Something about warm summer days AND nights allows me to ponder the different
accounting processing experiences of various ad agencies with WMJ.
I was retained earlier in the spring by an agency to help them systematically program their accounting entries in WMJ because they were beyond frustrated with all the manual journal entries AND reversing journal entries they had to perform each month for WIP.
Not only did they not have WIP turned on, nor have the corresponding G/L codes set up, they were monitoring their unbilled time and expenses, AND deferred revenue on a master Excel spreadsheet.
NOT the first time I have seen this.
So, I was compelled to write something on this because, more than ever before, with AI creeping in, the improper use of accounting time and needing to have agency best practices in place, has the use of accounting time been more important.
AI has drawn a line in the sand for the accounting department. Now is the time to examine and review what month-end journal entries to prepare.
More on this in a moment. Workamajig is more than just a project management tool — it’s a fully integrated accounting system built specifically for creative agencies.
One of its strengths is that financial activity flows directly from operational data: time
entries, media orders, purchase orders, client invoices, and vendor bills all feed into the general ledger automatically. This ensures that project profitability, WIP (Work in Process), and cash flow reporting remain accurate and consistent.
However, manual journal entries to certain key balance sheet accounts can disrupt this integrity and cause reporting errors. The most common accounts that should never be adjusted by direct journal entry are:
- Accounts Receivable
- Work-in-Process (WIP)
-Accounts Payable
- Deferred Revenue
- Accrued Media Order Liabilities
These accounts are controlled by subledgers within Workamajig:
- Accounts Receivable is updated automatically when you post client invoices or record payments. Journal entries here bypass the client aging report and can create mismatches.
- Work-in-Process is driven by project costs and billing events. Manual entries can distort WIP reporting and throw off revenue recognition schedules.
- Accounts Payable is updated automatically when you post vendor invoices or record payments. Journal entries here bypass the client aging report and can create mismatches.
- Deferred Revenue reflects billings that have been invoiced but not yet earned. Adjustments must come from the proper billing and revenue recognition processes.
- Accrued Media Order Liabilities track commitments from media orders. Posting entries directly here can create discrepancies between the general ledger and the media order detail.
If balances in these accounts need adjustment, the fix should be made through the
operational side of Workamajig — for example:
Correcting or reversing an invoice rather than forcing a journal entry
Adjusting time or expense postings on a project
Modifying or canceling media orders
Using Workamajig’s revenue recognition tools for deferred revenue
This approach ensures that project, client, and financial reports stay in sync.
In short, Workamajig is designed to be the single source of truth. If you post directly into these accounts, you’re breaking the link between operational data and the general ledger, which can lead to inaccurate profitability, misstated financial statements, and hours of reconciliation work.
Always use Workamajig’s built-in workflows to make changes, and reserve manual journal entries for accounts not tied to an operational subledger.
Workamajig accounting flow showing controlled balance sheet accounts and where manual journal entries should not be posted. The same goes for Accounts Payable!!!
So, if you are doing journal entries for items outside of payroll, bank service charges, distributions to the owners that you have not previously been informed of, or even changes in the present investments, you should give me a call.
Sincerely,
Vince Dong, CPA