This blog was originally published on May 31, 2017.
UHY Advisors is one of the top professional services and accounting firms in the country, with more than 650 employees consulting for companies that range from mid-market to the Fortune 500. Brad Baer helped create the firm’s finance transformation service, and today is a managing director in UHY’s accounting automation practice.
Baer notes that with process automation now underway for a growing number of companies, there is a real opportunity for accounting managers, controllers, and CFOs to take advantage of the reporting that’s now possible with the inflow of real-time accounting information.
BLACKLINE MAGAZINE How do you look at F&A reporting in general? What’s wrong, and how can it be improved?
BRAD BAER Let’s start with the ideal. Reporting should be visual and simple, and have a kind of flow that people can understand, both from the accounting side and the business side. That’s the vision.
The reality is that for many companies, reporting today is awful. The accounting team may have 80 people working on the financial close, but there’s no visibility into what they’re doing: what’s working, what’s not, where they’re adding value—or where they’re not. Ask about metrics, and the typical response from the CFO is ‘We closed on day 10.’ That’s all.
Once a company brings in automation, the possibility of faster, more granular reporting opens up. That brings a new type of actionable visibility to the accounting team, and makes it possible for the operations people to make decisions that are essential to the performance of the business.
BLACKLINE MAGAZINE What’s an example of that? Can it impact the bottom line?
BRAD BAER Yes, indeed. We have a large client that does a ton of online sales each day. They work with hundreds of credit card processors around the world, and wanted to make sure that these processors are charging them correctly according to their negotiated fees.
BlackLine gives them daily visibility into their charges. This is important because an error in fees could conceivably cause a loss of a million dollars in a day. With that kind of exposure, you don’t want to wait until the next month to find the problem.
In another case, a company’s marketing group might have launched a new campaign, and they want to see how it’s working. Let’s say they’re spending $50 per click. That could be half a million dollars a day. They’ll want to figure out if the performance of the ads justifies the cost, and it’s better to find that out right away, rather than waiting until the end of the period close.
BLACKLINE MAGAZINE What about helping the accounting process itself? How can real-time reporting improve that?
BRAD BAER The main challenge with the accounting process is how to eliminate waste and free up capacity. This is something we frequently do for clients to help them transform their accounting operations. Real-time reporting can help guide the process. It can lock on to the numbers that are coming in, and by focusing attention on just the problem areas, show where help is needed. As part of a Continuous Accounting model, real-time reporting can be a factor in the kind of continuous improvement that many of our clients are looking for.
BLACKLINE MAGAZINE So how can real-time reporting improve? What’s next?
BRAD BAER You have to look at the progress BlackLine is making since they’re a leading provider on this front. First of all, their reporting has become much more granular, and that’s important in an application like the one I mentioned with the credit card fees. They can see down to the transaction level, and that’s what makes it possible to check on the credit card fees—by monitoring each transaction.
They’ll also continue to add functionality, take on new technologies for visualization, and fine-tune the system to work in role-based user dashboards. Adding this kind of functionality is a lot harder than it sounds because the controlling software has to work so fast to maximize the viewer’s experience. We’re talking about ultra-high levels of complexity, considering today’s multi-entity, multi-ERP companies.
Join this webinar on October 18 to learn how to use operational and decision support data to uncover risk and accelerate business performance.