Automation of Journal Entries: A must or Good to have?​

Swapna Maheswaran
Content Creator

6 min read | Mar 22, 2022

blog 6


How are you processing your Journal Entries? Using spreadsheets? Good. Spreadsheets are a proven, fail-safe methodology to organize and process Journal Entries. They aid greatly in collating and cumulating the entries. But wait…what year are we in? And what is the volume of your business? Are we talking about thousands of journal entries? 

When the volume is around a few thousand journal entries in a month, efficient management of the entries can be regulated only by a standardized workflow. Unfortunately, spreadsheets are primitive, with minimal cognizance when it comes to approvals, adjustments entry, and accounting. A standardized workflow, on the other hand, can handle complex approvals and adjustments seamlessly. Also, Accounting and Finance teams have their own sub-chains with such intelligent workflows.

With Spreadsheets, you must have experienced a complicated comprehension in case of adjustments due to lack of visibility across your stack. What if we were to tell you that automation of journal entries flawlessly bridges adjustments because of its highly transparent nature? Additional Plus: High transparency translates to clearer visibility and hence simplified auditing.

Does your business process handle multiple levels of approvals? Experienced the latency while changing predefined approval chains? Well, that is to be expected with a simple workflow employing a spreadsheet. Journal Entry Automation cuts out this latency and enables your business process to handle complex approvals on a dynamic basis. Missing out on deadlines because of the unpredictability of the performance of your spreadsheets? Unable to assert quality indirectly because of inefficient performance? High time to put a hard stop and start with automating journal entries. Automation simplifies day-to-day processing as it accounts for consistency in performance, leading to keeping up on timelines and indirectly emphasizing quality.

Cut on Time and Efforts wastage:

Journal recordings are crucial processes for businesses. If you are running a larger business, journal entries into an ERP system like SAP will be tedious. Businesses hire a lot of finance professionals to handle this problem. The issue that fails to get recognized is the mundane nature of work, and in general prone to errors. Journal recordings are crucial processes for businesses. If you are running a larger business, journal entries into an ERP system like SAP will be tedious. Businesses hire a lot of finance professionals to handle this problem. The issue that fails to get recognized is the mundane nature of work, and in general prone to errors.

Companies, in general, fail to understand the requirement of an integrated solution, which can seamlessly automate this process. A journal posting done in an ERP like SAP has a series of steps that encircles extractions, validations, approvals of transactions and then posting it to SAP. Say for example, after getting approval, if the postings fail in SAP, then it must be done from scratch again. This mundane nature and errors account for a lot of time and effort of employees.

Businesses fail to realize the 50% savings in time and effort, without giving automation consideration. A completely streamlined automation system with proper workflows can enhance the entire journal entry automation process

No More Expenditure Overflow

The cost of bots increases abruptly when the requirements increase as well. Thereby, contributing a huge expenditure. On the other hand, businesses consider risk factors for automating highly sensitive business processes, say journal entry automation. Since journal entry automation is crucial for finance teams, the risk factor is stopping businesses from automating them.

But there are solutions that can optimize risks and accelerate journal entry automation at 10x speed & accuracy. But still, businesses are a few steps behind, when it comes to high-level business automation. Ultimately, using creative human resources to take care of the mundane tasks in important teams like finance. Thus, contributing to more expenditure and with less return on investment.

Automating piecemeal tasks is believed to give a huge return on investment, which doesn’t bear benefits in the long run. When automating simple business processes, the ROI yield is in meagre terms. Since businesses are spending more on automating simple tasks, making no difference when compared to their respective competitors. Speaking in technical terms, the infrastructure cost doesn’t seem to come down.

Complicated Finance Monitoring - No thanks!

Larger companies make the mistake of maintaining a messy database. The financial data, the journal entries are maintained in excel sheets usually in larger volumes. Businesses usually end up confused when trying to find out the proper approval authority. With so many emails reaching an individual’s inbox, approval emails gets lost easily. Often, they fail to identify the status of journal postings in ERP like SAP, due to the lack of proper monitoring.

So, what is the issue? They lack a system that can reflect the entire journal entry operation happening in an ERP system. This can help understand the number of journal entry postings, the approval workflows, and much more. There are challenges with such automation systems too. One important challenge with the automation system is the strong integration with the ERP system. A solution that can optimize these challenges will help reap more benefits.

Dreading Financial closures? No more

  With a large business encompassing multiple ERP systems and accounting systems, to bring a ‘clean’ financial close, the manpower involved in Accounting and Finance must collate information across departments, identify and rectify issues, ensure that all transaction entries are tracked and tallied, assert accuracy and assure quality. This so-called book balancing is certainly tedious, time-consuming, and prone to stress and overstretching of manpower.

Large businesses have been failing miserably at understanding how a “fast and clean” Financial close could improve organizational performance. Analyst Hackett Group’s study of the financial close showed that top performers close their ledgers earlier than their peers and complete the process in less time, allowing them to use their resources to do analysis and channel their financial executives’ support for fact-based decisions.

Not any automation, but an automation solution that offers a tight coupling amongst multiple ERP systems will be the ideal solution for achieving a fast and clean close. Large businesses and organizations have to decide and rationalize on the offering of such a boon to finance and accounting resources and empower them to be influencing decision-makers.

Balance sheets reconciliations – Realize it right!

Reconciliation of balance sheets may be the responsibility of the finance and accounting departments. But the true realizers of benefits from a properly reconciled balance sheet at the end of a reporting period are the Business owners and decision-makers. This is because this information is used by outside advisors for making informed decisions on investments, insurances, and bank credits, etc. A transparent, accurate, and trustable creditworthy establishment is the defining cornerstone for potential investors for a business.

For transparency, trackability of assets and inventories is essential. For accuracy, regular audit and financial reports and inventory tracks are a must. And for trustworthiness, the perfect choice and justification of accounting processes are necessary. Over the years, most large businesses have come to realize how easily this can be achieved by addressing the issues at the base level. The solution: Automation of Journal Entries. The right choice of an automation solution that provides transparent, accurate, and trustworthy results is the need of the hour for many large organizations.

Now that you have a clearer insight into the schematics of journal entry processes and how they influence the organization on a macro level, it would only be right to let you decide. Automation of Journal Entries: A must or Good to have?

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