Analyzing how and why things change over time is a simple concept that yields big dividends. For scientists, fluctuations in weather data can help determine the impact of climate change on wildlife and water sources. For doctors, charting the efficacy of treatments over time can help build models to better treat disease.
For accountants, flux analysis is a powerful tool in forecasting, budgeting, and maintaining corporate integrity. Consistent monitoring of change provides decision-driving insight, especially as flux data doesn’t just function as a predictive force. It can also fulfill a prescriptive role, the real game changer in a 24/7 global marketplace.
The ability to identify and analyze financial changes from period to period, account to account, is also one of the most effective ways to manage and mitigate risks. Flux analysis functions as an early warning system—the canary in the coal mine—for potential losses, the integrity of reporting, and even fraud.
Why Flux Sucks
If identifying and analyzing these changes is so critical, why does flux analysis have such a bad reputation?
Because while the concept is simple, the execution of it is anything but. For many accounting organizations, even the most straightforward flux analysis is still a time-intensive, brain-draining, data-wrangling process that deters all but the most dedicated (and caffeinated).
When it comes to variance analysis—or any accounting process—manually entering data into hundreds of linked spreadsheets takes too much time and leaves balance sheets vulnerable to human error. Spreadsheets are 20th-century technology, not suited for keeping up with the demands of complex, modern, data-generating organizations.
From “What the Flux?” to “Fluxtastic!”
With BlackLine Variance Analysis, flux no longer sucks.
As part of BlackLine’s Finance Transformation Solution, Variance Analysis takes the data you’re already using to reconcile, match, and validate accounts and continually monitors it for fluctuations. Calculations are done automatically against the pre-set rules, so accountants can focus on investigating fluxes that matter.
By eliminating the need for both manual data entry and the dreaded VAR function, accounting organizations can maximize efficiency, increase accuracy, and effectively mitigate seen and unseen risk.
Are you tired of saying “What the flux?!” after your financial close? Download the full ebook to discover the best way to monitor balance fluctuations.