Why Adjustments Should Be Reviewed Differently Than Transactions

In accounting, not all entries are created equal.

Day-to-day transactions—AP invoices, payroll, cash receipts—follow established processes, system controls, and approval workflows. They’re repetitive, predictable, and largely automated by your GL system. Adjustments, on the other hand, are different. They require judgment. Context. Intent.

Yet many accounting teams review adjustments the same way they review transactions—or worse, treat them as an afterthought tacked on at the end of the close.

That’s a mistake.

Adjustments deserve a different review approach, and recognizing that difference is one of the fastest ways to improve accuracy, audit readiness, and confidence in your financial statements.

Transactions Are System-Driven. Adjustments Are Judgment-Driven.

Transactions originate from operational activity. They are governed by rules embedded in your financials software: validation checks, approval chains, posting logic, and system controls.

Adjustments don’t work that way.

Adjusting entries exist because systems can’t capture everything. Accruals, reclasses, eliminations, allocations, audit entries, tax adjustments—these require accountants to interpret the data and decide what the financials should reflect.

That distinction matters. Reviewing a transaction is about verifying it followed the rules. Reviewing an adjustment is about evaluating whether the judgment behind it makes sense.

Why Reviewing Adjustments Like Transactions Creates Risk

When adjustments are reviewed the same way as routine transactions, several problems tend to show up.

First, context gets lost. An adjusting entry without a clear explanation may be technically correct, but reviewers can’t easily understand why it exists. That makes it harder to spot errors or inconsistencies across periods.

Second, adjustments tend to pile up. If no one is reviewing why an adjustment exists, the same entries often repeat month after month—even when the underlying issue could be fixed upstream.

Third, audit risk increases. Auditors don’t scrutinize routine transactions the same way they scrutinize adjustments. When adjustments are poorly documented or scattered across spreadsheets, audit questions multiply fast.

Finally, review fatigue sets in. When adjustments are buried inside massive spreadsheets or mixed in with transaction-level data, reviewers are more likely to miss something important.

Adjustments Require Structure, Not Just Approval

A better review process starts with recognizing that adjustments need structure.

Effective adjustment review answers different questions than transaction review:

• Why was this adjustment needed?

• Is it recurring or one-time?

• Which reporting purpose does it serve (book, audit, tax, management)?

• Does it align with prior periods?

• Should it be reversed next month?

Without a dedicated space to answer these questions, teams rely on memory, email threads, or spreadsheet notes—none of which scale well.

This is where many accounting workflows break down.

How TreeBeam Helps Teams Review Adjustments the Right Way

TreeBeam was designed around this exact problem.

Instead of treating adjustments as just another line in a spreadsheet, TreeBeam gives them the visibility and structure they deserve. Adjustments live in clearly defined columns, separated by purpose, and tied directly to the underlying trial balance.

That structure makes review easier and more meaningful. Reviewers can quickly see:

• Which entries are adjustments vs base balances

• How adjustments impact consolidated financial results

• Whether similar adjustments are appearing period over period

• What changed since the prior close

Because everything lives in one centralized workspace, adjustments don’t get lost in version control chaos or buried in “final” spreadsheets.

Better Adjustment Review Improves the Entire Close

When adjustments are reviewed differently—and intentionally—several downstream benefits follow.

The month-end close becomes more predictable. Fewer surprises show up late in the process because adjustments are visible and understood earlier.

Financial statements become more consistent. When recurring adjustments are identified and addressed, teams reduce noise and improve comparability across periods.

Audit prep becomes easier. Adjustments are already documented, categorized, and traceable—no scrambling to explain why an entry exists months later.

And perhaps most importantly, accounting teams gain confidence in their numbers. Adjustments stop feeling like patches and start feeling like informed decisions.

The Bottom Line

Transactions tell you what happened. Adjustments explain what it means.

Treating both the same way undervalues the role of professional judgment in accounting and increases risk where it matters most. Adjustments deserve their own review lens—one focused on clarity, intent, and consistency.

TreeBeam helps accounting teams do exactly that by giving adjustments the structure, visibility, and context they need—without adding complexity to the close.

If adjustments are a meaningful part of your month-end or consolidation process, reviewing them differently isn’t optional. It’s essential.