Draft month-end accrual journals from open commitments
At close, the system collects received-not-invoiced items, unbilled work and recurring expenses, calculates each accrual with its source, and drafts the journal entries. The accountant reviews a schedule instead of building one from scratch. For controllers who rebuild the same accrual workbook every month.
Function: Finance · Industry: Any industry
Draft month-end accrual journals from open commitments
6 steps
At a glance
- Trigger
- The close calendar opens the accrual task for the period.
- Typical inputs
- Open purchase orders and goods receipts
- Contracts and recurring schedules
- Prior-month accrual entries and reversals
- Cut-off date and materiality threshold
- Systems it usually connects to
- NetSuite
- Sage Intacct
- Google Sheets
- Slack
- How the work splits
3 rules, 1 model, 2 person steps
How it runs, step by step
6 steps, each tagged by what does the work. Rules are fixed logic, a model reads or drafts, and a person decides.
- Rules Fixed logic in code
- Model AI reads or drafts, with a confidence score
- Person A named person decides
- 1
Pull the candidates
RulesReceived-not-invoiced lines, active contracts and last month's reversing entries are collected as of the cut-off date.
- 2
Calculate each accrual
RulesAmounts are computed by formula: received quantity times PO price, or contract amount times the period elapsed.
- 3
Explain and flag outliers
ModelA model compares each amount with prior months and writes a one-line explanation, flagging items that moved without a clear reason.
- 4
Review the schedule
PersonAn accountant reads the flagged items, adjusts estimates where the formula is wrong and approves the schedule.
- 5
Draft the journals
RulesApproved lines become draft journal entries with supporting detail attached and automatic reversal dates.
- 6
Post and sign off
PersonThe controller reviews and posts the entries, and the schedule is stored as close evidence.
Where people approve
The decisions that stay with your team, whatever the confidence score says.
- The preparer approves the accrual schedule.
- The controller approves and posts the journals.
- Estimates that rely on judgment are written by a person.
KPIs to track
What to measure, before and after. Targets come from your own baseline.
- 01Hours spent preparing accruals each close
- 02Accrual true-ups found in the following month
- 03Journals posted late or after the cut-off
- 04Items flagged and the share that turned out to be real issues
Questions about this workflow
Can it estimate an accrual when there is no PO?
It can propose one from history, such as the average of the last three months for a recurring service. We label it as an estimate and require a person to confirm, because that is judgment the finance team owns.
Does it post journals directly?
Only draft entries are created. Posting stays with the controller. That keeps the segregation of duties your auditors expect and gives you a clear record of who approved what.
Which steps use rules, a model and a person?
Rules: pull the candidates; calculate each accrual; draft the journals. Model: explain and flag outliers. Person: review the schedule; post and sign off. Rules are fixed logic in code. A model reads or drafts and reports its confidence. A named person decides.
What do we need to start?
Typically: open purchase orders and goods receipts; contracts and recurring schedules; prior-month accrual entries and reversals; cut-off date and materiality threshold. You also need read access to NetSuite, Sage Intacct, Google Sheets and Slack, or the equivalents you use. A workflow audit measures your volumes and past cases first, then gives a fixed price for the build, so you can decide with real numbers.