Journal Entry Approval

A journal entry moves amounts between ledger accounts, and manual entries can correct mistakes, record accruals or make period-end adjustments. They can also introduce errors or conceal improper transactions if no one checks them.

Approval creates a second look, in which the reviewer checks the business reason, account coding, amount, date and supporting evidence, because a click without examination does not fulfil the purpose of the control. A sound workflow distinguishes preparation, review and posting, and in some systems an approved entry posts automatically while in others a separate person posts it.

Document the actual sequence rather than assuming the software's label proves the control worked. Sage Intacct describes a configurable approval process before posting, with approver assignments and optional settings that permit a submitter to approve their own entry, which shows why a business must examine its configuration, not just enable a feature.

Segregation of duties reduces the risk that one person creates and approves a questionable entry, and small teams that cannot separate every role can use an owner or outside reviewer to perform an informed compensating review. Set a risk-based scope, such as independent approval for all manual journals or thresholds and special rules for sensitive accounts, since a small amount posted to a related-party account may still deserve scrutiny.

Avoid a blanket exemption for recurring entries, because a template can be correct one month and wrong after circumstances change, so define who reviews the template, input data and periodic reassessment. Evidence should support the entry: a payroll accrual may need a calculation and payroll report, while a reclassification may need a clear trail to the original posting.

Check timing as well, because approval before posting can prevent an error from entering reports while post-entry review may detect it later, and the process should specify deadlines and escalation for urgent period-end adjustments. Access rights matter, since an approver who can also change the entry after approval or override the workflow weakens the check, so monitor administrative privileges and unusual bypasses.

Keep an audit trail with the preparer, reviewer, date, entry ID, supporting documents and any changes after rejection, because email approval without a link to the final posted version can leave doubt about what was actually reviewed. A rejected journal needs a clear correction path in which the preparer revises and resubmits it and the system shows whether a fresh approval was obtained, since silent edits after approval defeat the purpose.

Review journal populations for completeness too, because a report of approved entries alone does not reveal manual entries posted outside the approval route. A compliance percentage can monitor process health, but it is not proof of accuracy, since two hundred approved entries may still include a wrong estimate if reviewers lacked context.

Escalate unusual entries such as large round numbers, late postings, entries to suspense or revenue accounts and repeated reversals, with risk rules that fit the business rather than a mechanical list. For a finance leader, approval is a practical check on the integrity of the books that works when reviewers have authority, time and evidence, and when exceptions are investigated rather than waved through.