Automating journal postings in NetSuite is a necessity for businesses aiming to streamline financial workflows and minimize the risks of manual errors. According to research by APQC, firms that digitize their accounts can reduce their closing cycle by up to 50%. In this guide, we explore how Payflows can help your company leverage automation for journal entry processing and optimize your general ledger.
What is NetSuite?
NetSuite is a premier cloud-based ERP platform used by over 28,000 companies globally to enhance their financial services. It integrates crucial financial functions such as general ledger, accounts payable, and more into a single, unified system. This allows companies to automate key tasks like journal entry postings, efficiently managing large volumes of transactions with minimal manual effort, thereby improving the credit management process.
Automation within NetSuite not only streamlines data entry but also ensures that account statements are both accurate and current. This level of automation is reported to save businesses approximately 20-30% in labor costs, according to Deloitte.
Overview of NetSuite's core accounting features
NetSuite offers a robust ERP solution that revolutionizes financial management within organizations. It supports a broad range of accounting activities, including asset management, real-time business analytics, and scalability for growing operations. The platform’s advanced tools make managing data across various sectors more efficient, easing tasks like consolidations, currency conversions, and compliance monitoring. NetSuite's real-time analysis engine also gives companies rapid access to important corporate information, accelerating decision-making and strategic planning.
How NetSuite enhances financial workflows
NetSuite effectively eliminates data silos by merging financial and operational data onto a single platform. This unification provides a comprehensive overview essential for efficient management and growth. It facilitates coherent, automated workflows across departments, reducing errors and increasing overall operational efficiency. Given its ability to handle complex accounting requirements, NetSuite is an excellent choice for companies looking to enhance automation, cut overheads, and boost cost accuracy at every organizational level.
The challenges of manual journal postings
Manually handling journal entries poses various challenges that can slow down the accounting process and increase the likelihood of errors.
Time-consuming processes
Hand-operated journal entries require significant time, especially for larger companies with multiple departments. Sorting, verifying, and typing each transaction manually delays the closing process, often taking 7 to 10 days on average, according to APQC.
Manual errors and poor journal quality
Manual data entry is prone to errors, costing the U.S. economy approximately $3.1 trillion annually due to inaccurate data entries, highlighting the risks associated with hand-operated processing. Stress and tight deadlines often lead to costly mistakes that affect the financial close process.
Approval bottlenecks
Some transactions require approval from different departments before they can be posted to the general ledger. This back-and-forth slows down the journal entry process and often results in missed deadlines or incorrect entries.
Fraud risks
Manual processes increase the risk of fraud, as incorrect registrations or omissions can go unnoticed during the rush to close. For example, Luckin Coffee was fined $180 million in 2020 for accounting fraud linked to improper journal entries.
Posting delays
Before finalizing the accounting reports, all journal entries must be precisely recorded in the general ledger. Delays in this critical step lead to inconsistencies and slow down the overall reporting process.
Benefits of Automating Journal Postings in NetSuite
By automating journal entries with NetSuite, companies can significantly reduce the time and effort spent on manual processes, including bank transaction entries. Automation ensures that entries linked to bank accounts are accurate and reflect in real-time, which is crucial for financial integrity and prompt reporting.
Increased efficiency and accuracy
Automated journal entries reduce errors and speed up processing. NetSuite enables businesses to establish automated workflows that ensure journal entries are posted immediately, saving up to 50% of the time spent on traditional manual processes.
Real-time financial data
With NetSuite, businesses gain access to real-time updates of all financial data, including bank transactions. This immediate availability of comprehensive financial information, including bank account statuses, helps companies make informed decisions swiftly, enhancing operational responsiveness.
Enhanced compliance and audit trails
Automated software like NetSuite creates detailed audit trails for all journal entries, ensuring full compliance with regulatory standards. These trails simplify both internal reviews and external audits, making the process more transparent.
Reduced operational costs
According to IDC, automating journal postings can save 20-30% on labor costs. Computerization reduces the need for a large accounting team and reallocates resources to more strategic areas, like planning and analysis.
Faster accounting closes
On average, businesses that automate their journal entries can close their accounts 25% faster than those relying on manual processes. This accelerated closing schedule allows you to finalize your financial statements without delay, giving management more time to focus on future planning.
How to automate journal postings with Payflows and NetSuite
Here's how you can improve the overall efficiency of your accounting processes by integrating Payflows with NetSuite.
Setting up Payflows with NetSuite
To begin automating journal entries, companies need to integrate Payflows. The setup process is straightforward and allows for immediate synchronization between NetSuite and other funding tools. Payflows ensures seamless data transfer and guarantees that your money transactions are automatically recorded in the general ledger.
Configuring automated journal entries
Once integrated, the next step is to configure automated workflows. NetSuite allows users to set specific rules for how journal entries should be categorized and posted. For example, you can automate accounts payable, intercompany transactions, and even eliminate journal entries for consolidated financial reporting.
Maintaining and monitoring automated processes
Automation requires ongoing monitoring to ensure that journal entries are accurately posted. Payflows offers instantaneous tracking features, enabling companies to monitor the status of their financial transactions. This proactive approach helps identify discrepancies early, allowing businesses to address them before they escalate into bigger problems.
Non-automated entries are prone to errors and delays, but automation offers a solution that speeds up the entire cash closing process.
If your business is struggling with:
- Complex integration setups: this integration ensures that data flows seamlessly between systems, reduces the need for extensive IT involvement, and accelerates deployment times.
- Customization challenges: whether you need to automate accounts payable, manage intercompany transactions or process elimination entries, Payflows enables tailor-made configurations that improve your financial operations without the usual headaches of custom configurations.
- High licensing costs: Payflows offers a cost-effective alternative by not requiring additional licenses for integration. This means you can extend the capabilities of your existing NetSuite system without incurring additional costs.
Then Payflows is the solution to help you streamline your financial workflows. It integrates effortlessly with NetSuite, scales efficiently, and automates your journal postings without needing additional licenses.
Discover how Payflows can revolutionize your company’s accounting processes by visiting Payflows.io today.
Sources:
- APQC (American Productivity & Quality Center) Study on Closing Process Timelines: APQC Research
- The U.S. Economy's Loss Due to Inaccurate Data Entries: IBM Study
IDC on Labor Cost Savings from Automation: IDC Study
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