Clive Jefferies

On-demand webinar: Journal Entry Process Management & Compliance

Welcome to the Manual Journal Entry Process Excellence webinar series. In this 2nd part, we are discussing journal entry process management and compliance best practices. The topics include:

  • Replacing emails with smart workflows
  • Connecting multiple legal entities into one view
  • Connecting to your ERP systems in real-time
  • Following journal process via live dashboards
  • Enforcing custom compliance rules through-out all group companies
  • Dynamically vary journal approvals based on value and/or team member roles

 

Watch the webinar:

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What are the challenges of journal entry process visibility?

Although you may have automated some journal entry tasks, you probably still do not have very good process visibility. Also, solutions such as RPA make it even more important to be able to see and follow how the robots are working and coordinate the manual work before and afterwards to avoid bottlenecks and errors that take time to go back and fix. Relying too heavily on emails makes it easy to lose track of current journal status such as how many and which journals are:
  • Waiting to be posted • Missing supporting evidence
  • Waiting for someone’s approval
  • Rejected due to insufficient supporting evidence or an error
  • Approved and posted to the ERP system
  • Due within current period end close

Without better visibility into each stage of the process, it’s difficult to measure the efficiency of the entire process and identify bottlenecks. Consider how a lumberjack uses machinery to get into the perfect position, efficiently cut down the tree, easily load the timber onto the machine and transport it away. Focusing on streamlining only one part of the journal process is like only focusing on how to cut down the tree without considering the work before and after like transporting the timber away.

 

What are the challenges of journal entry compliance?

Without the capability to enforce specific rules, how will you know if they are even being followed? It can hurt your department’s efficiency if it takes more effort than it should to verify compliance with corporate policies. This could also make it harder to prevent and detect material misstatements and fraud. But the stakes are even higher if you are subject to stock exchange rules and regulations governing journal entries. And if you aren’t listed today, what if you become listed in the near future?
Some of the key rule types that are difficult to enforce without centralised compliance functionality include:

  • Segregation of duty rules
  • Journal approval rules
  • Supporting evidence rules
  • Journal data protection rules
  • Audit trail rules

For example, how do you prevent the same person from creating, posting and approving a journal in practice? How will you know whether approval rules based on journal value are followed? And how do you make sure the supporting evidence is always there and correct?

 

FURTHER READING:

Roadmap to manual journal entry process excellence

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