How to Put Continuous Accounting Into Practice

“If there’s any process that’s taking you more than three hours, that’s too long. Three hours is a reasonable amount of time for getting most complex things done,” says Michael DalPogetto, director, America’s controller at Varian Medical Systems.

Continuous Accounting Is Great In Theory. But How Do You Get Started?

Continuous Accounting. It sounds great in theory, right? After all, who doesn’t want to eliminate the late nights, the chaos, and the sheer frenzy of the traditional close? (Plus, have access to better data, have time for analysis, and all that great, success-driving stuff.)

Yet…knowing Continuous Accounting is the smart (and ultimately necessary) thing to do and actually practicing it are two very different animals.

Which begs the question: What can you do now to prepare for the transition to a Continuous Accounting practice?

At InTheBlack 2017 Michael DalPogetto shared some ideas for anyone struggling with taking that first step.

Whether you’ve implemented BlackLine yet or not, he suggests doing these key tasks in year one of your journey toward Continuous Accounting.

Year 1

Define:

• What’s your workload like now? Before you even begin implementing BlackLine, define everything you have to do each month.

• What must be done within the close—and more importantly, what can be done outside of it? List your JRs, recons, external department reporting, and your close checklist

• Establish a Global Standard Naming Convention now. This will save time (and headaches) later.

• Know your metrics. Where are you now with your close times? Where do you want to be? Establish your starting point as you transition from manual to automated.

• Establish deadlines, i.e., start putting boundaries around the close. Pick a time and stop the close at that time. (Michael manages the close not by the week or by the day but by the hour!)

• Establish SLAs.

Organize & Assign:

• Examine and organize your workload. What’s up with your process? Who does what and when? Begin assigning global, regional, and local ownership.

• Organize R2R by function: Q2C, P2P, Employee, Other.

• Set the stage for accountability. Every G/L on the trial balance has an owner by legal entity. Put a name on every line! This integrates ownership and accountability within the organization.

Virtualize:

• Move away from paper. Right now. Varian got their shared drive organized ahead of time.

• Centralize shared drives globally. Sure, BlackLine does this, but there’s no reason not to do it now for the ultimate head start!

• Go 100% electronic.

Spread the Workload:

• Prepare journals before month end by estimating the remaining days. You can do this through the power of estimating as much as a week in advance.

• Move I/C outside the close period through estimates and true ups or sending one months in arrears. There’s no requirement that intercompany transactions have to be done during the close!

• Move from hardcoded/adjusting journal entries to comprehensive/reversing Journal entries

• Move from manual to auto reversing

• Process JVs in batches as opposed to individually – cash entries

Key Takeaways

1. Data is the driver - and we need to reinvent accounting to align with this idea

2. Have a long-term plan of execution

3. Start now!

4. Maximize Blackline functionality

Varian has a five-year plan for implementing this approach. They’re not messing around.

Download The Blueprint for Continuous Accounting to follow their lead and begin building a long-term strategy for your organization.

“If there’s any process that’s taking you more than three hours, that’s too long. Three hours is a reasonable amount of time for getting most complex things done,” says Michael DalPogetto, director, America’s controller at Varian Medical Systems.

Continuous Accounting Is Great In Theory. But How Do You Get Started?

Continuous Accounting. It sounds great in theory, right? After all, who doesn’t want to eliminate the late nights, the chaos, and the sheer frenzy of the traditional close? (Plus, have access to better data, have time for analysis, and all that great, success-driving stuff.)

Yet…knowing Continuous Accounting is the smart (and ultimately necessary) thing to do and actually practicing it are two very different animals.

Which begs the question: What can you do now to prepare for the transition to a Continuous Accounting practice?

At InTheBlack 2017 Michael DalPogetto shared some ideas for anyone struggling with taking that first step.

Whether you’ve implemented BlackLine yet or not, he suggests doing these key tasks in year one of your journey toward Continuous Accounting.

Year 1

Define:

• What’s your workload like now? Before you even begin implementing BlackLine, define everything you have to do each month.

• What must be done within the close—and more importantly, what can be done outside of it? List your JRs, recons, external department reporting, and your close checklist

• Establish a Global Standard Naming Convention now. This will save time (and headaches) later.

• Know your metrics. Where are you now with your close times? Where do you want to be? Establish your starting point as you transition from manual to automated.

• Establish deadlines, i.e., start putting boundaries around the close. Pick a time and stop the close at that time. (Michael manages the close not by the week or by the day but by the hour!)

• Establish SLAs.

Organize & Assign:

• Examine and organize your workload. What’s up with your process? Who does what and when? Begin assigning global, regional, and local ownership.

• Organize R2R by function: Q2C, P2P, Employee, Other.

• Set the stage for accountability. Every G/L on the trial balance has an owner by legal entity. Put a name on every line! This integrates ownership and accountability within the organization.

Virtualize:

• Move away from paper. Right now. Varian got their shared drive organized ahead of time.

• Centralize shared drives globally. Sure, BlackLine does this, but there’s no reason not to do it now for the ultimate head start!

• Go 100% electronic.

Spread the Workload:

• Prepare journals before month end by estimating the remaining days. You can do this through the power of estimating as much as a week in advance.

• Move I/C outside the close period through estimates and true ups or sending one months in arrears. There’s no requirement that intercompany transactions have to be done during the close!

• Move from hardcoded/adjusting journal entries to comprehensive/reversing Journal entries

• Move from manual to auto reversing

• Process JVs in batches as opposed to individually – cash entries

Key Takeaways

1. Data is the driver - and we need to reinvent accounting to align with this idea

2. Have a long-term plan of execution

3. Start now!

4. Maximize Blackline functionality

Varian has a five-year plan for implementing this approach. They’re not messing around.

Download The Blueprint for Continuous Accounting to follow their lead and begin building a long-term strategy for your organization.