The Future of Accounting and Modern Finance is Here
What is Continuous Accounting?
Continuous Accounting embeds automation, control, and period-end tasks within day-to-day activities, allowing the rigid accounting calendar to more closely mirror the broader business. Continuous Accounting transforms the way business process works by emphasizing real-time processing, especially skilled employees, and deep analysis. The result is a more efficient close, more accurate financials, and a more effective organization.
Finance and accounting leaders are expected to deliver accurate and real time analysis of their organization’s financial performance at all times. Yet many still wrestle with decades-old accounting processes that can only provide a view into the past, where the organization was, not where it is now. Continuous Accounting is a modern approach that empowers real time financial intelligence and allows finance and accounting teams to provide unprecedented value to the larger business.
The Old Model: Record-to-Report
Close activities and processes that were created and implemented twenty or more years ago were not built for the modern business economy. The traditional record-to-report process was designed to simply map-out tasks and responsibilities that were required to be performed after the period-end, whether directly involved in the financial close process or part of after-close reconciliations and analysis. The process was built to accommodate rigid ERP systems that do not integrate well with other data sources and fail to provide accurate visibility into the chart-of-accounts. Record-to-report represents items to be completed upon the completion of an accounting period – monthly, quarterly, annually.
The complex nature of 24/7 global business means companies leaving much of the close work to the end of period are at a competitive disadvantage.
Transactions created and processed around the clock stack up, and this increasingly large set of unreconciled transactions strains employee productivity during the close. A chaotic close exposes an organization to the risk of high rate of errors in preparation along with less time for thorough review. This model supports a start-stop view of how accountants approach reconciliation and close activities that necessarily produce backward looking and out-of-date results. Record-to-report is an antiquated approach to period-end accounting.
The Modern Approach: Continuous Accounting
BlackLine’s Finance Controls and Automation platform delivers a fresh approach that increases the quality, accuracy, and efficiency of the financial close and other period-end activity. This new approach is known as Continuous Accounting. The traditional model of record-to-report only focuses on collecting, reviewing, and verifying an entire period’s data after the period ends.
Those who have embarked on the modern finance journey continually capture, validate, and analyze financial data in a timely and precise manner. As a result, organizations are no longer left with a look at where they were days or weeks ago, but now have a real time picture of the current state of the company’s accounts. Moreover, as close accounting processes traditionally left for the days following the period-end are spread throughout the period, workloads are more evenly distributed improving accuracy, allowing more time for review, and preventing employee burnout. Continuous Accounting combines modern finance strategies and cloud technology to deliver real time reporting, faster analysis, and unprecedented operational efficiency. Continuous Accounting is the modern approach to close accounting.
Reflects a Modern Way of Operating
From agile methodology for product development to just-in-time delivery for supply chain management, other departments have adopted new frameworks that automate processes, optimize resources, and reduce costs. Continuous Accounting shifts the paradigm for finance and accounting departments that until recently, only had outdated, paper-driven processes.
Enables Faster Analysis and Real Time Accuracy
When financial reporting is completed during the days or weeks after the books are closed, the results are already dated. The automation technology behind Continuous Accounting allows data and transactions to be processed and reconciled at any time, and if necessary, flagged for further research. Analysis of the data may be performed continuously, based on business cycles and the decisions that need to be made.
Embeds Operational Efficiency
Continuous Accounting reduces the peaks and valleys inherent with traditional record-to-report. By automating many processes and embedding close activities throughout the period, workloads are more evenly distributed over time. Resolving the chaos of legacy accounting practices leaves more time for accurate work and thorough review, improving quality and reducing risk.
Leverages the Power of Cloud Technology
Only the connectivity built into cloud technology could facilitate Continuous Accounting. By integrating with your ERP and other financial systems, BlackLine’s unified cloud platform can match transactions constantly, execute reconciliations daily, and analyze account fluctuations automatically. On-premise or hybrid solutions simply cannot match the efficiency of the cloud.