{"id":1576,"date":"2014-05-28T20:06:39","date_gmt":"2014-05-28T20:06:39","guid":{"rendered":"https:\/\/www.peeriosity.com\/shared-services\/articles\/?p=1576"},"modified":"2022-05-12T09:05:38","modified_gmt":"2022-05-12T09:05:38","slug":"rethinking-the-review-process-for-manual-jv%e2%80%99s","status":"publish","type":"post","link":"https:\/\/www.peeriosity.com\/shared-services\/articles\/2014\/05\/rethinking-the-review-process-for-manual-jv%e2%80%99s\/","title":{"rendered":"Rethinking the Review Process for Manual JV\u2019s"},"content":{"rendered":"

While there are many benefits to implementing integrated software systems and bolt-on technologies, significant performance improvements are often possible from a direct inspection and redesign of underlying work processes.\u00a0 <\/span>While it\u2019s never a good idea to automate a bad process<\/a>, it\u2019s always a good idea to formally review process steps on a regular basis to capture quick wins by eliminating costly work steps and bottlenecks. <\/span><\/p>\n

The accounting close<\/a> is a work process that happens frequently (typically every month), requiring significant resources.\u00a0 <\/span>It is also a work process that is difficult to benchmark because of industry and company-to-company differences.\u00a0 <\/span>No matter how diligent you are it\u2019s hard not to end up comparing apples with oranges.\u00a0 <\/span>Rather than completing a complex benchmarking exercise that yields questionable results, at Peeriosity members can explore discrete differences in design using a capability called iPollingTM<\/sup>, allowing them to quickly canvas leading companies to create a clear picture of design alternatives.\u00a0 <\/span><\/span><\/p>\n

Recently a Peeriosity member used iPollingTM<\/sup> to explore how companies were reviewing manual journal vouchers (JVs).\u00a0 <\/span>The results were strikingly bi-modal, with companies either reviewing all, or almost all, JVs prior to the periodic accounting close; or they were reviewing less than half, or none of the JVs prior to the periodic close.<\/span><\/p>\n

Here are the details:<\/span><\/p>\n

\"ipolling<\/p>\n

Many of the responses included additional comments to help clarify the member\u2019s response selection.\u00a0 <\/span>Here are some of the comments, preceded by the response choice selected:<\/span><\/span><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Response: None \u2013 a back-end process is in place.\u00a0 <\/span>We rely on system access controls and a robust account reconciliation process versus reviewing or approving all manual entries.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Response: 90% to 99%.\u00a0 <\/span>We may not always get to review manual JVs prior to entering them in the system; however, they are always reviewed shortly thereafter.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Response: 100%.\u00a0 <\/span>We view this as a key control element and we conduct reviews to ensure that it happens in line with our standards.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Response: 100%. Currently 100%; however, we are in the process of implementing a systemic workflow process for approval<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Response: Less than 50%.\u00a0 <\/span>We have a review and approval process on all manual JVs over 250K USD entries prior to the close of the ledger, and after close, the review takes place as a part of the balance sheet reconciliation process.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Response: 50% to 59%.\u00a0 <\/span>All journals are reviewed prior to results being finalized by Group although the reviews take place at various points prior to this.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Response: Less than 50%.\u00a0 <\/span>We review specific high-risk JVs prior to closing the ledger. After closing the ledger, JVs above a set dollar amount are reviewed. All remaining JVs are reviewed on a sample basis.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Response: Less than 50%.\u00a0 <\/span>We apply a manual JV approval process, where depending on the entry amount we will have a review completed by a team lead, a manager, and\/or a director.\u00a0 <\/span>For recurring low-risk JVs we define a pre-approval process to eliminate the need to review individual JVs.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Response: Less than 50%.\u00a0 <\/span>We review about one-third of all manual JVs prior to the close, and we also use a back-end review process.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Response: None – a back-end process is in place.\u00a0 <\/span>We have a very standardized Close process so all JVs are approved after the Close. Unusual JVs are discussed prior to posting but still approved after the close takes place.<\/span><\/em><\/p>\n

What process does your company follow to review manual journal vouchers prior to the periodic accounting<\/a> close?\u00a0 <\/span>What opportunities do you have to stream and improve this part of the close process<\/a>?<\/span><\/p>\n

Who are your<\/em><\/span> peers and how are you collaborating with them?
\n<\/span><\/p>\n

_____________________________________________________________ <\/span><\/span><\/sup><\/p>\n

\u201ciPollingTM<\/sup>\u201d is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility to all respondents and their comments. <\/span>Using Peeriosity\u2019s integrated e-mail system, Peer MailTM<\/sup>, members can easily communicate at any time with others who participate in iPolling. <\/span><\/p>\n

\u00a0<\/span><\/p>\n

\n

Peeriosity members are invited to log into <\/span>www.peeriosity.com<\/span><\/a><\/span> to join the discussion and connect with Peers.\u00a0\u00a0 <\/span>Membership is for practitioners only, with no consultants or vendors permitted.\u00a0 <\/span>To learn more about Peeriosity, <\/span>click here<\/span><\/a><\/span>.\u00a0<\/span><\/p>\n<\/div>\n

<\/span><\/span><\/span><\/p>","protected":false},"excerpt":{"rendered":"

While there are many benefits to implementing integrated software systems and bolt-on technologies, significant performance improvements are often possible from a direct inspection and redesign of underlying work processes.\u00a0 While it\u2019s never a good idea to automate a bad process, it\u2019s always a good idea to formally review process steps on a regular basis to […]<\/p>\n

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