Automation Potential in: Journal Entries
today's Challenges
A journal entry is the last step in an accounting cycle. It is a record including date, amounts to be debited and credited, transaction description and reference number.
Often seen as a time-consuming burden for many accountants, the process of creating and posting journals has typically been spreadsheet based and has lacked robust controls.
Financial statements often rely on numerous journal entries before they can be completed. Where these journal entries may be substantial, they can easily be entered in the system with errors, which results in inconsistency. When enough of these errors occur, it can become necessary for the general ledger accountant to review all of the entries and make corrections. This is a large task to complete during financial statement closing when time is in short supply.
Automation Impact Evaluation
When it comes to handling journal entries with RPA, the software can remove the weight off from the users when they:
- Update data manually into their Enterprise Resource Planning (ERP) systems; use RPA to automate ERP data entry;
- Gather data from multiple applications and gather them into one place at the end of the day to keep everything organised;
- Process a lot of data where the data is prone to multiple human errors that could cause a ripple effect
Accountants need not worry about the management of detailed journal entries with hundreds of lines or tracking down supporting documentation for approvals.
case Study
Transport equipment supplier
Proservartner worked alongside a global storage and transport equipment supplier who had to reclassify each freight journal entry after customers made credit card payments.
The payment caused the sale to be automatically credited to a revenue account. This meant that employees had to run trial balances for freight revenue accounts, download the reports, read them into a desktop reporting tool, run models, produce and format Excel files, launch macros, and feed the file into the general ledger before the entry was reclassified from revenue to expense.
We were able to build a bot which mimicked the previous process, dramatically shortening the time required and eliminating errors. This created a more standardised process and resulted in higher employee satisfaction.
The company saw a return on their investment in just five weeks and reduced the manual process time by 85%.