Journal entry automation streamlines the financial close process, reducing the time and effort to complete it. Also, journal entry automation software improves accuracy and supports internal controls when closing the books.
Automating the journal entries leads to easier financial reporting at any time, not just at the end of the month. It reduces manual errors while standardising the financial close process, especially for enterprises with subsidiaries, providing real-time visibility of financial close matters.
Journal Entry's Automation Impact on Financial Close Activities
Using software to automate the journal entry simplifies the financial close process and supports regulatory compliance efforts. At the same time, this automation allows quicker identification and resolution of discrepancies during the close process.
Here are the processes it mostly impacts:
- Account Reconciliation: Reducing the number of manual activities, as the entries are processed and balanced automatically.
- Intercompany Transactions: Automated systems handle complex intercompany financial processes, easing data consolidation.
- Regulatory Compliance: Track and document actions taken to ensure compliance with financial regulations..
- Financial Statement Preparation: With more accurate and timely data, the preparation of financial statements becomes faster and more reliable.
By focusing journal entry automation on the financial close process, enterprises can achieve a more efficient, accurate and timely close cycle.
How to Recognise Good Journal Entry Software?
When choosing a journal entry automation solution, you have to focus on functionalities like:
- Pre-Built Templates: Streamlining the data entry process while reducing errors.
- Custom Journal Entry Formats: Enough flexibility to tailor the entries according to the customers’ needs.
- Live Validation for Data Accuracy: Ensuring compliance and correctness for the entries.
- Direct ERP Integration to Avoid File Uploads: Easy data transfer without the struggles of manual file handling.
Most journal entry software relies on cloud-based systems with the ability to match the journal entries during the final close. The automation capabilities also help with the live data analysis, while keeping the entries encrypted and secure. Here are some software recommendations to consider:
1. Aico
Aico.ai offers a comprehensive journal entry automation solution designed to streamline and improve the financial close process for large enterprises. Here are some key capabilities of Aico's journal entry automation:
- Creation and Validation: Aico comes with completely configurable journal entry templates, designed and defined with the customers. It integrates in real-time with ERP systems.
- Automation Features: With Aico, you can automate the creation of recurring journals, provisions and allocations. This solution provides workflow automation for both standard and complex journaling activities.
- Integration and Visibility: Aico offers real-time API integration with many ERP systems, including SAP, enabling monitoring of journal entry processes and bottleneck identification.
These features help your finance team save time and improve the accuracy of the journal entry processes during the financial close cycle.
How does Aico provide comprehensive visibility into the journal entry processes?
This solution comes with real-time dashboards to monitor all journal entries, track tasks and check whether they are running behind the schedule. Aico allows you to configure approvals based on various criteria like journal type or value.
Users can easily access the complete history of changes and approvals for each journal during the financial close. By implementing these features, Aico ensures that finance teams have full visibility into the journal entry process, from creation to posting, enabling better control, quality and efficiency in financial close operations.
2. BlackLine
BlackLine's journal entry process for financial close is designed to automate the creation, validation and posting of journal entries. It offers a centralised dashboard and file-based ERP validation.
Still, there are some drawbacks to consider, especially the cost. BlackLine is more expensive compared to other journal entry automation solutions. Also, the learning curve can be unnecessarily complex, even for expert users.
3. Redwood Finance Automation
Redwood Finance Automation automates the financial close processes with a focus on journal entry automation. It offers centralised journal management, transparent communication and compliance monitoring.
Still, some users face challenges due to limited language support and basic finance features. The initial setup and integration cost may be too high for the limited features this solution offers. Additionally, the learning curve may be too complex for non-IT users, even though the tool is known for its overall efficiency.
4. FloQast
FloQast offers a journal entry management feature that centralises data and automates workflows. It offers integration with a financial close checklist and improves compliance.
While FloQast provides these capabilities, it's limited when it comes to multi-ERP support, automation, and data synchronisation. Also, the financial requests come with lower configurability compared to the other journal entry solutions.
5. NetSuite
NetSuite's journal entry automation is a part of its Financial Close Management solution. It's not finance-dedicated software and offers other tools for seamless workflow management. When it comes to journal entry, NetSuite offers streamlined reconciliation and enhanced compliance.
Still, the complex implementation and potential need for customisation may not be suitable for enterprise-level usage.
6. Cadency by TrinTech
Cadency provides standard journal entry templates that outline the necessary steps for consistency and compliance. It offers ERP integration and centralised information and automation.
Still, the templates aren't flexible and configurable enough to meet the client's specific journal entry needs. Cadency is also limited when it comes to multi-ERP support and real-time capabilities, especially for complex enterprise scenarios.
7. Brightbook Limited
Brightbook Limited is a web-based financial management tool that incorporates journal entry features. It is great for individual users and small businesses who need invoicing features, bank reconciliation and basic financial reporting.
While it is free to use and user-friendly, it is not customisable as the above tools. Compared to the above software, this one is the most affordable but most limited.
Qualities to Seek In a Great Journal Entry Automation Tool
When seeking a journal entry automation software, there are several features and capabilities to consider, especially:
- Integration and Connectivity: Choose a solution that integrates with your existing ERP systems, offering a comprehensive view of all financial close activities.
- Automation: Invest in software that provides automatic creation of allocation and accrual journals, recurring journal templates and rule-based automation for various journaling activities.
- Validation: A functional journal entry software retrieves and validates parameters against your ERP system, minimising errors and improving the overall finance department efficiency.
- Scalable Performance: Choose a solution that grows together with you, just as Aico, created to scale with your enterprise while handling large volumes of journal entries.
Prioritise these features when choosing a journal automation software. Research and compare various features, but choose the one that improves the financial close process with accuracy and precision.
Conclusion
Streamline your financial close process by automating repetitive journal entry tasks prone to human error. The right software integrates with your existing systems, reducing complexity and ensuring a smooth transition without steep learning curves. Investing in a well-designed solution improves the accuracy of financial workflows, resulting in efficient financial close.
