We listed the main processes of General Accounting as an outsourcing group.

JE’s / Journal entries – a term very familiar to accounting students. But why for outsourcing companies, and as an outsourcing process?

Well, Journal entries form a great candidate for outsourcing. Every month, there will be some standard entries which will have to be passed. Some correction entries will always be mandated. Though some of these entries can be scheduled, like annuity payments / payments etc. to be made each month, or regular debits / credits to each account, but quite often the entries will need a validation and approval before being passed, or the amounts may need validation / change.

Let us say conveyance allowance may need to be provided for field employees, which could be a fixed amount or may need to vary based on the quantum of travel.

This is just one example.

The key steps in the process would be:

  • The accounting group of the client / principal will decide on all month end entries for accrual / payment / receipt
  • They will provide a schedule initially to the outsourced / back office unit
  • They will provide updates each month
  • The back office unit will review the requirements
  • In limited cases, they will validate the amounts with the client employees / related authorizers
  • They will verify the entries in the system
  • They will run the scheduler to pass the entries
  • In limited cases, they will manually make the JE entries through the relevant ERP module

And of course, this becomes an ongoing activity.

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