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Strengthening Controls for Critical Close Processes
Rapid growth introduces new complexity and risk for accounting and finance organizations. Discovery, Inc., which operates networks including the Discovery Channel, Animal Planet, HGTV, and the Food Network across 220 countries, has experienced this firsthand. Fueled by growth and global decentralization, the $11 billion media giant turned to BlackLine and implementation partner SandPoint Consulting to modernize its account reconciliations and journal entry management.

THE CHALLENGE

Despite Discovery’s rapid growth, organically and through acquisition, account reconciliations were done manually across five global operational hubs in Florida, Poland, the UK, Italy, and Singapore. They were often printed and kept in binders around the world.

The corporate accounting team lacked central governance over the process, and because they were using spreadsheets, couldn’t be sure that global teams had met expectations and followed internal standards.

“As we grew primarily internationally, the account reconciliations process started to breakdown,”says Kiara Hartnett, director of corporate accounting at Discovery, headquartered in Silver Spring, Maryland.  “There was rapid deterioration once we opened the gates to a much larger global footprint. Account recs are the backstop of our control environment, and we needed a better solution in an extremely tight timeframe.”

WHY BLACKLINE

SandPoint Consulting, a BlackLine and SAP partner, was wrapping up an SAP Business Consolidations and Planning (BPC) project at Discovery. One SandPoint consultant had previously worked at BlackLine and recommended that Discovery look at BlackLine’s solutions.

The company also considered a competitor but chose BlackLine after a demo and evaluation of features. And after a positive experience with SandPoint on the consolidation project, SandPoint was the natural selection for an implementation partner.

Key factors that influenced the decision were:BlackLine’sstatus as anSAPpartner, the ability forBlackLine’sSAP Connector to pull data from Discovery’s SAP R/3 platform, and SandPoint’s provenBlackLineexpertise.

THE RESULTS

Greater efficiency and visibility. Going live in a phased implementation led by SandPoint, Discovery started by simply loading its account rec spreadsheets into BlackLine to get a “quick win” and better visibility. Six months later, they began leveraging additional functionalities including templates and auto-certification. They also brought SAP subledgers into BlackLine directly to minimize risk and save additional time.

Early in the implementation, SandPoint and Discovery conducted intensive global training of over 300 users. Collaboration with the internal audit team also accelerated adoption and results, in addition to reducing audit-related travel costs as supporting documentation could be reviewed directly in BlackLine.

With a risk-based model, Discovery has significantly reduced total certifications by grouping accounts. The accounting team is saving a tremendous amount of effort through new efficiencies, while decertification has eliminated the risk of reconciling incorrect balances. BlackLine also automated the previously manual and time-consuming completeness checks.

“BlackLineAccount Reconciliations dramatically improved our control environment,” Hartnett says. “We’re definitely seeing more time efficiency, we have much better visibility, and can identify things a lot faster.”

Stronger journal entry controls. With account reconciliations optimized in the cloud, Discovery moved on to its second pain point—manual journal entries. Discovery’s inability to differentiate between manual and automated journal entries was flagged by external auditors as a control design deficiency which required auditors to test a much larger volume of journal entries. BlackLine Journal Entry offered an elegant solution that could layer directly on top of SAP and be managed by the corporate accounting team.

Today, Discovery has its thousands of journal entries reviewed and approved before the conclusion of each close, which wasn’t possible with previous manual processes. It’s able to avoid booking entries that are deemed immaterial, and auditors found that Discovery had eliminated the design flaws of its previous journal entry environment.

“BlackLinegives us a much stronger control environment around journal entries with approvals happening prior to closing,” Hartnett says. “We’ve been able to implement threshold analysis where certain entries are no longer being done because it’s so much easier to see the data in blackline.”

With BlackLine in place for account recs and journal entries, an internal survey found “extremely positive” satisfaction with BlackLine across a total population of about 300 users.

“Our internal audit team loves BlackLine, and external auditors do as well,” Hartnett says. “Both our account recs and journal entry projects withBlackLineare viewed as tremendous victories.”

INDUSTRY

Media & Advertising

ERP

SAP

REGION

United States

COMPANY SIZE

Enterprise

BUSINESS IMPACT
  • Greater efficiency and visibility

  • Stronger journal entry controls

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