Journal Entry Visibility – A Critical piece of the financial close process
There are thousands of journal entries (JEs) managed by corporations every close cycle across countries and shared service centers. This is important because these journal entries can make small or large changes to the P/L and balance sheet information that companies use to report to management, public markets, auditors and others. Errors in these financial reports can result in poor business decisions, enabling fraud or other very negative business outcomes.
Journal entries frequently require complex workflows for routing and approval prior to posting and often the biggest struggle you face around journal entries is the lack of visibility into the process. Not only does Cadency Journal Entry make it easier to create those workflows, but also ensures company policies for journal entries are being followed. Now, Cadency is bringing you more visibility into your journals and the ability to set time limits for approvals, so not only can companies rest assured journals are being approved and posted on time but also that there is reduced risk by ensuring there are not any misstatements due to journals not being posted on time and their isn’t a lack of visibility into these journals.
Visibility into Overdue Journals is a part of Cadency’s System of Controls that helps facilitate automation by displaying and providing the ability to set approval time limits for journals. Visibility into overdue journals increases the reach of your System of Controls into your System of Automation because it expands visibility into journals that have not been posted on time, which helps facilitate a faster time to close.
Benefits of Cadency Journal Entry
Many companies have SLA’s (service level agreements) and in order to ensure they are meeting those SLA’s, they must ensure journal entries are being posted on time. Here is an industry use case:
A company has requirements to approve all journals within 24 hours receipt to ensure there are no bottlenecks in the close process. With this feature, the admin is able to configure templates with the time limit for a journal to get approved once it’s been received by an Approver. Admins can not only set the limit for these templates, but they can also have visibility into these late journals through the admin dashboard further reducing risk and saving time.
A journal entry Approver at month-end can at times get hundreds of journals to approve and can lose track of which ones need immediate approval. Receiving an email notification and a dashboard reminder into which journal needs your immediate attention ensures the journals that need to be approved sooner are visible increasing the efficiency and effectiveness of the process.
- New option on the “Template Configuration” page to enable late notifications and to choose the time limit an Approver has to approve the journals
- Once the Approver receives the journal for approval the timer starts, and they must approve in that time
- When the time limit has been reached an email reminder is sent to the Approver
- A new column on the dashboard “Approval Status” will populate with “Late” when a journal is late in getting approved
This Cadency functionality decreases overall financial risk by helping ensure SLA’s are being enforced per policy and the journals are approved on time. The efficiency gained by bringing visibility to Approvers and Admins into late journals decreases time to close and prevents any intercompany bottlenecks.
For more information on how Cadency can transform your Office of Finance, contact us.
Written by: Muna Syed – Product Owner, Trintech