Glossary · Fund Accounting
Journal Entry (JE)
A journal entry is a dated record of a transaction in the general ledger, with equal debits and credits, a description and supporting documentation.
Every general ledger posting is a journal entry. In fund accounting, most entries are system-generated from trades, prices, income events, capital activity and fee calculations. Manual journal entries cover items the system cannot generate: expense accruals and true-ups, corrections, reclassifications, allocations between funds or share classes, and audit adjustments.
Because manual entries bypass automated controls, they are a primary focus of reviews and audits. A sound process requires a unique reference, a clear description, attached support, preparation by one person and approval by another under the four-eyes principle, and posting only into open periods. Recurring manual entries are candidates for automation.
Pitfalls include entries posted to the wrong fund or class, one-sided or unbalanced entries in spreadsheets later keyed incorrectly, reversing entries that are forgotten, and entries posted after NAV sign-off without reopening the period formally. Reviewers typically scan all manual entries above a threshold and all entries posted outside normal hours or by unusual users.
Related terms
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