Journal Entry Checklist

Identify whether this is an accrual, deferral, reclass, depreciation, or correcting entry. The classification drives whether a reversing entry is needed next period and which lead schedule the AJE ties to.

Attach the source documentation: vendor invoice, payroll register, depreciation schedule, amortization roll-forward, or bank statement. Recurring AJEs (rent prepaid, insurance amortization) should reference the underlying schedule, not be re-derived from scratch.

Memo states the business purpose in one or two sentences — what is being recognized, why now, and which schedule it ties to. "Plug to RE" or "per discussion" is not a memo and will be kicked back at partner review.

Tie each line to the underlying invoice, register, or schedule. For accruals, confirm the cut-off — only the portion of expense earned through period-end belongs in this entry.

Pull the chart of accounts and confirm each debit and credit hits the correct GL number, class, location, and department. A common error is posting to a parent account when a sub-account exists, which breaks departmental P&Ls.

Foot the entry. Most ERPs (QBO, Xero, Sage Intacct, NetSuite) block out-of-balance posts, but spreadsheet-prepared entries imported via journal upload can break if a row is dropped during paste.

Accruals and deferrals typically reverse on day 1 of the next period. Set the auto-reverse flag in QBO / Sage / NetSuite so the entry doesn't have to be manually unwound. Depreciation and reclass entries do not reverse.

Confirm capitalization thresholds, revenue recognition timing under ASC 606, and lease treatment under ASC 842 where relevant. Entries that cross policy thresholds (large accruals, write-offs, asset reclassifications) need explicit policy citation in the memo.

Entries above the firm's materiality threshold (commonly $5K-$25K for SMB engagements, set per client) require partner sign-off rather than manager approval. Below threshold, the second-reviewer process is sufficient.

For clients with ICFR documentation, confirm the entry maps to a key control (typically JE-01 manual journal entry review, JE-02 segregation of preparer and approver). Audit teams sample these at year-end; a missing control mapping is a deficiency.

Segregation of duties: the preparer cannot also be the approver. Route through Karbon, TaxDome, or the firm's review queue. The reviewer ties amounts to workpapers, confirms account coding, and signs off in the workflow tool.

Material entries require partner or controller approval before posting. Capture the digital signature in the workflow tool — wet signatures on printed JEs are no longer accepted by most reviewers and create friction at audit time.

Resolve any review notes before the entry posts. Common notes: missing memo detail, wrong sub-account, accrual amount not tied to register, reversing flag missing. Re-route to the reviewer once cleared.

Post in the correct period. If the period is already closed in QBO / Xero / Sage, the entry must either be posted to the next open period or the close password must be temporarily lifted by the controller. Don't backdate without documenting the close-reopen.

Pull the working trial balance after posting and confirm the affected accounts moved by the expected amounts. Update the lead schedule so the workpaper trail stays current.

Run the GL detail for the affected accounts and confirm: correct date, correct period, no duplicate post, reversing flag set if applicable. A duplicate-post check catches the most common posting error — accidentally hitting submit twice on a journal upload.

Never edit a posted entry in place — the audit trail breaks. Prepare a correcting JE that reverses the bad post and re-records the correct amounts, with a memo referencing the original JE number.

If the original entry already flowed into a delivered financial package or tax return, flag the controller immediately. The correction may require restated financials or an amended return, not just a quiet reclass.

File the entry, supporting workpapers, memo, and approval signatures in SmartVault, Suralink, or the firm's document management tool. Use the firm's naming convention (client / period / JE-number) so audit selections can pull the package in seconds.

Add the entry to the period's journal entry log with JE number, amount, accounts touched, preparer, approver, and reversing flag. The log is what the audit team will sample from at year-end — keep it complete in real time, not at year-end.

IRS recordkeeping for supporting documentation is typically 7 years; some states require longer for certain entry types. Confirm the document management tool's retention policy is set on the folder before closing the run.