I don’t like journal entries!!! So, it was nice to recently hear a partner in a prominent auditing firm here in Georgia express those same sentiments (except I believe she said “hate”) as it makes the auditing more difficult. Sure, in our software, you can attach supporting documentation to the journal entries (OpenRDA is heavy on integrated document management features). But, that’s actually more work for you (and the auditor).
We believe in keeping corrections in the source module (i.e., a voucher coded to the wrong account code can be reclassified to a different account code directly from the incorrect voucher; receipt accruals are reclassified to the prior fiscal year directly from the receipt record, resulting in proper accounting for the revenue/expense as well as for cash; distributions, when feasible, can also be “undone” so that the coding can be corrected and the record redistributed). Bottom line, by looking at the vouchers that make up a check (or transmittal), you get a true picture (without always having to review journal entries to see if changes were subsequently made; what a hassle for you, your auditors, and account managers).
Of course, we can’t do away with journal entries as they are necessary for budget amendments and for cost allocations. And, we don’t (yet) have a process for reclassifying a payroll expense to different account codes so that it stays in the source module (unless it is the most recent payroll).
So, the next time when you say “Oh, I’ll just correct it with a journal entry,” think about using the processes that we have in place so that the corrections can stay with the source (module). It will definitely make your job easier in reporting and querying. And, it will make your audit go smoother.
Phyllis
pdflowers@openrda.com
