April 22, 2024
PJ Johnson
In the pursuit of modernizing accounting processes, one critical area often overlooked is the time-consuming task of manual journal entries. Despite significant advancements in other aspects of the financial close, journal entries remain a labor-intensive process filled with potential errors and fraud risks.
Why do manual journal entries continue to present challenges for finance and accounting (F&A) teams? The answer lies in the sheer volume of manual processing work involved and the ever-evolving regulatory landscape. Manual journal entries not only prolong reporting cycles but also increase complexity, leaving organizations vulnerable to errors and compliance issues.
Furthermore, in today's fast-paced business environment, finance teams are under increasing pressure to provide financial information faster to drive business decisions.
However, according to a recent survey by BlackLine, over half of finance professionals are not entirely confident they can identify financial errors before reporting results. This lack of confidence underscores the need for improved timeliness and accuracy in financial data and journal entries.
Modernizing journal entry processes presents a significant opportunity for organizations to transform the foundation of their financial reporting processes. By automating repetitive tasks and leveraging intelligent controls, finance teams can reduce the risk of errors in the general ledger and free up valuable time for strategic analysis and decision-making.
According to EY, top-performing companies with modernized journal entry processes have significantly fewer manual entries and lower personnel costs. The potential for automation is staggering, with over 70% of journal entries ripe for automation.
By embracing automation, organizations can not only save time and labor but also significantly reduce fraud risk.
1. Targeted Automation: Identify specific repetitive tasks within the journal entry process and automate them using standard business rules and logic. Start by examining areas such as system-to-system processing, allocations, cash settlements, and intercompany transactions.
2. Intelligent Controls: Implement segregation of duties and approval routing to eliminate fraud risks and ensure compliance. Embedding control attributes within standard journal templates can enable a more compliant process, while SaaS-based financial close management tools provide a structured preparation, review, and approval process with a robust audit trail.
3. Centralized Information: Store all documentation and policies within centralized templates for easy access and auditability. Role-centric auditor permissions provide visibility into reviewed items, enabling a self-service model for obtaining supporting documentation and testing controls.
4. Continuous Accounting: Shift from a traditional record-to-report approach to continuous accounting, allowing for more balanced processing throughout the period. This approach frees up finance and accounting professionals to focus on high-value tasks, such as open item analysis and balance sheet reviews, rather than being bogged down by manual data entry.
BlackLine's Journal Entry solution streamlines the entire process by automating standard, data-driven journals and reducing the volume of manual entries. With automated journal entries, real-time workflows, and flexible templates, accountants can focus on analysis and strategic contributions rather than data entry.
By reengineering journal entry processes in the cloud, organizations can boost efficiency, empower finance teams, and enable agile financial operations management. With BlackLine, the focus shifts from accounting for the balance sheet to accounting for business performance and value.
Ready to unlock efficiency and streamline your journal entry process? Discover how BlackLine can transform your financial close today:
Re-engineer Your Processes in the Cloud: BlackLine enables process automation and standardization, allowing organizations to boost their bottom line and reallocate valuable resources to strategy and analysis.
Empower Finance in a No-Code Environment: Deliver digital innovations more quickly in a no-code environment owned by your organization. Our cloud-first solution is powered by open APIs—meaning real-time, two-way integrations with ERPs.
Enable Continuous Accounting: Deliver real-time analysis and intelligence at the point of need. BlackLine's journal automation enables agile business operations, increasing the efficiency of your financial data so F&A teams can move beyond manual work.
The most efficient and responsive F&A teams are consistently looking ahead, not backward. By embracing automation and modernizing journal entry processes, organizations can rid themselves of the month-end headache, reduce risk, and build sustainable processes into the close.
Accounting journal entry automation is critical to reducing the time and risk associated with the financial close and enabling finance teams to focus on strategic analysis and value-added activities.
Interested in learning more about how your organization can embrace journal entry automation? Check out our comprehensive guide on how BlackLine gets it done.
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