needs in order to assure correct and proper accounting records.
Can you think of any others?
Image: Edinburgh City of Print : a joint project between City of Edinburgh Museums and the Scottish Archive of Print and Publishing History Records (SAPPHIRE)
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