BlackLine Magazine - Issue Two by BlackLine

ISSUE TWO

CONTINUOUS ACCOUNTING

A Look At Continuous Accounting INTRODUCTION

Continuous Accounting COVER FEATURE

Finding & Fighting Financial Statement Fraud QUESTION & ANSWER

What To Expect From COSO’s Newest Framework COSO PREVIEW

Under Armour Keeps Its Cool – & Its Books – With BlackLine CUSTOMER STORY

Welcome To The Measurement Business CFO RISING

BlackLine Named A ‘Leader’ in Gartner’s 2016 Financial Corporate Performance Management Magic Quadrant INDUSTRY RESEARCH

How The Intercompany Hub Makes The World Smaller PRODUCT INSIDER

At Caesar’s International, A Rare Job That’s Catching On CLIENT PERSPECTIVE

Going Public? Heed This Advice From Connor Group PARTNER PERSPECTIVE

British Gas Benefits From Accounting Automation, Dashboard Visibility, Tightened Controls CUSTOMER STORY

Online Learning Company Learns How To Cut Close Cycle CUSTOMER STORY

BlackLine Gives Back To Atlanta GIVING BACK

A Look Into The BlackLine User Conference INTHEBLACK

READ MORE AT BLACKLINE.COM/MAGAZINE

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING

INTRODUCTION

A LOOK AT CONTINUOUS ACCOUNTING BY THERESE TUCKER

or years, management consultancies have touted the benefits of continuous improvement, the ongoing efforts in a business to improve products, services or processes

by increments. In doing so, companies can identify and eliminate waste, enhance operational excellence and focus on issues like growing the business, accountant stress, the risk of administrative and reporting errors, and the possibility of a material weakness.

“With continuous accounting companies can identify and eliminate waste, enhance operational excellence and focus on growing the business.” THERESE TUCKER

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ISSUE TWO: CONTINUOUS ACCOUNTING

THERESE TUCKER 6

INTRODUCTION

“We’re a leader in this movement to forge a new mindset in finance.”

At last, continuous improvement has come to the world of accounting and finance, as Russ Banham points out in our cover story, “Counting on Continuous Accounting.” We’re a leader in this movement to forge a new mindset in finance, breaking down the accounting tasks that usually pile up at the period-end close into a series of smaller steps, all of them automated, of course. In this issue, we also hear from renowned financial statement fraudbuster Tim Tribe, a forensic accounting specialist whose work should earn him his own CSI television series. Tim lays out ways in which such crimes are often perpetrated and how to ferret out evidence of their occurrence. In our CFO Rising column, BlackLine CFO Mark Partin dives into the alphabet soup of metrics that CFOs rely on to gauge the productivity of accounting and finance staff, noting some new measurements now available to the finance office, courtesy of predictive data analytics.

Our Product Insider column takes an in-depth look at BlackLine’s Intercompany Hub, which we built as a central clearinghouse for intercompany transactions. Like a traditional clearinghouse in a bank, the Hub ensures the efficient and expeditious exchange of accurate settlement data, reconciling the financial reporting systems across disparate divisions. In Partner Perspective we look at what it takes to get your accounting ready for an IPO, courtesy of industry expert Connor Group. And in our COSO Preview, COSO chair Bob Hirth takes us through the newest framework on enterprise risk management, due out by the end of the year. Filling out the issue is Claudia McDonald’s discussion with Allison Combs at Caesar’s International, regarding the hospitality and gaming company’s process improvements and what it takes to develop accounting applications. Finally, you’ll see how BlackLine is helping some real-world customers – and how BlackLine’s employees, customers and partners offered their own helping hands at our Giving Back Day in Atlanta.

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING

C O V E R F E AT U R E

COUNTING ON CONTINUOUS ACCOUNTING BY RUSS BANHAM

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ISSUE TWO: CONTINUOUS ACCOUNTING

he goal of any business function is to fulfill its obligations as efficiently and cost-effectively as possible. For accounting and finance staff, this

objective has been hampered by the historic paper-based nature of the processes that accountants undertake in closing the books. No longer must this be the case. Thanks to a concept called continuous accounting, accountants can schedule, on a daily basis, the demanding workload that piles up at the end of the month, quarter and/or year to close the books. Accountants can now attend to the tasks at virtually the speed at which the business’s transactions occur. The financial close process becomes a daily taskby-task operation, reducing accountant stress, the risk of administrative and reporting errors, and the possibility of a material weakness. Continuous accounting also offers a way for companies to more quickly understand how the business is performing - a boon to the financial planning and analysis staff and internal auditors. The process further provides the raw material, through predictive data analytics, that a CFO can use to evaluate the efficiency of the accounting and finance organization. Finally, continuous accounting fosters continuous improvement by forging a mindset to embed financial closing tasks in each day’s workload, and to use automated technology to manage this process and measure its efficiency. “Finance finally is being transformed,” says Gregory Galeaz, formerly the leader of PwC’s insurance finance transformation practice and now head of the firm’s U.S. insurance practice. “By using end-to-end automation, you now have the ability to build quality into the accounting process. This helps you balance workloads continuously across the period, reduce the possibility of errors, and eliminate the time that’s ordinarily wasted on fixing them.”

COVER FEATURE

“Tasks can be scheduled early in the accounting process and embedded within accountants’ workflows. By breaking the tasks into smaller pieces and then automating each one, their completion becomes ‘routinized.’” GREGORY GALEAZ

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ISSUE TWO: CONTINUOUS ACCOUNTING

In The Beginning

By the time the system was ready to use,

Why has it taken so long to get to this point?

accountants had to churn through substantial

The historic process of putting accounting

amounts of data. As the business grew, the

records into journals and ledgers, adding up the

volume of data exploded. “Accountants want

numbers, reconciling and classifying the results

to be able to methodically tick and tie the

into standardized financial statements was, while

journals and ledgers to make sure everything

slow and rife with obstacles, fairly standardized.

balances,” Kugel says. “Where it doesn’t, they want to be able to quickly identify

When computers came on the scene, they

the source of the problem and fix it.”

simply took the same paper journals and ledgers that accountants had used for

Since the answers were buried in a

centuries and transferred them into the

mountain of financial data, the time it

computer system. Unfortunately, the

would take to attend to the task would

technology limits that then existed required

distract from the accountants’ daily

batch processing of this financial data.

bookkeeping function. The solution was to push off much of the work into a period that

COVER FEATURE

“You had to run all these lengthy processes

became known as the “last mile” of finance,

in an overnight window when they wouldn’t

a phrase associated with the final steps of

interfere with operations,” Robert Kugel, senior

a criminal condemned to the gas chamber.

vice president at IT research and analysis firm

This is a harsh analogy, but it underscores

Ventana Research, explains. “In this respect,

the colossal workload shouldered by

computer-based accounting systems offered

accountants at the period-end close.

only a limited improvement over paper.

This work is so demanding that the CFO

Different departments had to wait until the

typically must recruit expensive temporary

end of the month or quarter to perform most

accountants and other non-salaried

of the financial close.”

employees to bear some of the burden.

The time it would take to attend to the task would distract from the accountantsâ&#x20AC;&#x2122; daily bookkeeping function.

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ISSUE TWO: CONTINUOUS ACCOUNTING

“The bottom line is that all this stuff isn’t postponed until the last minute.” BRAD BAER

COVER FEATURE

Compressing Time There is no question that compressing into a few days the detailed tasks that accountants must undertake to close the books makes their work pure drudgery. For example, they often must accumulate and review the accuracy of tens of thousands of spreadsheets to verify and document that the balances are correct. Since spreadsheets lack transparency, it is difficult to detect mistakes, particularly when the clock is ticking. Determining who in the organization did a reconciliation, or who should have done it, can be a forensic nightmare. Accountants must reach out to coworkers by phone, email and text. Sometimes a colleague can’t locate a document, has failed to preserve it, or has left the company’s employ. “Imagine all these spreadsheets and an accountant trying to figure out how the error occurred and who is responsible for it,” says Therese Tucker, founder and CEO of BlackLine. “The work is grueling.” The process further slows down the availability of financial data for internal planning and analysis, and this can put an organization at a competitive disadvantage. The time-consuming work also may result in delayed testing of the company’s Sarbanes-Oxley (SOX) controls by internal audit. This is not a good thing. Under Section 404 of the Sarbanes-Oxley Act, internal control deficiencies must be disclosed in the annual report. The reverberations of a disclosure can shake investors’ confidence in the organization, as it may indicate inefficient accounting and finance processes, subpar technology and inferior management, combining to adversely affect the company’s reputation.

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ISSUE TWO: CONTINUOUS ACCOUNTING

Automated software tools can now help split the peaks and valleys of an accountantâ&#x20AC;&#x2122;s workload into discrete elements.

COVER FEATURE

How Continuous Accounting Works

end of the month, quarter and year largely disappears.

These varied problems with closing the books - overwrought accountants, higher

“By systematizing and automating the closing

labor expenses due to the need to staff

process, you’re no longer working backwards

up, and inadequate time for planning, analysis

to explain what happened,” says Galeaz. “You

and SOX-have long been in need of a

have the time and ability to look at trends and

solution. Continuous accounting appears

to influence outcomes.”

to be the answer. Tucker concurs. “By creating a mindset to embed Automated software tools can now help split the

the closing tasks into the daily workload, and then

peaks and valleys of an accountant’s workload into

using automated technology to manage the work,

discrete elements. Tasks can be scheduled early

you optimize the accounting process one task at

in the accounting process and embedded within

a time,” she says.

accountants’ workflows. By breaking the tasks into smaller pieces and then automating each

Three Steps

one, their completion becomes “routinized,”

The first step in this journey is to assess how

says Galeaz.

a particular accounting task is executed to close the books. Step two is to analyze how

Accountants can now attend to their closing

this process can be improved by scheduling

tasks at a deliberate pace. With visibility into

the task as a series of smaller steps. Step

each day’s transactions, they can perform the

three is to automate the process.

data summations, reconciliations, error checking and corrections as part of their daily work. They

Let’s take the example of an organization’s

can track their close calendars and auditor PBC

current payroll process. The task is to ensure

lists on a more regular basis. The pile-up at the

accurate federal and state tax withholdings,

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ISSUE TWO: CONTINUOUS ACCOUNTING

as well as the withholdings for health insurance

if and when all the payments cleared the

and contributions to an employee’s 401k plan.

banks, and then determine if the withholding amounts matched the payments provided to

“The continuous tracking of all these transactions

the government, the health insurer, and the

- from creation to action to reporting - is next

financial firm handling the 401K plan. The staff

to impossible in many accounting and finance

is further responsible for tracking the payroll

organizations today,” says Brad Baer, partner,

disbursements that fail to clear, and remitting

and leader of the finance transformation

them to the appropriate state as part of the

advisory practice at management consulting

escheat process.

firm UHY Advisors Inc. To ensure proper reporting, accountants typically “You don’t want a situation where you’re

must look through numerous spreadsheets with

overpaying taxes and now have to claw back

thousands of checks, wires, and ACH payments.

these overpayments from a state,” Baer says. “You also don’t want to be in a situation where

“Ensuring everything withheld was actually paid

you’ve underpaid the taxes.”

is typically a tedious process,” Baer says. “The stress is enormous. If issues arise and are not

Tracking withholdings is a challenge for a

resolved, there is significant risk from the federal

business with thousands of employees because

and state governments concerning proper

it requires managing the transactions driving the

reporting of the escheat tax.”

payroll process, in addition to the payroll activity

COVER FEATURE

and reporting. This information may be

The solution requires splitting the work into

in different files in the ERP and payroll

discrete tasks and using automated account

processing systems, and involve various banks.

reconciliation and transaction-matching tools.

Accounting and finance staff must discern

With these tools, the withholdings for the health

insurer and the financial firm providing the 401K

accountants to close the books, or track the

services can be managed at a transactional level

number of errors committed during the time

on a real-time basis throughout the transaction

period. Such insights can guide more refined

lifecycle. Also, the tools ensure that the various

accounting and finance practices going forward.

banks have cleared the checks, wires and ACH payments.

By providing the means to work at a more measured pace, continuous accounting can also

If the withholding data at the banks doesn’t

help improve the work-life balance for company

agree with the files in the ERP and payroll

accountants. And the time that accountants do

processing systems, these issues can be

have can be better used, thus helping the CFO.

identified in real time. Accountants can take care

As Tucker says, “A more systematic approach to

of any matters as part of their daily schedule.

accounting frees up the accountants to contribute to the strategic goals of finance leaders with

“If there is a problem, an accountant can call

value-added analyses of financial performance.”

up the payroll processing provider, for instance, and say that something doesn’t add up,” Baer

“This was impossible before, given their time

says. “The bottom line is that all this stuff isn’t

constraints,” she says.

postponed until the last minute.” This future state of accounting and finance

Continuously Improving

optimization is now at hand. All it takes is the

Continuous accounting also promises continuous

determination to no longer abide the status

improvement of the accounting and finance

quo, and the resolve to improve it.

function. Using predictive analytics, CFOs can assess the effectiveness of the accounting process by measuring the time it takes

RUSS BANHAM IS A PULITZER-NOMINATED FINANCIAL JOURNALIST AND AUTHOR WHO HAS WRITTEN MORE THAN SIX THOUSAND ARTICLES FOR SUCH PUBLICATIONS AS THE WALL STREET JOURNAL, FORBES, INC., FINANCIAL TIMES AND THE JOURNAL OF ACCOUNTANCY

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ISSUE TWO: CONTINUOUS ACCOUNTING

QUESTION & ANSWER

FINDING & FIGHTING FINANCIAL STATEMENT FRAUD WITH FORENSIC & LITIGATION SPECIALIST TIM TRIBE

inancial statement fraud is rare, but when it does occur the financial and reputational damage can be devastating. Individuals

TIM TRIBE

in private and public businesses have committed financial statement fraud, their reasons ranging from a need to secure bank financing or investor interest to the desire to fulfill high shareholder expectations. These illegal gains are achieved through deliberate misrepresentation, misstatement or omission of financial statement data, and can create a false impression of an organization’s financial strength. Tim Tribe leads the forensic and litigation services practice at Phoenix-based accounting firm REDW LLC. He’s considered to be one of the world’s top forensic accounting professionals, a field focused on the analysis of accounting records for fraud, litigation, damages calculations, and questions over accountants’ standard of care. BlackLine recently sat down to chat about financial statement fraud and how companies can detect it before the financial statement goes out.

BLACKLINE MAGAZINE Let’s start with

Two people with different layers of checks and

the bad stuff first – what are the statistics

balances are often needed to make the checks

on financial statement fraud?

and balances go away with a wink, wink, nod, nod, `I’ll look the other way, you approve,

TRIBE Well, they’re pretty startling.

and we move forward.’

First of all, financial statement fraud is one of three general categories for occupational

Sometimes you have situations where someone

fraud. The broad categories are asset

in the C-suite stipulates that the company

misappropriation, which is basically stealing

simply has to hit the numbers, and in a very

stuff; corruption, which is misusing privileges;

blatant way demands to do whatever it takes.

and then financial statement fraud, which

It doesn’t matter that the low-level employees

is the basic altering of statements.

doing the journal entries were told to make up the numbers or they were afraid of losing their

The top two categories are where most of the

jobs. They all end up going to jail.

action occurs. According to the Association of Certified Fraud Examiners, financial

BLACKLINE MAGAZINE Are there instances

statement fraud actually makes up only 9.6

where employees are told they’ll be paid for

percent of all occupational fraud. But it hurts

their scheming - given their slice of the pie?

the most, costing a company $975,000 on a median basis, compared to $125,000 for asset

TRIBE Sure, we’ve seen incentive bonus

misappropriation and $200,000 for corruption.

compensation plans set up in such a way that employees are encouraged to lie and cheat.

With financial statement fraud, there’s this

They’re incentivised to forge the numbers.

criminal philosophy that you either go big or

The pressure is enormous. You’ve got the market

you go home. It’s not brain surgery to tack on

pushing you, the competitive pressures, and the

a couple extra zeros to the journal entries.

activist investors on the board slamming their fists on the table. So you lie. And then after

BLACKLINE MAGAZINE Low frequency

a while, you run out of lies.

but high severity - got it. So who within organizations typically is responsible for

BLACKLINE MAGAZINE Once these schemes

committing financial statement fraud?

are put in motion, are they difficult to stop?

TRIBE Usually it’s associated with employees

TRIBE These things build momentum.

who are in significant positions of management

They start with a couple journal entries to

and control, but we’ve seen instances where it

squeeze out an extra penny per share, and

involves a business partner in a joint venture.

then the next quarter comes around and the

The problem is that the fraud typically isn’t

company still isn’t hitting the numbers so it

restricted to a single person, as you need a

squeezes out a few more pennies per share.

certain amount of collusion to pull it off.

On and on it goes and goes.

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ISSUE TWO: CONTINUOUS ACCOUNTING

“With financial statement fraud, there’s this criminal philosophy that you either go big or you go home.” TIM TRIBE

QUESTION & ANSWER

BLACKLINE MAGAZINE How difficult is

TRIBE Sure. One irregularity is when journal

it to discern when a company is making

entries are made up on weekends and holidays.

up the numbers?

That’s because the employees perpetrating the fraud know there will be no one around looking

TRIBE These things typically come to light

over their shoulder. That’s not to say that there

during economic downturns because the

aren’t people there doing legitimate work, but

perpetrators have run out of things they can

if there is a pattern of this work on such days,

do. The journal entries end up being so big

it’s a significant red flag. You can set up the

and blatantly false that the fraudsters can’t

automated system to provide this information.

get away with it anymore. When the entire industry is in the tank and you’re hitting your

Another good idea is to identify certain

numbers, skeptical eyebrows tend to rise.

accounts you feel are high risk from a financial statement fraud standpoint. Using an

BLACKLINE MAGAZINE An honest CEO

automated tool, you can set up the controls to

shouldn’t have to wait until an economic

limit access to these accounts. This way, you’re

downturn to find out the books are cooked.

notified of any activities that occur with these

What can be done to spot financial statement

accounts beyond the granted access.

fraud in its earliest stages? BLACKLINE MAGAZINE Any other best TRIBE One of the five top ways to detect

practices you can talk about?

fraud is proper use of account reconciliations. By automating this process, you’re in a

TRIBE There’s tremendous sense in forming

good position to stop it. You can then build

a fraud prevention program, where you put

in fraud-prevention tools and predictive

together people from across the company to

analytics to detect red flags. You can’t do this

set up the systems and controls and monitor

in a timely or opportune manner with manual

them, fixing small things before they erupt into

processes. It has to be automated to sift

big problems. That way, speedier resolutions are

through the numbers looking for anomalies

possible. For instance, the number one source

that tell you bad things are happening in

of fraudulent activities is a tip by an employee,

real time.

anonymously or on the record. Once the systems and controls are in place, honest employees are

BLACKLINE MAGAZINE Can you provide

better equipped to spot the irregularities—before

an example?

the fact and after.

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ISSUE TWO: CONTINUOUS ACCOUNTING

COSO PREVIEW

WHAT TO EXPECT FROM COSO’S NEWEST FRAMEWORK

BOB HIRTH

BY JIM BUCHANAN

ow that its 2013 Internal Control Framework has been embraced and adopted by business, the Committee

of Sponsoring Organizations of the Treadway Commission is in the process of following up with a second framework revision; this one for the Enterprise Risk Management Framework first produced in 2004. The commission recently sent a draft version to its advisory council, and will soon release the draft for a 90-day public comment period. COSO expects the final version to be ready by the end of the calendar year, if not sooner. According to COSO chair Bob Hirth, the new framework is likely to be titled “Enterprise Risk Management – Aligning Risk with Strategy and Performance.” He says it will feature some differences in format from the 2004 version, and will reflect changes in enterprise risk management since then.

One change will be the number and types of

wealth of information available, and that

component categories. The 2004 framework used

information can help them understand

eight basic components, such as Objective Setting

and manage risk more effectively.”

or Monitoring. The new framework will have just five, but they’ll be more encompassing: • Risk, governance and culture • Risk, strategy and objectives

The goal for users of the new COSO ERM Framework will be a “risk-adjusted” strategy that can pay off at the bottom line. If, for instance, a business is planning to expand to

• Risk, management and performance

a new geographical market, factoring risk into

• Risk, information, communication

strategic planning could help the finance group

and reporting • Risk in execution

get a head start on researching, testing and installing controls in advance of the move.

Finding Some Discipline

Adding Tools

Those new components tell the story of how

Another feature of the new framework will roll

business and technology have changed since

out more gradually. This will consist of tools in

2004, and why COSO decided the time was

the form of templates that businesses can use to

right to create its new framework.

describe and report on the financial risks they’re likely to face in a given scenario.

“We want to move enterprise risk management from a process to a discipline, says Hirth,

As an example, a reporting tool might make it

“To move the concept of risk management higher

possible to show how a specific risk would play

up in the decision-making chain. We want it to be

out for four levels of enterprise management.

more integral to planning, to become a discipline that is used throughout the organization.”

“The tool could show how a particular issue would impact each person in the reporting chain, from

As with COSO’s Internal Control Framework,

the accountant to the business unit manager, to

technology now makes it possible to do just

the executive and even the board member,” Hirth

that. Changes in the COSO 2013 Internal Control

says. “And the information would be consistent

Framework were largely inspired by the fact that

from level to level, to facilitate communication

newer technologies, such as automation, had

across all levels.”

made it possible to improve the quality and effectiveness of controls. Newer

How They Fit Together

technologies, available both in and outside the

The coming ERM Framework differs from

enterprise, now help bring more factual weight

COSO’s Internal Control Framework in the

to strategic planning.

same way that risk management differs from internal control. Where internal control deals

This is where so-called big data comes into

with specific problems, devices and strategies,

play, Hirth notes. “Companies now have a

risk management is more fluid, says Hirth.

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ISSUE TWO: CONTINUOUS ACCOUNTING

“You can more or less bear-hug an organization from an internal control perspective, but risk management is harder to pin down. There are many more outside variables and uncertainties.” That specificity is why the COSO Internal Control Framework is prevalent among public companies. Hirth says that every company that follows SOX (the Sarbanes-Oxley Act) now uses the COSO Internal Control Framework. But he expects the new ERM Framework to cast a wider net – to be used by organizations of all types and sizes, including not-for-profits, government agencies and state and local offices. As for the two frameworks’ synergies, Hirth notes that the Internal Controls Framework will fit neatly into the Risk in Execution section of the ERM Framework. “The two concepts really go hand-in-hand,” he says. “You likely need effective internal control to have good risk management. Effective internal control will free up management’s time to concentrate on strategy.”

JIM BUCHANAN IS EDITOR OF BLACKLINE MAGAZINE

COSO PREVIEW

“You can more or less bear-hug an organization from an internal control perspective, but risk management is harder to pin down. There are many more outside variables and uncertainties.” BOB HIRTH

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ISSUE TWO: CONTINUOUS ACCOUNTING

CUSTOMER STORY

UNDER ARMOUR KEEPS ITS COOL – AND ITS BOOKS – WITH BLACKLINE BY CLAUDIA MCDONALD

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ISSUE TWO: CONTINUOUS ACCOUNTING

nder Armour, Inc. knows all about keeping cool. Based on its ability to deliver a better mousetrap – or,

specifically, a better approach to the problem of sweaty T-shirts and undergarments for high-energy athletes - the multi-billion dollar company has grown to become a world leader in the performance-apparel and footwear markets. But with its consistent 20-percent-or-better yearly revenue growth, Under Armour’s own energy was creating some real challenges for the company’s accounting team. Account reconciliations and other processes were handled manually, and this caused slowdowns in tracking company finances. To track account recs, the team printed out reconciliations in three-ring binders; binders that were created and stored at several locations. These added a degree of complexity to the reconciliation process – complexity that UA didn’t need, considering the company processed about 800 transactions in a single quarter in 2015. It was common for supporting information to be printed out and stapled to the manuallyprepared journal entries. And the review process, also handled manually, required staffers to consult a sign-off matrix to determine current status. Senior corporate accountant Michael Williams notes that the manual system put the company at risk from a controls perspective, as well: “It’s critical to have account balances reviewed by the proper people before we report results and publish our financial statements.”

CUSTOMER STORY

“It’s critical to have account balances reviewed by the proper people before we report results and publish our financial statements.” MICHAEL WILLIAMS

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ISSUE TWO: CONTINUOUS ACCOUNTING

“And from a scalability perspective, BlackLine has given the corporate headquarters the visibility we need as we expand globally and stand up offices with small accounting teams across the globe.” MOLLY BOYLE

CUSTOMER STORY

Restoring Control Under Armour brought in BlackLine’s Account Reconciliations product in late 2012, and has since added Task Management and Journal Entry. The company is now able to auto-certify about 25 percent of account reconciliations, and estimates it saves at least a full day of administrative time each month. Also, according to senior manager of corporate accounting Molly Boyle, “We can now complete our end-to-end reconciliation process several business days earlier than before.” BlackLine’s software has also helped Under Armour put in place better controls than before. Some examples: •

Trial balance checking – To help the company analyze the risks associated with GL accounts, BlackLine lets Under Armour assign risk ratings to accounts, and then determines the necessary level of review based on company policy.

•

Scalable approval workflow – Automated review workflows see that journal entries are routed to appropriate managers, especially important for some of the larger, thousand-line journal entries.

•

Controlled auditor access – BlackLine’s auditor function gives auditors read-only access to journals, reconciliations and key controls, and ensures that all records have completed their internal reviews before becoming visible to the auditors.

•

Best of all, BlackLine is giving Under Armour the freedom to grow without being restrained by outdated financial processes.

“We get a lot more value out of the time that our staff and senior managers are spending during and after we close the books,” says Boyle. “And from a scalability perspective, BlackLine has given the corporate headquarters the visibility we need as we expand globally and stand up offices with small accounting teams across the globe.”

CLAUDIA MCDONALD IS A CONTRIBUTING WRITER FOR BLACKLINE MAGAZINE

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ISSUE TWO: CONTINUOUS ACCOUNTING

CFO RISING

WELCOME TO THE MEASUREMENT BUSINESS BY MARK PARTIN

e CFOs are in the measurement business. To assess our organizations’ financial stability and progress, we rely on an

alphabet soup of metrics—EPS, ROE, ROI and EBITDA, to cite a few acronyms. But there is an equally pressing

MARK PARTIN

need to measure something else - ourselves. CFOs are essentially paid to analyze the flow of capital into and out of the business, but how we go about these tasks is a measure of our overall effectiveness and the operating efficiency of the accounting and finance staff. There are conventional yardsticks to gauge this productivity; metrics like the time it takes to close the books, the total costs per full-time finance employee, and the financial report error rate, among others. Many accounting and finance departments are also measured as a percent of the organization’s total revenue, with the best of us supposed to cost less than one percent. Well and good. But in order to facilitate continuous improvement, modern CFOs need timelier and more granular details to learn where we may be going off the rails.

Is This Really Bad?

Certainly, a good CFO will want to know the

There’s nothing wrong with conventional

percentage of the balance sheet that was un-

measurements of accounting and finance

reconciled. But a great CFO also wants to

performance, but they tend to be very general,

know this metric in relation to the underlying

failing to account for the differences in strategy

processes performed:

and operations from one company to the next. My total costs per FTE might be higher than my competitors, but is this really bad?

• The average number of assignments per user • The average assignment rejection rate

Maybe we perceive our accountants as more of a strategic function, and are willing to pay them extra for this value. And just because your time to close is better than ours doesn’t mean we’re

• The average number of completed assignments • The average number of days to completion for a selected assignment

having trouble reconciling the accounts. These insights can only be acquired if the I’m not advocating that we jettison the

provider of the accounting and finance

conventional metrics or even change them.

system has stored enough data to analyze

Good CFOs should care that all the accounts

and benchmark against industry peers. The

are accurately and quickly reconciled before the

data should come from millions of reconciled

reporting goes out, even insisting that a variance

accounts, posted journal entries and executed

analysis be conducted before the recs are

tasks, all culled from the specific actions

completed. But great CFOs should want more—

of users. For the CFO looking to run a tight

the ability to access real-time data analyzing

ship, this dynamic data becomes actionable

the efficiency of our processes at far more

intelligence.

granular levels. The CFO should operate like a data scientist

If You Can, You Should

of sorts, leveraging analytics to divine unique

With a cloud-based, automated accounting

correlations, outliers and trends. We may

and finance system, this opportunity is at hand.

still be swimming in an alphabet soup of key

Richer presentations can be delivered to the

performance indicators, but we’ll be swimming

CFO, with metrics designed to provide specific

more deeply, scavenging for the golden insights

answers to specific questions about the

guiding our continuous improvement and

business. The details are in the data, accessible

measuring our performance against our peers

to strong analytics.

and our own internal goals.

MARK PARTIN, CFO AT BLACKLINE, HAS EXTENSIVE EXPERIENCE OVERSEEING FINANCE ORGANIZATIONS AT HIGHGROWTH COMPANIES, MOST RECENTLY AS CFO OF FIBERLINK COMMUNICATIONS, WHICH WAS ACQUIRED BY IBM

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING

KEITH TYNDALL

INDUSTRY RESEARCH

BLACKLINE NAMED A ‘LEADER’ IN GARTNER’S 2016 FINANCIAL CORPORATE PERFORMANCE MANAGEMENT MAGIC QUADRANT BY KEITH TYNDALL

business must boldly blaze a trail that others follow, striving to do what’s best for its customers, probing what the future will

demand of them, and making innovative decisions that help move them forward. These are what we believe demonstrate the attributes of a true business leader. When Gartner recognized BlackLine as one of four “Leaders” in its new FCPM Magic Quadrant, we believe the selection affirmed our longstanding customerfocused direction. The new Financial Corporate Performance Management category focuses exclusively on financial close software companies, providers of intercompany management, account reconciliations,

journal entries, variance analyses, and financial

customers worldwide, we continue to serve

controls testing products.

as the trusted partner for accounting and finance organizations around the world. This is

Previously, Gartner captured and categorized

something I’m proud of, along with the entire

financial and accounting software providers in

team of BlackLiners.

a single CPM Quadrant. This year, it split this category into two segments—FCPM and SCPM

With given market dynamics in the finance

(Strategic Corporate Performance Management).

technology market, we believe Gartner’s decision

The latter segment comprises providers

to separate planning and the financial close means

of Financial Planning & Analysis tools for

that companies can now pursue continuous

budgeting, planning, modeling and reporting.

improvements in each of these areas with their chosen providers. Our continuous accounting

The new FCPM category upholds our time-

model is predicated on constantly moving the

honored approach to designing financial close

needle for our customers, providing a balanced

technology products from the ground up. From

alternative to the madcap sprint to close the

the beginning, our unified technology solution

books by compressing these tasks into a few

was built specifically to help accountants

days at the end of the month, quarter, or year.

close the books more efficiently, without hybrid software/hardware, multiple sign-

Obviously, we are greatly pleased by our selection

on procedures, and expensive middleware

as a leader in the new FCPM category. On behalf

or upgrade costs that gum up the value

of our customers, we have always been an

proposition. Only a fully unified platform can

imaginative and enterprising organization.

deliver consistent processes, visibility, greater

That’s the magic in our business leadership.

usability, and a holistic view of the organization. On the Magic Quadrant, the respected

GARTNER, MAGIC QUADRANT FOR FINANCIAL CORPORATE PERFORMANCE MANAGEMENT SOLUTIONS, JOHN E. VAN DECKER,

technology research firm plots major providers

CHRISTOPHER IERVOLINO, 31 MAY 2016

in four quarters across two axes—their “Ability

GARTNER DOES NOT ENDORSE ANY VENDOR, PRODUCT OR SERVICE

to Execute” and their “Completeness of Vision.”

DEPICTED IN ITS RESEARCH PUBLICATIONS, AND DOES NOT ADVISE

is weighted on criteria such as marketing, sales,

HIGHEST RATINGS OR OTHER DESIGNATION. GARTNER RESEARCH

product, geographic and vertical/industry strategy; business model; and innovation. From my standpoint, I take pride in the fact

TECHNOLOGY USERS TO SELECT ONLY THOSE VENDORS WITH THE PUBLICATIONS CONSIST OF THE OPINIONS OF GARTNER’S RESEARCH ORGANIZATION AND SHOULD NOT BE CONSTRUED AS STATEMENTS OF FACT. GARTNER DISCLAIMS ALL WARRANTIES, EXPRESSED OR IMPLIED, WITH RESPECT TO THIS RESEARCH, INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS

that the ‘completeness of vision’ reflects our

FOR A PARTICULAR PURPOSE.

ability to serve our customers. With nearly 1,500

KEITH TYNDALL HEADS CORPORATE MARKETING FOR BLACKLINE

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING

PRODUCT INSIDER

HOW THE INTERCOMPANY HUB MAKES THE WORLD SMALLER BY JIM BUCHANAN

or today’s business, the challenge of geographical growth is less daunting than ever before. Technology makes setting up a new storefront

TALIA MARINO

nearly as easy as putting up a website. Hiring a new sales agent? Due diligence, thanks to social media and the fathomless depth of the Web, takes days rather than months. For a growing business, the problem isn’t starting up. It’s keeping up – keeping up with growth in sales, growth in partners and new customer types, and, for many, growth in the numbers and types of financial reporting systems. Today’s technology notwithstanding, many organizations are still hindered by the difficulties of reconciling the financial reporting systems for their various divisions or other entities. They’re forced to rely on spreadsheets, emails, and attachments, any of which can be misread or missed entirely, and on ticking and tying their way through thousands or even hundreds of thousands of records. Problems with financial reporting can impact the bottom line, of course. But they can also set off issues of confidence and trust that can damage the reputations of the organization and its executives.

A Central Clearinghouse

New This Year

There’s no single, overnight panacea for issues

The Intercompany Hub continues to grow

like these, of course. But a solution that comes

in functionality. An example of new features

close is BlackLine’s Intercompany Hub.

for 2016:

The concept is simple. The Hub serves as a central clearinghouse – a kind of honest broker

BI-LATERAL NETTING This function

- for intercompany transactions. It keeps data

automatically aggregates all transactions

current and accurate through interfaces to

between two entities into a single, netted view.

the organization’s financial reporting systems,

The view can be filtered to reflect net-payables

including ERP and non-ERP systems.

or net-receivables perspectives, taking into account net eligibility requirements of certain

A portfolio of templates helps with setup,

transactions and/or entity relationships. The

defining entity relationships, governance

function simplifies settlement and facilitates

guidelines, VAT tax and currency details,

management insight into what can be very

validation logic and approval workflows.

complex global processes.

Supporting documentation and comments are

AUTOMATIC INVOICING For some countries,

maintained within the transaction record itself,

regulations require invoicing for certain

which eliminates the need for users to spend

intercompany transactions. The Hub can now

countless hours hunting down documentation or

automatically generate the invoice and attach

tracing agreements made over email and phone

it to the transaction record as supporting

conversations to substantiate a transaction.

documentation. This can save substantial time over having to create hundreds of

Once underway, the Intercompany Hub lets the

invoices manually.

accounting team create, post, review, approve and settle intercompany transactions. The Hub

BULK CERTIFICATION OF INTERCOMPANY

automatically creates an audit trail that can be

TRANSACTIONS The preparer can select

queried from the BlackLine dashboard.

multiple intercompany transactions to certify at once, and can also have the records

Accounting and finance managers thus gain

automatically certified upon import,

real-time intelligence into the business by viewing

with the records automatically passing

settlement amounts and having access to relevant

through the required validation processes.

documentation. This can pay dividends at all

This is an ideal way to speed up the month-

levels of the organization. It maximizes accuracy

end close, when the accounting team has

and timeliness of financial reports, and fosters

to book large numbers of outstanding

agility and trustworthiness in strategic planning.

intercompany transactions.

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING

GLOBAL SETTLEMENT DISPLAYS Users with

“The Intercompany Hub changes that to a

appropriate access credentials can now view

proactive model. Agreements are met ahead

aggregated global transaction value details

of time, before anything is booked or hits the

by toggling to a grid or matrix presentation.

general ledger. The intercompany transaction

The grid features columnar representation

information becomes the data source for the

of entity relationships and the values of the

journals that will be booked. That lets us mitigate

transactions for each relationship. The matrix

the kind of timing issues you might see outside

shows a two-dimensional relationship, initiator

of BlackLine, where people can post more or

to recipient, with the total value of transactions

less randomly.”

between those relationships. Both displays permit real-time drill-down to transaction details.

The proactive nature of the Hub also plays into the finance industry’s move to continuous

ROLE-SWAP CAPABILITY Preparers and

accounting, says Marino.

approvers can swap roles prior to the certification of an intercompany transaction record. The

“We’re not just reducing risk and eliminating

transaction thus becomes a working document

manual errors, but we’re reducing the time

that can pass easily between preparer and

and randomness inherent in manual processes.

approver – a benefit in cases where preparers

That counts for a lot in any business that wants

and approvers are unfamiliar with one another’s

to grow.”

entities in a multi-entity transaction, and would have to go through a rejection process in order to make modifications.

Making Finance Proactive “Outside of BlackLine, today’s intercompany reconciliation is mainly a reactive exercise,” says Talia Marino, BlackLine’s product manager for the Intercompany Hub.

PRODUCT INSIDER

INTERCOMPANY HUB

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING

CLIENT PERSPECTIVE

AT CAESAR’S INTERNATIONAL, A RARE JOB THAT’S CATCHING ON BY CLAUDIA MCDONALD

ALLISON COMBS

aesar’s International is playing a leading role in the gaming-hospitality industry, thanks to its industry-first ability to produce automated, daily revenue uploads

for its US food and beverage division. A key player in the development and implementation of this application is Allison Combs, who heads the company’s non-IT development group. Why non-IT? Because this group is separate from IT, and in many ways occupies a kind of gray space between technology and the accounting group. Neither fish nor fowl, Allison’s group is something new to accounting, brought about by the rise in financial automation, and urgently required because of the different points-of-view that need to be reconciled for projects like Caesar’s to succeed. BLACKLINE MAGAZINE What’s your job title, and what’s the job like? COMBS I’m called a controller, but the job is a little different than most controllers because I head a team of developers. My job is to automate our accounting processes. Where a typical controller would be overseeing specific accounting functions, I’m overseeing the automation of those accounting functions. It’s exciting, and unique in the realm of accounting.

BLACKLINE MAGAZINE Do you develop

a project done, with me going back and forth

for the entire company?

between the accounting group, or its manager or its controller, and our developers. I need

COMBS Not now. We’re still just starting out

to speak all the languages so I can produce

with technology. We’ve automated the food

the best outcome.

and beverage revenue stream. In the future we expect we’ll be working with the hotel

BLACKLINE MAGAZINE What other skills

and then the gaming groups.

are important?

BLACKLINE MAGAZINE How did the

COMBS I think the most important is

group start?

communicating with our users. We need to help people understand how automation

COMBS It started pretty organically. A senior

will change the way they do their jobs.

leadership team identified a few accounting staff that had an interest in programming.

BLACKLINE MAGAZINE That must be huge,

It was a small group of accounting staff,

considering that they’re going from manual

and they started automating simple repetitive

processes to automated ones. How do you do it?

tasks through Excel macros. I joined as a data logistics manager, then became the controller

COMBS It starts with us trying to figure out

a year and a half ago.

exactly who we need to communicate with. That’s not a simple thing, either, because

BLACKLINE MAGAZINE Did you have any

things can get hidden with manual processes.

background in accounting?

Right at the start we need to know what a new technology will encompass, and who the

COMBS Yes, some. My degree is in

people are who will be affected. We don’t

business, and I’ve worked my way up in

want to get three quarters of the way through

accounting knowledge. But at the same time,

a project and then find out there’s a one-off

I’m continuously trying to learn on the IT side

process we didn’t address. That could set

as well – I need to know both accounting and

us back months.

IT. I don’t post journal entries, but I need to understand the function. And technology is

BLACKLINE MAGAZINE How do you do that –

a constant learning curve. But I love it –

make sure you don’t miss anything?

I’m a data nerd at heart. COMBS We reach out to everyone involved in BLACKLINE MAGAZINE It seems that staying

the process. We over-communicate, if anything.

current in both disciplines, accounting and

We hold plenty of meetings, and we invite

technology, is a requirement for a job like

everyone who wants to come. We get everyone

this. How does it help you?

from accountants to directors and executive management. Then, as the project gets closer

COMBS There’s a lot of give-and-take to get

to go-live, we hold daily meetings.

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING

And all the time we’re working as closely as

That’s what we did for our revenue application.

possible with the users themselves, to help

We had to do a complete, parallel audit,

them visualize what the output will be, or get

a manual audit, to check on the BlackLine

them touching the process. Because at the end

process we were doing in the sandbox.

of the day, this is their livelihood. Users need

So we had to do an audit against the audit.

to be comfortable that they’re going to be able to do their work.

Only then did people say, ‘OK, we can see it works.’

BLACKLINE MAGAZINE Are there any unique challenges for people going from working

BLACKLINE MAGAZINE To step back for

manually to working with automation?

a minute, we know that Caesar’s is a major innovator in continuous accounting with your

COMBS Yes, absolutely. People who are used

daily revenue application. How do you see

to manual processes can be hard to convince

continuous accounting evolving at Caesars,

because they can’t see how the changes are

or in the industry in general?

taking place. They’ll say ‘How do you know your validation numbers are right?’ Then when

COMBS At Caesar’s we’re always looking at

you show them, they say ‘How do you know

our processes to see how they can be improved.

the system recorded them right?’ Or ‘How

And we’re evaluating new technologies to see

do you know the numbers you’re validating

how they can help get us there. Like cloud

against are right?’

technology, which helps you scale up and down quickly. And analytics, like BlackLine’s Insights

So to get them comfortable, we’ll do whatever

technology. Once you get all that information

it takes. Literally. Sometimes you have to do a

into a central hub, like BlackLine does, then

one-time manual validation, just to show how,

the sky’s the limit.

when you break the new process down to its simplest level, it does just the same thing that the manual process did.

CLIENT PERSPECTIVE

“Because at the end of the day, this is their livelihood. Users need to be comfortable that they’re going to be able to do their work.” ALLISON COMBS

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING

PA R T N E R P E R S P E C T I V E

GOING PUBLIC? HEED THIS ADVICE FROM CONNOR GROUP BY JIM BUCHANAN

alk about putting your money where your mouth is. When you see how well Santa Clara-based Connor Group has done since

its 2006 start, it’s no surprise that the accounting firm’s specialty is servicing high-growth clients. The company, which is made up of Big Four alumni and industry executives, lists more than 400 clients on five continents, and boasts a 50-percent share of all Silicon Valley IPOs. In managing its own growth as well as its clients’, Connor Group’s believes that success depends on the quality of what it calls “people, processes and systems,” and that this principle is key to publiccompany readiness. Take it from Deepika Sandhu, a partner in the company’s Financial Operations practice. That Connor Group believes in hiring top people is evident in Sandhu, who joined four years ago and was recently named a Woman of Influence by the Silicon Valley Business Journal.

Sandhu acknowledges that hi-growth companies

“Meanwhile, the IPO process can last four to six

are unique not just in the high expectations they

months or more, and require periodic updates to

engender, but also in the challenges they share.

financial results. If you can’t keep up with all the moving parts, the IPO could be delayed.”

“Often, these companies did well by focusing their energy on the front of the house,“ she says.

The way to address these challenges is to take

“They’ve been building products, doing R&D, sales

stock of your company from the people, process

and marketing, things like that. But they haven’t

and systems perspective and see what needs

paid as much attention to the back of the house –

fixing before you begin the journey to becoming

to the accounting and financial systems.”

a public company.

It’s A Shock

Find The People

“For a company looking at an IPO it can be a

“For people, you need to ask if your team has

shock to realize that as a public company you’ve

the skills to be successful as a public company,”

got to do your month-end close in just 10 or 12

Sandhu says.

days,” she says. “What training does your team need or what “That’s what the Street expects. Investors want

new skills need to be added to perform at public

to see timely reporting, and correct reporting.

company standards? For instance, we often see

Creating accurate, reliable and timely financial

skills-gaps in revenue recognitions, SEC reporting

reporting is a big shift for companies that aren’t

and general technical accounting. We preach

used to stringent reporting deadlines.”

hiring the best people you can, and bringing them in sooner rather than later.”

Another challenge for pre-IPO companies is getting ahead of historical and ongoing

Fix The Process

accounting processes. Fixing historical accounting

As for processes, Sandhu notes they should

means going back and resolving open audits

be both workable and scalable, and they should

or other loose ends. Keeping up with day-to-

be evaluated before layering on automation.

day accounting during an IPO process can be a

For example, look into some of the highly

challenge because of the additional demands on

manual, time-consuming processes that exist

the accounting department.

in the accounting department to see if they can be improved.

“Many high-growth companies simply can’t keep up with their day-to-day accounting, for a variety

Also, look for process bottlenecks in places where

of reasons,” Sandhu says. “Transaction volumes

the accounting system interfaces with external

may be growing. You might not have enough

systems. An example is an upstream sales

people. Then you’re taking a highly manual

commissions process that relies on people in sales

process and putting it through an IPO. These

to provide commissions calculations to accounting

things can make it tough.

for appropriate recording.

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING

“If you can’t keep up with all the moving parts, the IPO could be delayed.” DEEPIKA SANDHU

PARTNER PERSPECTIVE

“Something like that can take days to get

says. “By auto-certifying certain accounts and

to accounting, and then the information can

creating rules to match transactions, BlackLine

change a day later, leading to rework during the

lets the accounting team focus on the things

close” she says. “Ask yourself what can be done

that really require their attention.

to create a more timely and accurate process.” “For example, you may not need to look at that

Bring On The Systems

account with zero balance or no movement

Technology such as BlackLine’s can bring

over the prior month. But you might want to

significant value to automating a close.

focus on some of the more complex areas, like

Automation can help speed up processes and

revenue or accounts that are falling out of their

greatly improve accuracy over manual efforts.

normal patterns.”

“I like to refer to what I call the ART of the

Making Confident Decisions

close,“ Sandhu says. “That’s A for accuracy,

Technology can also free up people to contribute

R for reliability, and T for timeliness. That’s what

more to the company’s strategic needs. Sandhu

companies need for their close, and that’s what

points to the growing power of analytics as

BlackLine’s automation supports.”

an example.

BlackLine can help companies make better

“In addition to good people and strong processes,

use of their finance people, too.

systems like BlackLine can help CFOs contribute to the business by producing analysis that gives

“Layering on BlackLine helps the company focus

executives confidence to drive business decisions

its efforts on the most important areas,” she

and influence company behavior.”

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING

CUSTOMER STORY

BRITISH GAS BENEFITS FROM ACCOUNTING AUTOMATION, DASHBOARD VISIBILITY, TIGHTENED CONTROLS BY CLAUDIA MCDONALD

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING

ndustry giant British Gas has been taking care of others for more than 200 years, having grown by supplying energy and other services to nearly 11 million

residential homes with an ultimate customer base of 28 million customers. But in 2014 the company decided to take better care of itself by undertaking a company-wide transformation of financial processes. And a key part of that: bringing in BlackLine. At the time British Gas was working with a third-party outsourcer to reconcile nearly 1,000 accounts each month. Reconciliations and reporting were performed manually, slowing down processes and hampering visibility into finances. The company hoped to improve efficiencies and reduce financial risk by standardizing its accountreconciliation and close processes. For John Dickens, British Gas’ head of finance operations, limitations of the spreadsheet-based accounting processes proved frustrating. “The only way to summarize items under investigation or track failures was to open every rec individually and then re-key the data into another spreadsheet. It was very time-consuming,” he says. In the same way, accounting team members from the outsourcer were frequently bogged down having to check for completeness of reconciliations, an expensive waste of professionals’ time.

Seeing Benefits By 2015 British Gas had brought in BlackLine’s Account Reconciliation, Transaction Matching and Task Management modules. Account Reconciliation increases efficiency and tightens controls by replacing spreadsheets with automation. Transaction Matching improves data quality by automating transaction-matching processes. And Task Management brings automation to the processes for assigning, controlling and monitoring close processes and checklists. It wasn’t long before British Gas began seeing benefits.

CUSTOMER STORY

“The only way to summarize items under investigation or track failures was to open every rec individually. It was very time-consuming.” JOHN DICKENS

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING

“We can now report on items under investigation for the full population with just a few clicks, and without a lengthy manual effort.” JOHN DICKENS

CUSTOMER STORY

Account reconciliations were going faster than ever before, with more than 60 percent of all account recs being processed automatically. Time savings have been significant; British Gas calculated an initial return on investment at more than three and a half full-time equivalents.

Complying With Policy Better yet, the professionals who would have been copying, printing, correcting and emailing spreadsheets are now able to focus on more strategic tasks, like evaluating how well processes comply with company policy. Controls have been tightened, too, thanks to a greater emphasis on data quality. “We used to have a spreadsheet as a template for reconciliations,” says Dickens. “But the only way we could measure the quality of the process was by seeing that certain tasks had been completed. Now we measure quality based on the content itself, because it tells us who the preparer was and it gives us the ability to drill down into the details.” The company also benefits from the BlackLine dashboard. “With the dashboard, we can see the status of all recs, and we can recall history in a few clicks,” he says. “We can now report on items under investigation for the full population with just a few clicks, and without a lengthy manual effort. And we have full visibility on noncompliance with the process, including late recs, missed recs, and rejected recs.”

Coming: Intercompany Hub, BlackLine Insights British Gas plans to add more BlackLine modules in the future. These include the Intercompany Hub, which will help coordinate reconciliations among the company’s numerous business units, and BlackLine Insights, an analytics function that can help British Gas bring continuous improvement to its financial processes.

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING

CUSTOMER STORY

ONLINE LEARNING COMPANY LEARNS HOW TO CUT CLOSE CYCLE BY CLAUDIA MCDONALD

tah-based Pluralsight, an online learning company with more than 4,500 professional technology-training courses and three million

worldwide users, wanted to streamline their financial reconciliation process to accommodate business growth. The company had recently upgraded its ERP system, but it was still taking from 12 to 15 days for the monthly close. “Each staff member was responsible for 10-30 reconciliations,” says Mark Hansen, director of finance and accounting at Pluralsight. “These were all performed in a single Excel workbook. Once the workbook was finished, it was saved to Dropbox and the reviewer was notified.

Waiting For The Workbook “It was a very manual process, and there was no visibility. Any time new journal entries were booked, the reconciliations had to be revisited. Approvers had to wait for a workbook to be finished before they could review it. If there were changes or errors, individuals had to go back and update the entire book of reconciliations.”

“We can instantly see, via the dashboard, how many recs have been reviewed and approved.” MARK HANSON

Hanson notes that the existing process also

“As a preparer completes a reconciliation, the

put any possibility for future internal controls

approver can go into BlackLine and review just

compliance at risk. “The nature of Excel is that

that item, as opposed to waiting for all recs to

data can be changed at any time. We couldn’t lock

be done,” says Hanson.

the folders, so there was always the possibility of something being altered after the accounting

The automated close also supports Pluralsight’s

period had been closed.”

SOX 404 compliance.

Pluralsight chose BlackLine to help tighten the

“With SOX 404, there are strict requirements on

close process and boost data reliability. Among

the preparation and review of reconciliations,”

other things, Pluralsight wanted to be able to see

Hanson says. “BlackLine ensures that we’re not

where the accounting and finance department

only more organized in how we go about the

stood at any time in the close cycle.

reconciliation process, but also more confident about knowing that the files are locked once

“We wanted a solution that allowed us to

they’re closed. No one can change the data.”

document the steps we take to prepare and review reconciliations,” says Hanson. “Also,

Pluralsight now has visibility into the close

there had to be a central repository where all

processes, which benefits everyone from

that information could be housed and not

accountants to investors.

altered once the period closed.” “If you’ve ever worked in an accounting Because BlackLine was cloud-based, it would

department, you know people are always asking

offer Pluralsight the flexibility to grow and scale,

‘Are you done yet?” says Hanson. “With BlackLine,

according to Hanson. Also, BlackLine would let

we’ve removed the need for that question. We can

Pluralsight put robust controls in place. “We saw

instantly see, via the dashboard, how many recs

it as a long-term solution,” he says.

have been reviewed and approved – and how many haven’t been started.

Closing In 10 Days The BlackLine software has helped Pluralsight cut

“Also, our management team and investors need

its monthly close to 10 days from as many as 15

accurate, timely financial information. Because our

days previously. Reviewers no longer have to wait

constituencies receive information faster, they’re

for an entire workbook to be completed before

able to make better decisions based on relevant,

examining reconciliations.

real-time information.”

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING

G I V I N G B AC K

BLACKLINE GIVES BACK TO ATLANTA

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING

ore than 70 volunteers carried, pounded, sawed and bolted their way through two Giving Back projects during November’s

BlackLine User Conference in Atlanta. The volunteers consisted of BlackLine customers, partners and employees who spent the day before the event working with two of Atlanta’s noteworthy community organizations, Habitat For Humanity and Hands On Atlanta. “At the Habitat for Humanity site about 40 volunteers helped build a new house for a local family,” says Diane Romualdez, BlackLine’s director of corporate events. “For Hands On Atlanta, which is a third-party organization, our other group of volunteers helped build a fence for the United Methodist Children’s Home soccer field and park.” Habitat For Humanity is an international non-profit organization dedicated to building and repairing affordable housing. The organization was founded in 1976 in Georgia and has built hundreds of thousands of homes for people in the US, Canada, Latin America, Europe, Asia and the Middle East. The Atlanta affiliate was started in 1983 and today is one of the largest of the organization’s 1,500 US affiliates. Hands On Atlanta is an affiliate of the HandsOn Network. Founded in 1992, the HandsOn Network is an association of 250 volunteer service organizations across 16 countries. Hands On Atlanta, started in 1983, provides volunteer recruiting, project management support and professional development training for more than 70 local non-profit organizations. Giving Back Day is a BlackLine tradition with each year’s user conference. It was started in 2011 with a New Orleans project to partner with Habitat For Humanity in rebuilding homes damaged by Hurricane Katrina.

GIVING BACK

Giving Back volunteers show their nearly-completed project

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING

Good day to build a fence

GIVING BACK

Measure twice? Three times?

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING

I N T H E B L AC K

A LOOK INTO THE BLACKLINE USER CONFERENCE BY KEITH TYNDALL

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING

lackLine’s InTheBlack 2015 Conference was a major success! Just this past November, BlackLine clients, prospects, partners, and

experts descended on Atlanta to bring together all things BlackLine. The conference theme of ‘Now. New. Next.’ delivered excellent content that gave the audience a glimpse of what is happening NOW with BlackLine, what products and services are brand-NEW, and what is NEXT for the future of accounting and finance. I encourage all BlackLine clients and prospects to attend the InTheBlack conference to gain insight into the future. Here are some of my favorite highlights during the conference program.

INTHEBLACK

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING

Driving standardization, improving controls and increasing productivity

INTHEBLACK

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING

INTHEBLACK

HERE’S A LOOK AT BLACKLINE’S USER (GROUP) EXPERIENCE IN ATLANTA

BLACKLINE MAGAZINE

ISSUE TWO: CONTINUOUS ACCOUNTING