Increasing Balance Sheet Integrity & Creating a Risk-Based Approach to Reconciliations

Informa is a leading international events, digital services, and academic knowledge group. Through hundreds of brands and a range of products and services, the company connects businesses and professionals with the knowledge they need to learn more, know more, and do more. Informa is listed on London Stock Exchange and is a member of FTSE 100, with over 10,000 colleagues working in more than 30 countries.

The Challenge

Between 2016 and 2018, Informa doubled in size via two major acquisitions. While this expansion enabled Informa to expand their offerings, it also created new challenges for accounting teams. The three companies not only relied on different ERPs but three, distinct shared-service organizations.

“After the acquisitions, it became clear to leadership that there was an opportunity to strengthen balance sheet integrity,” says Nick Redman, head of global process owners at Informa. “The ERPs themselves do not have that core functionality about balance sheet reconciliation. It was important to bring those three balance sheets together, as well as provide greater visibility and control.”

However, at the time, Informa and the two acquisitions still relied on a primarily manual reconciliation process.

“One of our acquisitions filed and stored spreadsheets within a folder. The other printed everything out every month for the center boss to go through and manually sign off,” says Redman. “Informa had implemented BlackLine Account Reconciliations several years previously in conjunction with an upgrade to SAP ECC but we were using it in a very limited capacity.”

Informa’s accounting staff relied on BlackLine as a “glorified tracker,” says Redman. “We would create our reconciliations in spreadsheets and then upload them as an attachment in BlackLine. That’s helpful but it turns BlackLine into just a repository. It can do so much more.”

Underutilizing BlackLine kept staff focused on manual processes instead of the deeper—and more engaging and strategic—accounting work.

“We didn’t have a regular cadence of reviews. Our internal reporting was poor,” says Nick Redman. “And we didn’t have a deep policy or a framework surrounding the reconciliations process.”

Why BlackLine

Redman’s goal was to transform reconciliations by enhancing the four “P”s—people, process, policy, and platform. This included optimizing BlackLine within Informa and expanding use of the solution to both acquisitions.

A key part of the project was participating in an optimization session with BlackLine consultants.

“BlackLine spent several days with us at one of our big shared service centers. It really opened our eyes to what we could be doing with Account Reconciliations,” says Redman. “They showed us how to bring data directly into BlackLine so we could track and age items within the platform. That alone was a big enabler to building quality and moving away from spreadsheets to a more system-based solution.”

The transformation project also included taking a closer look at how people were managing reconciliations, including their understanding of the process.

Nick Redman and his team spent significant time showcasing how BlackLine would help staff not only save time but increase the integrity of their work.

“In the beginning, half of the accounting teams were up in arms that they’d be losing spreadsheets for their reconciliations. It took a bit of effort, but people went from skeptical and wary to really embracing BlackLine. They realized early on that we were giving them better tools to do their jobs. We believe that upskilling our staff and giving them access to the best technology ensures their jobs are more rewarding.”

Staff are committed to an ongoing learning process and using the full capacity of BlackLine, now and in the future. “Our staff have joined the BlackLine Academy, they’ve completed the training courses, and they’re working to drive continual improvements to both their own skills and the process as a whole.”

The Results

Created a risk-based approach to reconciliations. The BlackLine solution underpins Informa’s revamped reconciliations policy.

“Prior to BlackLine, we were managing 7,000 recs every month. That’s 7,000 workbooks every single month. Just producing that in spreadsheets is a cottage industry and not a great use of people's time,” says Redman.

“Now, with BlackLine, we use rules and automation to help us evaluate risk. In the beginning, we asked ourselves, ‘Under what circumstances do we reconcile once a year or twice a year for our interim audit and final audit?’ We’re quite risk averse, so we probably over reconcile, but right now we reconcile 1,200 twice a year and about 1,000 every quarter. We do the remaining 4,000 every month.”

The team also reports every month on the volume of risk items, which are then reviewed line by line with the group CFO and the divisional CFOs. “With BlackLine, we’ve clearly seen over time that we’ve had a significant reduction in the volume of risk items.”

Increased balance sheet integrity. Informa’s manual, spreadsheet-driven balance sheet reconciliation across three companies lacked visibility and standardization.   

“Previously, we were managing by intuition and now, with BlackLine, we're managing by facts and data. As a result, we’ve greatly enhanced the integrity of our balance sheet,” says Nick Redman.

“We can see trends, performance, and data. We’re in a position where we have visibility and transparency over the performance. We can see how many recs were done by workday, all the way through what it looks like by center. We can see where we have risk items, where our recs have been rated unacceptable and why. All of that is within BlackLine. That visibility, for me, is a huge benefit because what you can’t measure, you can’t improve.”

Enabled more value-added and strategic work. By greatly reducing the manual work of reconciliations, teams are able to work more strategically from a risk and materiality perspective.

“Because we’ve standardized the reconciliations process, we can move reconciliation work away from the senior accountants. We want them to stop spending time producing and instead focus on reviewing,” says Redman.

“They should be business partnering, owning the numbers, and providing quality assurance around the numbers. That’s what they’ll be able to do because we’re automating manual work and reducing risk with BlackLine.”

Streamlined audits. BlackLine helps Informa manage and meet reporting requirements. This has been especially helpful during audits.

“Before BlackLine, auditors had to ask multiple individuals in multiple centers to dig out spreadsheet reconciliations. Now they can just plug in to BlackLine. It’s a lot easier for us and saves time,” says Redman.

“In this day and age, mismatched, non-standardized spreadsheet files in a variety of storage places don’t look as good as everything being in the same format in one single tool. And the balance sheet is a significant part of what the auditors are testing when they’re reviewing your financial statements.”

Enabled standardization and increased controls across service centers and offshore teams. Prior to BlackLine, a lack of standardization and consistent processes hampered reconciliation quality.

“Previously, preparers were not only preparing recs but rating them, essentially marking their own ‘homework.’ And of course, you’re going to mark your own work as ‘well done,’” says Nick Redman. “With BlackLine, we’re now able to separate the production of the work from the review of the work. It’s the next step forward in improving the quality of our reconciliations.”

 

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Informa Case Study
Industry

Media & Advertising

ERP

SAP ECC, Oracle

Region

Global

Company Size

Enterprise

Business Impact

Created a risk-based approach to reconciliations, increased balance-sheet integrity

Enabled more value-added and strategic work

Streamlined audits

Enabled standardization

Increased controls


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