Accountio / Templates / Finance policies / Journal entry policy

Journal entry policy template for finance teams

Set the rules for every manual journal: what evidence it needs, who approves it, what the month-end review looks at and who can reopen a closed period. This journal entry policy is one Word procedure that also sets your reconciliation schedule and fixed asset rules.

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What the policy looks like

Journal entry policy template
What the policy coversSection in the policy
Why manual journals need their own rules
✓
1. JournalsThey bypass the controls in the purchase, sales and payroll systems
Evidence for every journal
✓
1. JournalsA description, a reference and support attached: a calculation, invoice, agreement or reconciliation
Second-person approval
✓
1. JournalsBefore posting and within the matrix limit. Nobody approves their own journal
Systems that can't hold journals for approval
✓
1. JournalsOptional wording: approval within a set number of working days, with a signed journal listing
Recurring journals and month-end templates
✓
1. JournalsApproved once a year and whenever they change. Prepayment and accrual schedules reviewed monthly
The month-end review
✓
1. JournalsThe financial controller checks every manual journal was approved. The FD looks at large journals, journals to cash or revenue, and journals posted after the close
Closed periods
✓
1. JournalsReopened only with the FD's approval
What gets reconciled and how often
✓
2. ReconciliationsEleven account types, from bank and cash to equity, each with what it is reconciled to
Differences and old items
✓
2. ReconciliationsLimits for investigating differences, and old items reported to the FD
What counts as a fixed asset
✓
3. Fixed assetsCapitalisation limit, register details, asset tags, disposals and a yearly check on site
Depreciation rates
✓
4. DepreciationUseful lives for seven asset classes, reviewed at each year end

When you need it

Manual journals are the easiest way to change the numbers without going through the controls in your other systems, so auditors, investors and lenders ask how they are approved. Put this policy in place when:

  • More than one person posts journals and nobody reviews them
  • Your company is preparing for its first audit or a lender's review
  • You move to a new accounting system and set up approval workflows
  • Month-end journals are posted from spreadsheets with no support attached
  • You want reconciliations signed by a preparer and a reviewer every month

How to use the journal entry policy

  1. Name the owner and approver. Fill in the company, the policy owner and who approved it, with a review date.
  2. Set your limits. Choose the amount above which the FD reviews a journal, and copy the journal limits from your delegated authority matrix.
  3. Choose the approval wording. Keep approval before posting, or use the optional line if your system cannot hold journals for approval.
  4. Fit the reconciliation table to your ledger. Delete accounts you don't have, set the deadlines and the limits for differences.
  5. Set the fixed asset rules. Your capitalisation limit, useful lives and depreciation method.
  6. Have it approved and tell the team. Record the approval date and show everyone who posts or reviews journals where the policy lives.

Questions

What is a journal entry policy?

The written rules for manual journals: what support each one needs, who approves it, how the month-end listing is reviewed and who can post to a closed period.

What is a manual journal?

An entry posted straight to the nominal ledger by a person, rather than created by the purchase, sales or payroll system. Because it skips the controls in those systems, each one needs evidence and a second person's approval.

Who should approve manual journals?

Someone other than the person who posted it, within the limit in the delegated authority matrix. In the example limits, the financial controller approves journals up to 50,000 and the FD above that. Journals the FD posts are reviewed by the financial controller after posting, and by the CEO above 250,000.

What supporting evidence does a journal need?

A clear description, a reference and the document behind it, such as a calculation, an invoice, an agreement or a reconciliation, attached in the accounting system.

How often should balance sheet accounts be reconciled?

The policy reconciles most accounts every month, including bank, sales and purchase ledger control, payroll, fixed assets, prepayments and accruals, intercompany, loans and suspense. Sales tax is reconciled each return period, and equity and reserves at the year end.

Also in the finance policies and procedures manual

Governance, authority and segregation of dutiesDelegated authority matrixPurchasing and paymentsExpensesRevenue, credit control, cash and bankingRecord keepingFinance controls workbook

See the whole pack →

Who it's for

Financial controllers and finance directors who want manual journals approved, reviewed and supported the same way every month.

Last checked

Checked in November 2026.