Who should post manual journals in an agency's books
Who in an estate agency should post manual journals, how to separate posting from approving, and a monthly routine for the principal to review them.
By Achekam · · 5 min read · For Real estate businesses in South Africa, Nigeria, Kenya
Most of an agency's bookkeeping happens without anyone typing a debit or a credit. Invoices for commission post themselves, bills post when they are approved, bank lines are matched. The manual journal is different. It is the one place where a person chooses both sides of an entry by hand and writes their own explanation.
That makes it powerful and risky at the same time. Month-end accruals, the reclassification of a cost booked to the wrong account and the correction of an opening balance all need it. So does anyone who wants to make a shortage disappear or move income from one period to another. The question for a principal is not whether journals should exist, but who may post them and who looks at them afterwards.
Why journals deserve special attention
An ordinary invoice has a customer, a document and a trail behind it. A manual journal may have nothing behind it but its narration. If something is wrong in an agency's books, whether an honest mistake or a deliberate cover-up, the manual journal is often where it is hiding.
Investopedia is candid about the limits of any control system: internal controls provide only reasonable assurance of a company's financial accuracy, and they can be undermined by management override and by collusion between employees. Journals are the natural tool of an override, because they can change any account without a document. ACCA lists arithmetic and accounting controls, such as reconciliations and trial balances, among the common control procedures; reviewing journals is how those controls catch what an override leaves behind.
Separating the person who posts from the person who approves
AccountingTools advises that the ability to create journal entries should be separate from the authority to approve them. Its explanation of segregation of duties sets out why: when different people handle the steps of a process, no one person can both commit and conceal an error or a theft.
In an agency, a workable split usually looks like this:
| Role | Prepares journals | Approves or reviews journals |
|---|---|---|
| Bookkeeper or office administrator | Yes, with a supporting note | No |
| Outside accountant | Yes, at month end and year end | Reviews the bookkeeper's entries |
| Principal or financial director | Rarely | Yes, every month |
AccountingTools also notes that segregation of duties is harder in a smaller organisation with too few people, and that spreading tasks across too many people can slow everything down. An agency with one bookkeeper cannot split the work five ways. What it can do is make sure that every journal the bookkeeper posts is looked at by someone else soon after, and that the bookkeeper is not also the person who reconciles the bank.
Treat that review as the agency's own routine, written into its procedures and run by a named person, rather than something left to a setting in the software. The system's part is to refuse the obvious errors, keep the record durable and make the review possible.
What the system refuses on its own
Some mistakes never reach the ledger. In Achekam a business can post manual journals, but an unbalanced journal, or one dated in a closed month, is refused. A posted journal is corrected only by a reversal, so a wrong entry cannot be quietly edited away: the original and its correction both stay in the books. The article on correcting a posted journal explains why that matters.
The closed-month rule carries real weight. Months can be soft-closed, hard-closed and locked, and a closed month refuses postings from every source. Reopening a hard close needs a second approver. Before a month is closed, the screen checks that the ledger balances and that no posting suggestions, unposted bills or unmatched bank lines are waiting. So once the principal has reviewed a month and it is hard-closed, nobody can slip a journal into it later without a second person agreeing.
Reviewing what was posted
The general ledger lists every posted line, and the trial balance shows each account for all time, for a period or at a date, and says whether debits equal credits. That is the raw material of the review.
Things worth looking for in an agency's journals:
- journals that move income between periods, especially near a year end;
- entries to the commission income or agents' commission accounts that did not come from an invoice or a payroll run;
- anything touching the bank or trust-related accounts that was not a bank match;
- journals posted by someone who normally does not post them;
- narrations that say "adjustment" or "correction" and nothing more;
- round amounts with no supporting document.
A journal without a sensible narration should go back to its author for one. If the agency's chart of accounts makes it hard to see where commission and letting income sit, tidy it first; see an estate agency chart of accounts.
Giving the outside accountant the right access
Many agencies have an accounting firm that posts year-end adjustments and reviews the books. In Achekam, what the firm's people can do in the business's books depends on the access level they are given. Bookkeeping access covers the accounting but not the business's users, settings or payment gateways. Review access is read-only.
That gives the principal a simple choice:
- if the accountant prepares journals, give bookkeeping access, and the accountant cannot change who else has access;
- if the accountant only checks the books, give review access, so they can read every line without being able to post anything.
Either way, the outside accountant becomes a natural second pair of eyes over the bookkeeper's journals. The accountant review access article goes further into choosing between the two.
A monthly routine for the principal
Half an hour a month is enough for most agencies:
- Before the month is closed, open the general ledger and list the month's manual journals.
- Read every narration and ask for the supporting document behind any journal you do not understand.
- Check the trial balance balances and that the commission and trust-related accounts look as you expect.
- Note any journal you questioned and the answer you received.
- Once satisfied, close the month so that no further postings can land in it.
Start with last month: open its manual journals, read each one with the bookkeeper beside you, and agree which entries will need a document attached from now on.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
