Entering manual journals is one of the most common and most time-consuming processes in accounting, affecting just about every finance department’s workflow. Most of the manual journal entries are created in just a few days during monthly closing. This makes the work of accountants and controllers stressful – overtime work is required too often and feeling of rush makes companies to cut corners with auditability, control, and approvals of the entries.
In small companies, these challenges are manageable because only a few people are involved. The bigger the number of involved people grows and the more legal companies there are in several locations, the more complicated things get, and the number of journal entries starts to increase. The most complex scenario is when a company also operates in multiple ERP systems.
The following signs are typical for companies which would benefit from the intelligent journal process automation the most:
1. Average monthly number of journals exceeds 500
If you deal with journals containing a single general ledger (GL) document number with multiple lines and your company already processes large numbers of these documents or is expected to reach the level of 500 on average per month, this is a clear sign that projected benefit from intelligent automation for your company is high and up to 50% of the time you are spending now managing journal entries can be saved.
2. You are keeping hard copies of journals in binders
You print and archive your journals and supporting evidence in binders. If you need to check something later, you must go to the archive and find the paper document and its attachments from there. Before archiving, you must get approval to paper documents.
3. You have no or very little means to validate journal entries
You have no or very little means to validate a journal entry before posting it to the general ledger. You can’t utilise active values from your ERP system’s value sets when posting and you don’t know if the values in the previous month’s Excel file are valid anymore. If there is something wrong in the posting, the accountant will find it out when trying to upload the journal through Excel interface or enter it manually.
4. You are posting journals to GL manually or using Excel
You post journals to GL either manually or using Excel sheets. This is an error-prone and slow way to enter data. User interfaces of ERP systems are often not very useful either. Excel upload interface provides a way to get data in, but if there are validation errors, manual work is required to fix postings (and in the worst case, the Excel file must be sent back to the creator) and all file handling is manual. If a journal recurs monthly, you must manually create a journal for every month and then upload it.
5. You have multiple ERP systems in use
You have multiple ERP systems or multiple instances of an ERP system (most commonly SAP, Oracle, Microsoft, Agresso, Visma, and IFS). You must know by heart in which ERP system various companies work, what the segments are in each system, and where to send the journal when it is ready.
6. You are managing journals via emails
You have no or very little means of keeping track of the overall journal process. Emails are being sent back and forth within the team to check the status or to speed up the process. The roles for creating, approving, and handling journals might be agreed, but there is no real control of the process or real-time monitoring.
7. You have already an RPA solution in place
Your company already utilises RPA (Robotic Process Automation) solutions for specific tasks, but you lack control and knowledge of how they work. In some cases, if the data is not valid, the RPA process stops and you must roll up your sleeves and dig into it yourself to keep the process going.
If you can identify these signs in your journal entry process, your company is probably losing a lot of time and resources on processing and managing a large number of tasks manually. By applying intelligent automation, your company can create, manage, and process journals accurately and fast.
At Aico, we have designed an intelligent automation tool which optimises every step of the journal process. Here is a summary of how Aico solves journal entry related problems.