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A Continuous Accounting Journey: Monitoring & AI

The finance world is changing, and accounting no longer needs to be an endless cycle of late night, end-of-the-month closing tasks. Instead, it can be run on a Continuous Accounting model and led by exceptional accountants.

While every accountant has the potential to become exceptional, a relatively small percentage have actually achieved that status. Rob van den Wijngaard was an exceptional accountant, but his journey didn’t stop there. He became an exceptional controller and he now manages Leiden University’s shared service center (SSC).

If you‘ve never heard of Leiden University’s SSC, you’re missing out on an inspiring story of how, under Rob’s leadership, a normal shared service center has become a leader in the industry.

And the industry is paying attention. Rob has traveled everywhere from The International Criminal Court to Shared Service Center Conferences around the world to present the accomplishments of his SSC.

Leiden University’s success, and Rob’s plan, is something that any SSC can duplicate because it is built on an agile strategy. It began with Continuous Accounting, and has expanded its focus on continuity to three additional areas: Continuous Monitoring, continuous improvement, and artificial intelligence (AI).

Bringing Continuous Accounting to a Financial Shared Service Center

Continuous Accounting is the even distribution of a Finance Department’s workload over the accounting period, which allows a Finance Department to process data and transactions as they come in. It relies on automation to shorten the close and smooths out end-of-period spikes.

When Rob initially introduced Continuous Accounting to Leiden University, it was a very new concept in the industry. Unsure of how such a revolutionary approach would impact something as important as the financial close, he introduced it as a pilot project for the SSC.

Unable to trust their financials with just anyone, Leiden University investigated numerous options before deciding on BlackLine Smart Close for its secure and powerful automation technology.

Continuous Monitoring

The pilot project proved to be a success, and Continuous Accounting became the base of the SSC’s accounting strategies. Rob and other leaders in Leiden University’s Finance Department, both satisfied with the results they were seeing and unwilling to rest on their laurels, began to focus on a benefit enabled by Continuous Accounting: continuous monitoring.

Continuous Monitoring is the ability to evaluate the integrity of information at any point in time. It allows SSCs to check for errors, fraud, and inefficiencies throughout the month. It also ensures internal and external compliance as well as opportunities for structural improvement.

This is only possible for an SSC to achieve once Continuous Accounting is adopted, because it’s enabled by the real-time visibility of financial results that Continuous Accounting makes available at any point in the accounting period.

When adopting Continuous Monitoring, Leiden University again started with a pilot project to determine what kind of impact this strategy would have on the organization and its current culture, technology, and processes.

For that initial pilot, Rob created a list of the top ten risks SSCs need to monitor in order to create rules for automation. Those risks include ensuring no double master data entries, monitoring for duplicate invoices, and safeguarding the segregation of duties based on SAP transactions.

During the pilot, Leiden University discovered how many resources they were wasting on repetitive checks that could easily be automated. Rob was so impressed with the results he was seeing that he extended the Continuous Monitoring framework to include 12 controls, including expired outgoing invoices and VAT checks.

Incorporating Continuous Accounting and Monitoring as the base of their Finance Department’s strategy has delivered numerous benefits to the university. These include a reduction in implementation and maintenance costs, integrated monitoring that reduces audit time and expenses, and the ability to not only quickly resolve errors when they do occur, but also be able to use that information to optimize performance.

Adopting a Continuous Improvement Mindset

Continuous Accounting is more than a change in technology. It’s a fundamental shift in philosophy and it pushes Finance Departments toward continuous improvement.

Rob van den Wijngaard and Leiden University have embraced the continuous improvement mindset and endlessly strive to be better. As a result, they’ve created a shared service center that is ahead of its time and leading the industry.

As true proponents of continuous improvement, they are always open to ways to improve processes and workflows — even when that means investigating and vetting new technology, such as artificial intelligence (AI).

The Future of Continuous Accounting: AI

Machine learning is a concept so new and surreal for Finance Departments that it has reached mythical proportion and yet, it is the next step in Leiden’s Continuous Accounting maturity model. Machine learning, a part of artificial intelligence, has generated a lot of interest in Finance Departments because it offers the ability for software to learn and program itself — it’s software with the continuous improvement mindset.

One of the most appealing aspects of AI for Continuous Monitoring is in error prevention. Currently, Finance Departments find errors after they’ve been made, but with AI, future risks could be identified and prevented based on data.

While companies are investigating how AI will impact their finance department, many are watching how Leiden University will adopt this new technology. The university is already exploring several potential applications for AI, such as making predictions based on large volumes of data, including historical data.

While many companies are satisfied to sit back and watch how others forge ahead and incorporate new innovations, Leiden University will never be one of those companies.  As Rob van den Wijngaard often quotes, “We have a strategic plan. It’s called doing things”[i], a strategy that makes Leiden University an interesting company to watch as it leads the way.

 


[i] Herb Kelleher, cofounder and former CEO of Southwest Airlines