Electric vehicles (EV) manufacturers are experiencing a rapid increase in sales, with global sales up 61% in 2022. EV luxury car designer and manufacturer Lucid is no exception. After going public in 2021, Lucid expanded globally in record time. While this took the company from a revenue of 27 million to 608 million, it also strained the limited resources of their Finance & Accounting teams.

“We were very understaffed, and our process wasn’t scalable,” says Vicky Su, senior SAP accounting manager, at Lucid Group. “We weren’t operating at 100% from a balance sheet perspective. We missed some of the account reconciliation process validation reviews. This resulted in a control deficiency.”

The control deficiency put the rapidly growing company at risk, as did their manual accounting processes.

“We didn’t have a centralized place to save account reconciliation documentation. We were using spreadsheets for the checklist, making it difficult to track what was past due. It was also very difficult to find the right stakeholder for each account,” says Su. “Addressing the control deficiency—and transforming our process—became priority number one.”

Su and several team members had used BlackLine in previous jobs and knew the solution would help them address their control deficiency while also ensuring greater accuracy and efficiency. “We received good internal feedback about BlackLine, even before we did the demo. That’s one of the main reasons we decided to go ahead with the implementation.”

Just as critically, BlackLine’s strategic solution extension relationship with SAP would help ensure data integrity. Data is automatically transferred between BlackLine and SAP via a connector, providing seamless connectivity between the two platforms.

With the help of Accenture and BlackLine, the Lucid team implemented, tested, and went live with BlackLine Account Reconciliations and Task Management solutions in only two months. For their first year-end close with BlackLine, Lucid completed 500 account reconciliations, what Su calls “a huge achievement.”

Currently, the team is preparing for the next phase of BlackLine. “I know BlackLine has already had a huge impact on our efficiency and accuracy,” says Gilman Tsang, Accounting Manager at Lucid Group. “We’re looking at our workflow in anticipation of implementing BlackLine Transaction Matching and Journal Entry solutions.”

Eliminated the control deficiency of previous years. Prior to BlackLine, Lucid experienced a significant control deficiency.

“BlackLine 100% helped us with our control deficiency,” says Su. “With BlackLine, we now have a good handle on our overall balance sheet. We know that not only are reconciliations being done, but they’re being done correctly and in a standardized way.”

Adds Tsang, “We have a lot of overseas workers. Before BlackLine, they weren’t always familiar with our processes. Now, instead of telling them what to do, we’ve layered a systematic control throughout the entire accounting department that not only ensures accuracy but gives people a benchmark of what they’re supposed to achieve.”

Helped accountants go beyond the “what” to the “why.” BlackLine has made it easier and more efficient for accountants to perform their jobs. But it has also helped them more deeply understand the importance of reconciliations to the balance statement—and the organization.

“If someone is just booking journal entries, they can be replaced with ChatGTP. But that’s not what we want,” says Tsang. “We want accountants to uphold the quality of the financial statement, to go beyond completing a task to knowing why that task is important. We want them to ask, ‘Does this account make sense? Can I reconcile to my expectation? What information does this reconciliation tell me about the organization?’”

Uncovered foreign exchange issues. Implementing BlackLine also helped highlight a problem with Lucid’s foreign exchange transactions in SAP.

“Performing reconciliations in BlackLine helped us see that some of our transactions were reviewed inconsistently. The SAP and BlackLine transactions didn’t match,” says Su. “This gave us the opportunity to revisit our foreign exchange functionality and configuration in SAP.”

Reduced risk and increased accuracy of financial statements. Lucid migrated to SAP S4/HANA in 2020. Transactions in S/4 are automatically imported into BlackLine each day, which is critical to ensuring data is consistent and accurate across solutions.

“We see the automatic transfer of data from SAP to BlackLine as a way to safeguard our financial statements,” says Tsang. “For staff, the transfer adds a sense of formality to the process and reduces the risk of errors.”

Clarified accountant roles and responsibilities. Previously, Lucid’s primarily manual close process hampered accountants’ understanding of individual roles and responsibilities.

“With BlackLine, our accountants know exactly what they are responsible for on a day-to-day basis,” says Tsang. “They can see their tasks and what they’re in charge of. They’re happier because there’s more clarity, and they no longer have to rely on spreadsheets or sticky notes.”

Adds Su, “There’s no more guesswork. If you’re responsible for an account, it shows up in your workflow. As a result, everyone is more efficient.”

Ensured documentation is easily accessible for future audits. Previously, Lucid’s manual accounting process and reliance on spreadsheets made data and documentation difficult to find, which was especially challenging during audits.

“Now when our auditors ask for support, it’s already embedded in our daily work,” says Su. “It’s easy for them to access and doesn’t create a lot of work for us.”

https://www.counterpointresearch.com/global-ev-sales-61-q2-2022-byd-leads-market/