AI-Powered automation for Accounts Receivable
Tate & Lyle has spent more than 150 years fulfilling its mission of “making food extraordinary.” Originally founded in the UK in 1859, when Henry Tate established his sugarcane refining business, Tate & Lyle was formed in 1921 following the merger of Henry Tate’s business with the refining business of Abram Lyle & Sons. The former competitors were soon producing about half of the sugar consumed in the UK.
Today, London-based Tate & Lyle no longer owns any sugar businesses, having transformed itself into a global provider of specialty food ingredients and solutions. It has more than 30 global manufacturing, processing, and distribution facilities worldwide that serve two main business units—specialty food ingredients and bulk ingredients—that count many of the world’s major food, beverage, and industrial companies as their customers.
The establishment of a global shared services center in Łódź, Poland, was a key part of Tate & Lyle’s consolidation efforts. From this central office, roughly 200 people in the finance department manage and reconcile balance sheets for thousands of general ledger accounts that cover transactions in the Americas as well as locations in Europe, the Middle East, and Asia Pacific. Prior to the Łódź office assuming responsibility for central finance operations, account reconciliations were regional; each office developed, maintained, and managed its own manual processes for reconciling accounts under its purview, including those for localized legal entities.
With the establishment of a central finance function, disparate account reconciliation processes would no longer be supported. The shared services and finance teams wanted to improve central oversight and efficiencies, increase visibility and tracking capabilities, and devote less time and resources to administrative tasks.
“Previously, our reconciliation processes were three-level and paper-based,” says Barbara Blaszczyk, head of finance operations at Tate & Lyle. “Manual reconciliations were recorded on spreadsheets, with paper signatures and different storage locations depending on the location of the account and team responsible. We wanted to have more control over the processes, and from an operational perspective, make cumbersome processes easier to manage.”
Increasing control over the reconciliation process would manifest itself in a number of different ways. It would result in more certainty over the precise number of fully reconciled accounts, improved documentation of follow-up action items, better transparency as a result of more consistent reconciliation processes, and less effort required to investigate reconciliation discrepancies.
According to Stephen Byers, group vice president and CIO at Tate & Lyle, the creation of the shared services group in parallel with the SAP systems consolidation project was the main driver for Tate & Lyle to make a business case for a solution to automate the account reconciliation process. “Centralizing financial activities into Łódź and establishing global common methods allowed us to streamline processes further with the use of automated reconciliations” he says.
The search for an automated account reconciliation tool gained steam about one year after the shared services center in Łódź assumed responsibilities for the central finance function. According to Blaszczyk, the main requirements for an automation solution were that it must offer full integration with SAP and non-SAP accounting systems, reconciliation by category for grouped accounts, standardized templates, electronic approval workflows, the ability to handle multiple currency transactions, basic reporting, and an intuitive, easy-to-use interface.
After an exhaustive vendor evaluation and request for proposal (RFP) process that included live demos from multiple vendors, Tate & Lyle decided to purchase the Account Reconciliations and Task Management applications from SAP partner BlackLine and signed a contract late in 2013. “The solution was assessed as the most reliable in all the areas that we evaluated,” Blaszczyk says.
To optimize use of the applications, Tate & Lyle performed the BlackLine implementation in parallel with a significant process simplification, knowing that automating account reconciliation would be far more effective with best-practice definitions in place.
According to Blaszczyk, the BlackLine project team’s first task was to create a responsibility matrix that listed account preparers and approvers for each account. The team also created a common chart of accounts where possible and categorized account modifications based on an account’s purpose. In addition, the team reviewed and updated accepted variances. All this was done in accordance with the Account Reconciliations product, which includes account templates, approval hierarchies, and auto-certification for static accounts.
Reduced time spent on administrative tasks. Starting with the first month-end close after going live with Account Reconciliations, the finance team noticed a significant decrease in the number of administrative tasks formerly devoted to reconciliations. Hunting for documentation or signatures in the form of emails, phone calls, or printouts, and thumbing through files all but disappeared.
Accelerated the account reconciliation process. “With a fully electronic approval and sign-off process, we now have the ability to easily review and approve reconciliations from different geographic locations,” Blaszczyk says.
For auditors, electronic storage and archiving means accounts are at their fingertips whether the account originates from the US, Europe, or the Middle East. And with auto-certification, Tate & Lyle can now auto-certify hundreds of accounts for non-critical reconciliations and for those with routine activity or an unchanging balance.
Increased efficiency with greater visibility. Using BlackLine’s out-of-the-box reports, Tate & Lyle is now analyzing the status of partial or incomplete reconciliations to determine the cause and ultimately discover where other efficiency gains can be found. “Efficiency has improved tremendously,” says Blaszczyk. “As a result of the reconciliation process becoming so much more efficient, the quality, completeness, and trust in the accuracy of each reconciliation has gone up significantly
Increased completeness and accuracy. Better accuracy is also a reflection of the Task Management application, which facilitates the month-end close process by tracking tasks associated with monthly close consolidation reviews. Task Management automates regularly occurring account activities and automates and stores activities that are attached to regularly scheduled audits.
Standardized and streamlined workflows. In addition, the application offers the option to standardize month-end close timetables, which Tate & Lyle is using to better meet deadlines; accounts are flagged, and users are notified when a deadline is approaching. Task Management replaces the use of spreadsheets for the recording and tracking of month-end close tasks. Without automated account reconciliation processes, if a preparer forgot to record a task or entered it in the wrong location, it created additional work at month-end to track down the missing documentation.
In the BlackLine application, an account will not be forwarded to the next preparer if a task is incomplete or missing the appropriate attachments or documentation. “At the end of any business day, we can see where we are with the month-end close, which tasks are completed, which are outstanding, and the overall progress of the close,” Blaszczyk says. “This helps open a line of communication between teams to identify whether there are any common challenges or issues with the month-end close that need to be addressed.”
Increased focus on value-adding tasks. Not having to chase down documentation or complete other mostly administrative tasks doesn’t mean the finance team is looking for things to do. Rather, the team is now actively pursuing more strategic tasks it never had time for before.
“As we move from manual reconciliations and gain better monitoring of month-end close tasks, we have far more time to spend on value-added activities such as analyzing data and preparing additional reports,” says Blaszczyk. “But what gives our team members the most satisfaction is the knowledge that they are now more invested in the process. They have started to enjoy preparing reconciliations and tasks—not only the technical side of it, but also the outcome of the process and the understanding of the business background behind the accounting transactions.”