What is a journal entry?

A journal entry is a record of a financial transaction in the general ledger (GL). Every journal entry has at least two lines – a debit and a credit – that must balance. Journal entries translate business events like sales, payments, expenses or adjustments into the language of the ledger.

Journal entries can be created manually by a staff accountant or automatically by the enterprise resource planning (ERP) system from transactions like vendor bills, sales orders and bank reconciliations. In NetSuite, most routine transactions create journal entries automatically. Manual entries are typically reserved for adjustments, accruals, reclassifications and corrections.

Why journal entries matter

Let’s say someone reviewing the trial balance before close finds $8,200 sitting in a suspense account. The payment was recorded, but it was posted to the wrong GL account. Until someone corrects it with a journal entry, the expense is wrong on the income statement and the suspense account still carries the $8,200 balance. The financial statements are technically complete, but not accurate.

Without accurate journal entries, the GL doesn’t reflect reality – and every report, dashboard and financial statement built from the GL inherits the error. With disciplined journal entry practices, the ledger stays clean and month-end close is mostly reviewing entries for accuracy.

How journal entries work

Every journal entry in accounting contains five components.

1. Date: This is when the transaction occurred or the date the entry is posted. These may differ for accruals and adjustments.
2. Accounts: It usually includes at least one debit account and one credit account.
3. Debits and credits: Total debits must equal total credits for the entry to balance.
4. Description or memo: Here’s where someone can include a brief explanation of the transaction.
5. Supporting reference: Typically an invoice number, PO number or bank statement line – the source document that substantiates the entry.

Here’s a journal entry example for recording a $5,000 office rent payment:

• Debit: Rent Expense – $5,000
• Credit: Cash (or accounts payable) – $5,000
• Memo: “July 2026 office rent, invoice #R-0712”

Adjusting journal entries vs. standard journal entries

Standard journal entries record routine sales, purchases and payments as they occur. Adjusting journal entries are posted at period end to correct or update the GL before financial statements are prepared.

Common adjusting entries include expenses incurred but not yet billed, payments received but not yet earned, depreciation, prepaid expense amortization and bad debt provisions.

Adjusting entries are where most close-related errors live because they’re manual, judgment-based and often the last entries posted under time pressure.

Why teams struggle with journal entries

Routine journal entries are straightforward, but problems tend to pop up then manual processes can’t keep up with volume and complexity.

• Manual entries don’t scale. A multi-entity business posting accruals, reclassifications and intercompany eliminations across subsidiaries generates dozens of manual entries per close.
• Coding errors create downstream corrections. A vendor bill coded to the wrong GL account produces a journal entry that’s technically balanced, but factually wrong. The correction requires a reversing entry plus a new entry, doubling the work.
• Adjusting entries lack supporting documentation. A manual accrual posted at close may not have a source document attached. Auditors flag unsupported entries, and the team spends time reconstructing the rationale months later.
• Recurring entries are set up and forgotten. A monthly depreciation entry or amortization schedule runs automatically until the underlying asset changes and the schedule isn’t updated. The entries keep posting at the old amount.
• Intercompany journal entries multiply with entity count. Every intercompany transaction requires matching entries in both entities. Manual coordination between subsidiary accountants creates timing mismatches and elimination errors at consolidation.

How teams improve journal entry accuracy

Improving journal entry accuracy means automating bank reconciliation, the routine entries and tightening the controls around manual ones.

1. Automate transaction-based entries: Let the ERP generate journal entries from vendor bills, sales orders and bank reconciliations. You don’t need to re-key what the system already knows.
2. Require memos and references on every manual entry: Enforce a documentation standard so no entry posts without an explanation and a supporting document.
3. Use recurring entry templates for predictable postings: Depreciation, amortization and allocations can be configured once, reviewed monthly and adjusted when the underlying data changes.
4. Review adjusting entries before they post, not after: Build an approval step for manual entries above a dollar threshold or in sensitive accounts like revenue, intercompany and suspense.
5. Reconcile the accounts that journal entries feed: A clean journal entry is only useful if the account it posts to is also reconciled.

How ZoneReconcile reduces manual journal entries for NetSuite teams

Many manual journal entries exist because the upstream process wasn’t automated. ZoneReconcile reduces these by automating transaction matching inside NetSuite, so fewer discrepancies need manual journal entry corrections.

Zone’s automatic reconciliation capabilities empower teams to:

• Auto-match bank transactions to GL entries: Clean matches clear without manual journal entries and exceptions route for review and correction in one step.
• Handle exceptions with audit trail: When an adjusting entry is needed, the reconciliation context – what didn’t match and why – is already documented on the NetSuite record.
• Connect to banks automatically: Bring banking statement data from 12,000+ global institutions directly into Netsuite.