In any company it’s the accounting team’s job to make sure the books are balanced and accurate. Without that integrity in the numbers business decision-makers operate on shaky ground.
Typically, finance departments set out to balance the books during in an intense period lasting two or more weeks every month. They spend hours combing thousands of spread sheets and millions of line items to meet sign-off deadlines; tying supporting documentation to the ticked or verified numbers; tying the general ledger back to the subledger; and tying reconciliations back to the ERP balances.
Accuracy and integrity is the ultimate goal, yet the intense manual nature of the process puts that goal in jeopardy.
Accountants should and can expect more. Why hasn’t the tick and tie process been captured, automated, made visible and shareable from the cloud?
The answer is; it has. There is a better way. For accounting, the age of reliance on spreadsheets is coming to an end.
Write-offs and other wreckage
In my role at BlackLine, I have witnessed a lot of painful discovery as clients move away from spreadsheets to modern finance. It’s not uncommon for global organizations to find entire entities or regions where the accounts have not been reconciled. Some discover aged imbalances of millions which have to be written off. Balance sheet integrity is truly hampered due to the lack of visibility with a spreadsheet-driven process.
This is something that I have seen first-hand. I was responsible for a shared service center team of fifty accountants for a global logistics company. We had 3,000 balance sheet accounts to reconcile each month. That meant a solid three-week period of preparation, tick and tie, and resolution.
This often meant working until early hours of the morning in order to get everything done. The workload was intense and the manual nature of dealing with hundreds of spreadsheet and paper-based reconciliations dragged down our effectiveness and ultimately quality. It was a situation where experienced accountants were pushing paper and focusing on non-value added manual tasks.
A majority of the time was spent manually ticking and tying, setting up monthly spreadsheets, pulling and copying supporting documentation, and manually tracking progress due to the lack of visibility. Employee burnout and attrition certainly doesn’t help with the inefficient, manual reconciliation process.
We knew there had to be a better way, and we needed it in place as soon as possible.
The reconciliation process is about balance sheet integrity; you do it to ensure the numbers are accurate. However, it places such a burden on finance staff, and the manual nature of the process threatens the integrity of the numbers. BlackLine was the solution that could capture and automate the accounting process for greater efficiency, visibility, and control.
In one fell swoop, we reduced those crazy working hours, slashed our overtime, automated key portions of the process, and added much-needed visibility which all improve balance sheet integrity. Accountants no longer spent days at the photocopier doing backups for the months’ reconciliation. Supporting documentation is attached once and carried forward automatically to subsequent month’s reconciliations.
With BlackLine the entire process is now visible. Balance integrity is assured through imports from financial systems (ERPs, subledgers, banks, data warehouses, etc.), lockdown of data upon certification, systematic controls ensuring segregation of duties, dashboarding, audit trails, and built-in reporting. Instead of pouring over manual, error-prone spreadsheets and relying on a disjointed tick and tie process, the reviewer is actively analyzing and acting on exceptions. The implementation of BlackLine was transformative to our overall processes.
Reconciliation quality is often assessed by how long open items have been unresolved within a reconciliation. In the age of the spreadsheet, this requires spreadsheet-by-spreadsheet excavation on a massive scale. This required individuals to trawl through 3,000 different Excel files to pull in line item details for a single one aging report (Over 90 – items open over 90 days). In this new age of modern finance, that kind of information is exposed in a one-click global view that can be managed before it impacts the P&L.
Senior management never had this kind of visibility into the reconciliation process before. Controllers can spot risk and ensure it is acted upon immediately via risk-based queries, commenting to ensure follow-up and timely resolution. It’s a huge leap forward.
You owe it to yourself
I started off by saying that it’s the accounting team’s job to make sure the company’s books are balanced and accurate. It is also the accounting team’s job to look at the best way of securing that outcome.
More importantly, don’t you owe it to yourself to review the options? If you’d like to move away from the repetitive, disconnected world of spreadsheet tick and tie to a world where you can trust the numbers, make decisions with confidence and enjoy a more productive working life, that is surely reason enough to seek a better way. Modern finance has arrived.