Automation is the best friend of productivity. Yet, there is only so much automation in many finance and accounting organizations, and therefore only so much productivity.
Too many accountants are still bogged down in the trenches using spreadsheets to accomplish complex accounting and finance tasks. The various processes involved in closing the books, reconciling intercompany transactions, and tracking key finance controls are completed the same way they were a generation ago—manually.
The enormous amount of time these manual processes consume can be redirected to assist the CFO and the company’s enterprise performance management agenda. In many businesses, the CFO is charged with enhancing business intelligence, developing more accurate forecasts, and tightening internal controls to ensure accurate financial reporting and proper compliance. All of which would benefit from the intellectual firepower of Finance and Accounting, if only accountants had the time to provide it.
Here are five potential pain points facing Finance and Accounting that prevent accountants from doing more purposeful work.
High Volume of Account Reconciliations
Account reconciliations are a fundamental control within a company. In its simplest form, an account reconciliation is the substantiation of the balance sheet through comparison of balances in the General Ledger to other source documents, such as bank statements, invoices, contracts, etc. It’s not uncommon for a large, multinational organization to produce a general ledger comprising of 100,000 balance sheet accounts.
Hundreds of accountants often have to evaluate tens of thousands of spreadsheets, an effort challenged by the different ways these documents were created and used across the business.
As the F&A teams at Scotts Miracle-Gro discovered, this wasted time ads up. After automating their account reconciliations process, they achieved auto-certification for more than 1,000. Learn more about how they did it.
Incorrect Journal Entries
Many organizations have multiple ERP systems across their global operations, with hundreds of people manually preparing and posting journal entries. These documents are typically uploaded from the employees’ respective locations.
Some documents are scanned and saved in different formats; others are printed. Errors are common, requiring time to correct the slip-ups.
With technology, organizations can modernize journal entry management. When this process is automated, teams experience increased efficiency for a faster close and more analytic work. Role-based workflows reduce the risk of errors and delays, and there is greater visibility and on-demand access to key data.
Multiple Checklists for Task Management
To manage their tasks, finance and accounting staff often rely on the use of corporate and departmental checklists. Accountants physically compile these lists using spreadsheets to manage their different responsibilities.
Since tasks can be dependent on colleagues’ input, email or telephone correspondence is frequently involved, which increases the chance for human error.
A technology solution can help standardize month-end close timetables by replacing spreadsheets for recording and tracking month-end closing tasks. It enables teams to become more engaged and invested in the accounting process, and understand the background behind the accounting transactions.
Manually Matching Thousands of Transactions
One of the most pressing responsibilities of Finance and Accounting is the need to verify the completeness and accuracy of thousands (or in some cases, millions) of transactions in the general ledger.
In many multinational businesses, dozens of accountants must manually sift through thousands of lines from multiple sources and across many entities’ charts of accounts to make sure they ‘match’.
Automating detail-heavy reconciliations can help your teams save time and refocus their efforts on investigating discrepancies. This expedites the month-end close and drives accuracy and completeness.
The Monster Under the Bed: Intercompany Transactions
Few manual finance and accounting processes are as demanding as the need to account for, reconcile, and settle intercompany transactions (dealings between two or more associated entities within an enterprise filing a consolidated tax return or financial statement).
Various entities may produce hundreds of thousands of transactions in a wide range of currencies in different ways, using diverse systems that entail dissimilar processes. Since these entities are located across the world, the transactions are often subject to a myriad of tax and other regulatory requirements.
If a company has multiple ERP systems, there is a significant risk of disconnected transaction settlements and out-of-balance positions material to the organization’s financial statements.
Technology solutions can relieve the burden of intercompany accounting costs, and create systems that ensure a streamlined, standardized, highly accurate intercompany accounting experience. Automating this process is also the most effective way to improve compliance and lower the risk of fraud.
Keeping Pace in a Fast-Changing World
Performing the above complex exercises manually on spreadsheets not only absorbs an enormous amount of time, but the work is repetitive and tedious. And it doesn’t have to be this way.
Technology is available for organizations to manage their core accounting and finance processes to the fullest degree of automation possible, especially when it comes to rote clerical tasks. Automation results in greater control and visibility into the data with reduced compliance risk, since employees are no longer using multi-line spreadsheets to complete their duties.
But most of all, automating these processes will transform the finance and accounting function by freeing professionals from the enormous amount of time they spend collecting and verifying data, providing the opportunity to redirect their efforts toward analyzing the data and being much more productive, strategic advisors to the business.
At BlackLine, we’ve worked closely with customers to identify and then streamline and automate the most complex tasks in Finance and Accounting.
Learn more about how our platform can help your organization move to modern accounting by unifying data and processes, automating repetitive work, and driving completeness and accuracy.