The account experts then go through and first identify, then explain the fluctuations, so management can assess whether the balance appears reasonable and why. Auditors often use this analysis to understand balances and see how management gets clarity around the numbers. The challenge companies frequently face is the time it takes to put the fluctuation together and identify the accounts that need further research.
BlackLine’s Variance Analysis module automates the flux analysis process, so account experts can focus on identifying the events that caused the balances to change, not identifying which accounts fall out of the acceptable limits. More importantly, management can quickly gain confidence around the accuracy of the financial numbers when timing is critical. The module is flexible enough to accommodate a variety of comparisons including but not limited to quarter over quarter, quarter over prior year quarter, year over year, budget to actual and forecast to actual.
It is imperative that management truly understand their financials and what goes into them. In order for this to happen, the flux analysis must be done in a timely and transparent manner.
Learn more about BlackLine’s Variance Analysis module and its impact on your flux analysis process