Automated vs. Manual: Weighing Process Ownership & Accountability

Accounting professionals are by their nature–and their job description—familiar with the concept of accountability. They are responsible for producing work with utmost accuracy, work that may be examined and tested by everyone from reviewers and auditors to CFOs, CEOs, and investors.

But the concept of accountability doesn’t fare so well when faced with the real-world pressures of business, where finance and accounting teams are frequently challenged by tight deadlines and ever-tightening budgets.

For those businesses still dependent on spreadsheet-based processes, accountability is further challenged by the new requirements of COVID-19, where social distancing and remote operations have become the norm.

“The problem with spreadsheet-based Accounting is that things change,” says BlackLine Product Marketing Manager Katie Morris. “An accountant may have complete ownership over and visibility into the spreadsheets and documentation for their accounts, but that accountant may leave for another job, or another position in the company.

“Now there’s a new owner of the account, but that person doesn’t have the same knowledge—the institutional knowledge—of the previous accountant.

“The new preparer gets a call from an auditor asking about documentation and is suddenly lost. Where’s the backup? A flurry of emails and phone calls may or may not turn up the answer to the question. Regardless, time is wasted, and the risk of an error grows exponentially.”

The institutional-knowledge problem is magnified by the fact that the workings of Accounting and Finance grow more complex by the day. New business models add complexity, new regulations increase compliance concerns, and growing markets and other factors put added pressure on the accounting team.

And the quest for information comes not just from auditors, but from treasury and finance groups, and even business units.

Making the Process Accountable

“Personal accountability can only go so far,” says Morris. “At the end of the day, the process needs to be accountable, from end to end, from preparation and review to reporting, and eventually, auditing. In an automated system, every role in the process has access to the underlying documentation, so questions can be answered on the spot and the data to back it up is consistent throughout.

“Also, process intelligence is shared throughout. If a late journal entry comes in for, say, an accounts receivable account, BlackLine’s automation will see that the balance has changed, automatically de-certify the previously prepared reconciliation, and alert the process owner to the change. The owner can then re-certify the account.

“In a manual system, a late journal entry might require the accountant to follow an email trail, or even to go to a coworker to ask what happened,” she says. “Then, whoever owned the account would have to work backward with phone calls and emails to get the answer.”

Adding Value

Morris notes that accountable processes give accountants a broader view of the accounting function, so it elevates them to think more creatively about how processes can be streamlined or improved.

“Rather than owning a small slice of the pie, the accountant can now see the end-to-end process,” she says. “That way, they can think more creatively about how the accounting function fits in the business, collaborate more easily with colleagues in Finance or other groups, and be more valuable to the business itself.”

Read our latest issue of BlackLine Quarterly for more stories like this, including how to make the business case for accounting automation.