Franklin Resources, Inc. is a global investment management organization operating as Franklin Templeton. Franklin Templeton’s goal is to deliver better outcomes by providing global and domestic investment management to retail, institutional, and sovereign wealth clients in over 170 countries.
Prior to deploying BlackLine, Franklin Templeton’s corporate accounting team was performing its account reconciliations with Excel. The firm had established organization-wide standards around its reconciliations process, but there were regional variations around the format and risk rating of the general ledger (GL) accounts.
Further, there was a lack of transparency on the corporate accounting team’s progress during the close, even though there was no issue with the timeliness of the close or the accuracy of the financial information. The accounting team couldn’t demonstrate the timeliness of the month-end related controls for Sarbanes-Oxley (SOX) purposes, and this led to manual workarounds for signoffs.
Lastly, all GL accounts were reconciled monthly with no consistent framework that could be used to identify the high-risk accounts, which should be the focus of the team early in the close process.
The high number of accounts were determined as being high risk, resulting in a time-intensive process that required frequent overtime. Matching transactions between multiple separate systems was also performed manually in Excel and completed after month-end. Exceptions were identified and followed up on after the close as well.
In 2017, the accounting team’s leadership conducted a global accounting survey to find pain points, gaps, and areas for improvement. Franklin Templeton’s accountants weighed in, and two large initiatives arose: a risk assessment framework and new technology.
The firm reviewed two solutions that would help with its reconciliations. BlackLine was selected for multiple reasons, including:
- The ability to address several of the challenges in the accounting process while providing accounting leadership transparency into the close process
- The flexibility of the solution to incorporate the accounting rules needed to implement the framework to assess the GL risk rating
Franklin Templeton used a phased strategy for implementation, focusing on the North and South American offices first, then rolling BlackLine out to its international offices in the second phase. This strategy allowed the firm to alter the way in which the software was implemented in the second phase based on the lessons learned from the initial phase.
The company was also able to further utilize internal resources in the training component of the second phase, using a train-the-trainer model.
Key Benefit Areas
Key benefits achieved with BlackLine include:
- Reduced staffing requirements. With more efficient and consistent account reconciliation processes across the entire organization, Franklin Templeton was able to reduce the number of accounting personnel it needed and shift much of its month-end reconciliation work to low-cost offices.
- Reduced printing and storage. BlackLine eliminated the need for accountants to print Excel spreadsheets each month. Instead of storing binders of account records, the company could perform its reconciliations and analysis through BlackLine’s cloud platform.
- Improved productivity. The refreshed risk framework that Franklin Templeton established allowed accounting staff to reduce the overall number of high-risk accounts by 50%. This allowed for personnel to spend more time analyzing the accounts and adding value through their analysis.
- Better visibility and transparency into the close process. BlackLine allows Franklin Templeton accounting leadership to view the progress of the close. It also allows the team to demonstrate the timeliness and accuracy of its close and reconciliation process for SOX purposes. This visibility gives employees better process control and improved overall quality control efficiency.
Since the company is global, ensuring a smooth deployment was critical to the success of Franklin Templeton’s use of BlackLine.
The team took the learnings from the first phase of the implementation to improve and streamline the rollout to their global offices. As a result, the firm improved upon the conventional train-the-trainer model with their understandings of what worked and what didn’t.
Taking an internal audit of what processes were working for internal stakeholders and where there were gaps was an important step in identifying how a software solution like BlackLine could help the organization improve its performance and reduce costs.
The accounting team was able to address the most pressing areas of the reconciliation process and maximize their return on the BlackLine software.
Franklin Templeton is achieving an annual ROI of 191% with BlackLine, with a payback period of 1.3 years.
Read the case study for the full financial analysis and to learn how Nucleus Research calculated this ROI.