BlackLine’s New Catalyst Cuts Time for Clearing Accounts

Clearing account reconciliations can be a messy business. Accountants often have to download thousands of lines of transactions from various sources, tick and tie them, and then use a variety of formulas to look for reconciling items. The complex process flow requires multiple handoffs and can create chaos—and waste valuable accountants’ time—during the time-critical close.

The solution? A new process-built clearing account reconciliations catalyst from BlackLine. The catalyst initiative was launched in October of this year as part of BlackLine’s Collaborative Accounting Experience. Each catalyst includes BlackLine process solutions, along with implementation guides, user training, and quality review checks to solve a specific accounting problem.

The Clearing Account Reconciliations catalyst was introduced at BeyondTheBlack by BlackLine Senior Product Marketing Manager Barbara Hsieh. She started by noting that clearing accounts—which are required when transactions are processed through a temporary holding place, until a transaction is completed—can be a tedious manual process.

“Working manually,” she says, “accountants would download transactions from the general ledger to Excel. They might then spend thousands of hours ticking and tying to match transactions between multiple data sources. Only then would they get to the important part of the process—identifying and researching unmatched transactions.”

BlackLine found that, on average, it takes 150 FTE minutes to finish one high-volume transaction account. “Even if you only had 10 clearing accounts to reconcile,” she says, “on average, you’re spending 25 hours a month—which is wasted time.

“What could your team be doing with that extra time? Could they focus on corporate initiatives or other value-added activities that would help the organization?”

BlackLine’s Clearing Accounts catalyst cuts the wasted time—and the multi-handoff chaos—by bringing the clearing account transactions from the general ledger into BlackLine’s powerful matching engine. The matching engine employs user-defined rules for certification thresholds and other criteria. It then performs automatic matching, pushing any unmatched transactions down to a reconciliation template for human investigation, which is the best use of accountants’ time.

BlackLine customers typically schedule their matchings for overnight, Hsieh says. “They walk in each the morning, and they can immediately focus on the transactions that didn’t match.

“Think about it. While your team was sleeping, BlackLine matched over 1,000 transactions, and gave you a complete audit trail. Each transaction has a specific match ID. We can see the date and time it was matched, and which pass rule was used to create the match.”

Hsieh points out that BlackLine’s matching engine can handle all types of matches: one-to-one, one-to-many, many-to-one, and many-to-many. Also, the solution can work with BlackLine’s Automated Journal Entry to complete the process.

“While Automated Journal Entry isn’t part of the clearing catalyst, it can be added by the customer,” she notes. “This creates a complete, end-to-end solution for your clearing account reconciliation process.”

Hsieh points out that BlackLine’s automated workflow—part of the clearing accounts catalyst and central to all BlackLine solutions—maximizes accountability for clearing accounts and all other accounting processes.

The bottom line, she says, is that the catalyst will allow organizations to redeploy resources to additional month-end tasks, analysis, and strategic initiatives.

“In addition to freeing up the capacity of your team, the catalyst will help you manage risk and compliance—while at the same time, optimizing your clearing account reconciliation process.”

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