Cultivating an Automated Account Reconciliation Landscape
Today, CNH Industrial’s corporate accounting team uses the BlackLine Financial Close Suite for SAP Solutions from SAP partner BlackLine to automate and manage accounts and track close processes. But it wasn’t always this way. Until a few years ago, CNH Industrial relied on a homegrown application and a slew of manual processes to manage account reconciliations. The difference between then and now, to use a farming analogy, is akin to the difference between J. I. Case’s initial threshing machine in 1842 and the modern day combine, equipped with GPS and suited for the operator’s comfort: The previous environment was far more time consuming and error prone to the point of being almost unrecognizable from its modern-day equivalent.
“We had experienced accountants spending time printing and copying rather than doing value-added work,” says Jenna Stengert, Senior Corporate Accounting Specialist at CNH Industrial. “We wanted much more consistency and visibility than we were getting.”
The homegrown reconciliation application that business replaced was little more than a database, according to John Springsteen, CNH Industrial’s Intercompany Accounting Manager. “One inefficiency with the system was that account preparers, approvers, or reviewers could not attach any supporting documentation to a reconciliation,” he says. Hence, the company’s printers and copy machines were overworked, as account stakeholders stuffed file cabinets with paper-based documentation that had to be retrieved for an audit or other follow-up verification.
A lack of consistency also manifested itself across the 16 industrial locations in North America, along with several R&D facilities, because there wasn’t a standard month-end checklist for precisely what each location had to submit to corporate accounting. Poor visibility for management was compounded due to ambiguous posting rules for the many intercompany transactions between different business units.
“We had to find a better way to gain comfort on the completeness and accuracy of our financial statements,” Stengert says. The BlackLine solution would provide easier access to the underlying support and help the business achieve better consistency and visibility into the processes that are related to maintaining and tracking account reconciliations.
Goals: Introduce visibility and consistency into account reconciliation processes and tasks, mitigate risks in financial closings, and ensure accuracy of overall financial statements
Strategy: Implemented Account Reconciliation, Task Management, Journal Entry, Variance Analysis, and Intercompany Hub
Outcome: Increased reconciliation efficiency for more than 7,000 global SAP accounts, and established end-to-end visibility of account reconciliations, journal entries, tasks, and variance analysis, while increasing quality and global consistency