Utilities serve a basic but critical function as part of infrastructure networks around the world. While electricity and natural gas represent core services, the move toward clean, renewable energy is imperative to combat climate change. Equally important is providing safe and reliable service to customers whether they reside in regulated or unregulated markets.
Utilities that are publicly traded companies are also subject to various audits under the Sarbanes-Oxley (SOX) Act. Beyond recordkeeping and reporting, accounting & finance deliver an important strategic function across the enterprise and serve as a critical differentiator by supporting safe and reliable service, providing financial insights, and partnering between the Office of the CFO and the business. Associated technology that enables modern financial processes leads to higher-value accounting & finance teams.
A Transformation Toward Efficiency and Cost Reduction
For UGI Utilities, a wholly owned subsidiary of UGI Corp., continued transformation is a key facet in accomplishing those objectives. The Denver, PA-based natural gas and electric utility serves over 730,000 customers in 45 Pennsylvania counties and one county in Maryland. It’s one of four subsidiaries under the UGI Corp. umbrella, including UGI Energy Services, AmeriGas, and UGI International.
According to UGI Utilities, the company expects to spend more than $265 million in 2021 on its infrastructure replacement plan — replacing natural gas mains and associated facilities. The initiative’s fiscal year plan targets nearly 68 miles of cast iron and bare steel mains. Over the last 10 years, the infrastructure replacement plan has led to nearly 600 miles of retired non-contemporary pipelines.
Accounting & finance are critical factors for ensuring success for such initiatives, and for supporting organizational innovation and business transformation. This sentiment was echoed by Laurie Bergman, Chief Accounting Officer and Corporate Controller for UGI Corp., in The Wall Street Journal. According to Bergman, the finance function can contribute to organizational growth and capacity through investments in technology and skills. “COVID-19 has given us good reason to focus on technologies that help us reduce costs, improve efficiencies, and increase insights that can be delivered to business leaders.”
UGI Utilities clearly understands the importance of accounting & finance being a core component of the company’s continued success. Through the development of a strategic roadmap, the organization can better anticipate the internal and external demands of the business — from both an accounting and IT perspective. Technology played an essential role as the company centralized and standardized its key financial close processes focusing on efficiency gains.
Accounting. Vivian Ressler, Senior Manager Sarbanes-Oxley, Plant Accounting and Accounts Payable for UGI Utilities, oversees SOX compliance and the testing and maintenance of controls, including account reconciliation controls, for the business.
“UGI Corp. and each subsidiary, with the exception of UGI International, operates its own accounting function. There’s an overall desire for a centralized, leveraged service center that serves all the business units to capture cost savings as well as develop process standardization across the organization,” Ressler says. “We’re establishing best practices that four business units can utilize rather than each adding vendors or creating account reconciliations manually,” she says. “With a standardized process, one service center can meet the needs of every business unit.”
Information technology. Jena Sweigart, Senior Manager Applications Development for Enterprise Solutions for UGI Utilities, says the IT component of the strategic roadmap crosses every functional area from finance to operations. The IT department works closely with each area of the business in an ongoing process to ensure technology projects are prioritized across the enterprise.
“As new technology partners are introduced into our IT space or applications expand beyond traditional areas and grow more robust, we need to include those trends in our IT roadmap. Existing in-house and new technology tools can help innovate our business and further benefit the bottom line.”
While UGI Utilities’ technology transformation was underway prior to 2020, the pandemic served as a catalyst for the strategic roadmap and its initiatives. BlackLine has been one of the focus applications during this transformation. BlackLine is leveraged as an application platform solution for UGI Utilities’ financial close task management, balance sheet substantiation, and audit facilitation processes.
The merging of four separate accounting functions into a single technology platform established process standardization across the organization. Ressler says implementing best practices, coupled with more dynamic processes, is also anticipated to result in cost savings.
“Uniformity now exists through a self-service process when internal stakeholders and external customers check an account balance or reconciliation detail,” she says. “We’re also looking for future opportunities to streamline the process further for greater enhancements and efficiencies.”
Sweigart adds that one of the core benefits of the business units coming together is elevated cross-business collaboration. “As we look for transformation opportunities, we’re learning about each individual business unit’s unique operating practices and experiences. It’s opening up networking across the UGI family of companies,” she says.
BlackLine unification. UGI Utilities’ use of BlackLine extends several years. During that time, AmeriGas and UGI Energy Services also implemented the application platform for their account reconciliation and task management processes. Sweigart says the timing supported the decision to bring the three business units under one BlackLine platform, while also expanding its functionality to UGI Corp.
“The business units were utilizing the same financial functionalities. As we explored streamlining the configurations and consistencies to align with our finance unit and move toward an application-sharing model, we saw the benefits of bringing three separate BlackLine instances into one for a unified view,” Sweigart says.
Sweigart adds there’s value in bringing BlackLine to other areas of the business and utilizing more of its functionality in the future. An immediate benefit of the BlackLine unification project was the streamlining of IT support processes. UGI now has a centralized IT team administering BlackLine and supporting user administration, which allows the Accounting & Finance groups to focus on their core financial activities.
Paving the Road with Transparency
SOX efficiencies with BlackLine. The SOX Act requires financial transparency by public companies, ensuring their data is secure and accurate. Ressler oversees testing and maintenance of SOX for UGI Utilities. She says the task functionality within BlackLine provides intuitive controls for SOX compliance.
“Users perform controls and upload supporting documentation into BlackLine, and then utilize electronic workflow for sign-off,” Ressler explains. “Key documents are retained in the cloud, and audit evidence like certifications are automatically captured where they can be accessed from anywhere. Auditors also have access and can see audit trails and pull the documentation when needed.”
BlackLine’s partnership with SAP. Several of UGI Utilities’ business processes, such as procure to invoice, invoice to pay, and record to report, occur in SAP ERP within the SAP S/4HANA platform. UGI Energy Services relies on SAP S/4HANA for its order-to-cash process and plant maintenance functions. UGI Corporation also uses SAP ERP and other SAP software across its enterprise. SAP integration and compatibility is a key consideration for UGI when evaluating other software partners. BlackLine is an SAP platinum partner offering solution extensions that complement SAP ECC, SAP S/4HANA, and other SAP software to modernize accounting. SAP recently recognized BlackLine with a Pinnacle Award for Partner of the Year — Solution Extensions. With this recognition, BlackLine is one of only 21 partners honored out of more than 20,000 in the partner network.
Several functional areas use partner applications within SAP ERP to support specialized functionality. BlackLine serves as a partner SAP extension for the accounting & finance area.
“BlackLine helps manage our controls processes, perform our accounting reconciliation, and provide a more centralized location for our audit groups and functions to access the materials they require,” Sweigart says. “Routine integrations occur from ERP to BlackLine during our month-end close processing. Finalized month-end account balances then feed into BlackLine for account reconciliation.”
The efficiencies gained from the automated processing of account balances are significant. It’s now unnecessary to manually verify that the reconciliation amounts tie to a separate ledger. Ressler says the integration removes those manual requirements that were once time-consuming and posed a risk for errors. She explains that new accounts are immediately populated into BlackLine and await assignment to an account reconciler, approver, and reviewer who confirm the appropriate supporting account documentation. “It’s beneficial to anyone who wants to ensure all of our accounts are appropriately reconciled and reviewed,” Ressler says.
Transforming Efficiently Without Disruption
The success of UGI Utilities’ transformation projects came largely from its preparation and established processes prior to implementation. During the onset of the pandemic, continued execution of the strategic roadmap was required and the criticality of workflow processes and solutions to the business became clear.
While the unification of BlackLine instances, for example, was planned pre-COVID-19, Ressler says the pandemic solidified the purpose and support of what BlackLine offers. While the business transitioned into the initial complexities of remote work, a strong technology backbone was already in place to support the transition, in many aspects.
“We did not experience any large disruption to our account reconciliation and key controls processes as we shifted to working remotely or as we transitioned to a single BlackLine instance,” she says. “The process was smooth. Advance preparation made it possible to ease employees into and out of the pandemic workflow environment.”
The transformation opened opportunities to share insights and BlackLine functionalities with other business units.
“Providing additional insights into functionalities and sharing information about processes can help everyone leverage their solutions and accomplish things they’re not already doing,” says Sweigart.
Aligning New Functionalities to a Strategic Vision
With the recent completion of its BlackLine unification project, UGI Utilities looks to the next phase of its relationship with the solution provider. Understanding BlackLine’s own roadmap and upcoming functionalities are critical for alignment with the finance organization’s strategic vision. UGI considers BlackLine, along with SAP, to be strategic vendors and will continue to look for new ways to automate using these technology solutions.
Stability and Agility a Measure of Success
During UGI’s transformation journey, UGI Utilities looks to its before and after a performance to measure its success. Sweigart says through its SAP ERP system and BlackLine solutions, UGI Utilities proved its ability to adapt to new and different situations in the work environment.
“Our SAP ERP and BlackLine applications allowed us to sustain business activity stabilization under challenging circumstances, both internally and externally, which is something we’re very proud of,” says Sweigart.
She adds, “If you’re part of a larger organization, no matter how much you know, there’s always room to learn about other areas of your business. This will only make your business stronger. Leverage the opportunity to understand the bigger picture and provide insight to create efficiencies.”