BLACKLINE
MAGAZINE
BLACKLINE
MAGAZINE ISSUE 1 - DECEMBER 2015
04
Therese’s introduction
Welcome to the Future of Finance
06
Cover Feature
Now, New, Next: The Future of Finance and Accounting
14
Product Perspective
BlackLine Products: Fulfilling the Promise of Modern Finance
16
CFO Rising
Why CFOs Need to Care about Modern Finance
18
Compliance
COSO Report Card: How Companies Are Measuring Up
20
Giving Back
A Formula for Giving Back – and Getting Back
22
Customer Story Dun & Bradstreet
Doing More with Less at Dun & Bradstreet
26
CFO Q&A
CFO Perspective: Manny Korakis
29
Security
Security Assessing SaaS Security: A Top-Down Approach
32
Customer Story Hyatt
Hyatt Using BlackLine to Track 200 Hotels, 120K–plus Accounts
36
Partner Spotlight
UHY Methodology Uses BlackLine to Bring Process Focus to Clients
38
Gary Simon
What’s in a Cloud? End-toEnd Support for Financial Processes, To Start
40
Tips & Tricks
Play From the Same Sheet and Drilling into ERP
THERESE’S INTRO
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Welcome to the Future of Finance By Therese Tucker
L
ast year in Chicago BlackLine introduced a new vision for the accounting and finance profession. It’s called Modern Finance, and it’s changing business - your business - in ways that might not have seemed possible a few years ago.
This first issue of our new customer
technologies such as cloud computing, Big Data
magazine is dedicated to telling you more
and analytics to bring the benefits of process
about Modern Finance and how it’s working for
improvement and better-informed financial
people at all levels of finance; for accountants,
strategies to all types of organizations.
controllers, auditors, CFOs and others. You’ll hear how two CFOs are approaching
Finally, you’ll learn something about you: specifically, how customers come together with
Modern Finance; how some BlackLine
employees at each year’s User Conference to
customers are deriving the benefits of
volunteer arms, legs and hearts in helping out
transparency and standardization; and how
those less fortunate than ourselves.
companies can work with the new COSO
We hope and anticipate you’ll find
framework in mapping financial controls and
something in here of value to you, your
upgrading test procedures.
organization and your understanding of how
You’ll also learn, in our cover feature, how Modern Finance is making use of newer
Modern Finance can work to make your life better, today and in the future.
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COVER FEATURE
Now. New. Next. The Future of Finance and Accounting By Russ Banham
O
ver the past decade, one business function after another has been transformed by technology. The ways in which sales, marketing and HR are conducted today are vastly different. Finance and accounting was the latecomer to this party, but it is making the loudest noise.
The changes produced by the automation of repetitive, manual finance and accounting processes have set the stage for remarkable developments ahead: more insightful financial forecasts, vastly improved resource allocation, and extraordinary workflow efficiencies. These advances are being called Modern Finance. They are occurring at the same time that the CFO function has metamorphosed to become highly strategic. They are changing the definition of what it means to be a corporate accountant, moving the position closer to that of a financial analyst. Most important, they are giving all-sized companies the tools to more effectively align their financial strategy with their business strategy.
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The changes produced by the automation of repetitive, manual finance and accounting processes have set the stage for remarkable developments ahead…
The future of finance and accounting is linked to
financial data and automating traditional finance and
adoption of these cloud-based technologies. Already,
accounting tasks, organizations make this gold mine of
these tools are providing organizations with enhanced
information searchable. Powerful algorithms make sense
visibility into the vast array of complex transactions at
of internal data sets in relation to each other, and these are
the heart of all businesses. They’ve resulted in faster
added to the immense array of external macroeconomic,
financial closings, greater confidence in the accuracy of
geopolitical and competitive market information on the
financial figures, worry-free financial statements, and far
Internet. The result: CEOs can plot smarter strategies to be
more assured regulatory compliance.
expertly navigated by their CFOs.
This is Modern Finance “now.” What is “new” and
“To do this, companies need access to the variable
“next” is paradigm busting. “There is this amazing
data sets that are stored in provider cloud systems,”
journey underway for finance and accounting executives,
he says. “These emerging capabilities will change the
where they are getting away from the mundane, tactical
role of accountants from validating the accuracy of the
stuff that has absorbed their time and effort forever,
numbers to making sure the CEO is creating the right
and moving toward functional excellence,” says Brian
business decisions.”
Sommer, ERP industry analyst at finance technology
Sommer is far from alone in this view. Chris Iervolino,
research firm TechVentive Inc. “The CFO is at last
a research director at Gartner, cited the improvements in
becoming the strategic business partner that CEOs have
finance and accounting efficiency that have already been
longed for.”
achieved by automating manual processes like account
Assuring this partnership is technology. By digitizing
reconciliation. But he is especially excited about what
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COVER FEATURE
Now. New. Next. The Future of Finance and Accounting
these digital tools offer companies in future. “Cloud-based reconciliation tools have enhanced efficiency and improved visibility into workflows across the business,” he says. “They also have the potential
management and determining where the profits are in the business,” says Nick Castellina, research director at Aberdeen Group. Robert Ployhart, Bank of America professor of
to provide new analytic capabilities; this seems to
business administration at the University of South
be where these automated reconciliation tools are
Carolina, equates the above to “Staring at your feet
headed. This will help the CFO guide and support
while you’re walking, versus looking down the street at
more organization-wide initiatives. As the role of the
where you’re going and what lays ahead.”
accountant evolves, their specialized expertise will be put to more strategic uses.”
Yesterday’s Finance & Accounting This is undoubtedly good news to many accountants
He says “Automating rote manual processes, assuming this is available for a particular business function, is a `no brainer.’ You liberate intellectual assets to apply their expertise to more beneficial purposes. Accountants can’t do that when they’re plugging in
stuck in the trenches performing manual tasks like
numbers. There’s this tremendous opportunity at hand
account reconciliations, transaction matching and
to enable them to become strategic thinkers, in ways
variance analyses. As the pressure intensifies to
that weren’t possible before.”
close the books each month, these tasks become excruciatingly burdensome and anxiety-ridden, given that senior executive leaders are raring to access the
Today’s Finance & Accounting The use of cloud-based software to automate finance
financial data to possibly make adjustments in strategy
and accounting processes has become a competitive
and tactics.
differentiator. Boards, shareholders, analysts and
When uncertainty about the accuracy of a journal
other stakeholders have come to expect more refined
entry arises, accountants must dig through a mountain
forecasts of business performance and more rapid
of spreadsheets to prove the balances are correct.
identification of growth opportunities and related risks.
Without an automated system attending to this chore,
Many businesses have yet to realize these
there’s simply no visibility into the underlying data.
emergent expectations. “There are many dysfunctional
Literally thousands of multi-line-item spreadsheets
companies still stuck on spreadsheets and out-of-
must be analyzed, a Sisyphean effort challenged by the
date technologies,” says Sommer. “This is unfortunate
different ways the spreadsheets were created and used
because functionally excellent companies are where
across the business.
things get really cool. They’ve shifted to (using) cloud
These complex workflows make sorting out a single
accounting and finance workflow management tools,
version of the truth an exercise in frustration and futility.
where manual processes remain for exceptions only.
All the while, accountants are aware that a fast and
This fosters greater collaboration up and down the
error-free closing is critical to the organization’s bottom
value chain - or what I call the `automation everywhere’
line, compliance responsibilities and reputation. As
business organization.”
the minutes tick away to close the books, no time is available to do anything else. This is not Modern Finance. “You’re taking time away
By automating rote tasks, people are freed to apply their skills to more strategic needs like financial analysis. The same automation also sets the stage to undertake
from these human resources when they can be adding
these examinations. “By digitizing the financial data
value, doing things like revenue forecasting, cash flow
and storing it in a centralized repository in the cloud,
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…accountants can apply their expertise to ensure compliance. “It just makes the whole process easier,” Castellina says. “You’re less likely to be audited, and if you are audited it’s less likely to cost you.”
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COVER FEATURE
Since users have unprecedented visibility into the progress of all processes involved in the financial close, the ability to validate the accuracy of the data is vastly enhanced. “No longer will accountants have to deal with inexact numbers, which drives them nuts,” Sommer says.
companies make this information searchable, facilitating real-time calculations,” Castellina says. What might these calculations be? For one thing,
required corrections. Since users have visibility into the progress of all processes involved in the financial close, the ability to
accountants can apply their expertise to ensure
validate the accuracy of the data is vastly enhanced.
compliance. “It just makes the whole process easier,”
“No longer will accountants have to deal with inexact
Castellina says. “You’re less likely to be audited, and if
numbers, which drives them nuts,” Sommer says.
you are audited it’s less likely to cost you.” Iervolino agrees: “Assuming visibility into the
Others in the organization can be offered the same visibility into the financial data to improve the
financial data, companies can expect definite
services they provide the business, Castellina notes.
enhancements from an auditability standpoint.”
“Not only is it easier to share this information across
Easier calculations also facilitate a faster close.
the business, you quickly learn that you can do the
With an automated account reconciliation system,
same tasks with fewer people, resulting in significant
data is imported from the ERP system into this
resource efficiencies.”
system’s online document repository, which stores
Rather than manually crunching numbers, human
and safely archives all supporting documentation.
resources are applied to tasks that are strategic by
Accountants can search through the details of account
nature. These are prized benefits of today’s Modern
balances across all balance sheet accounts, explore
Finance, available to companies right now.
any discrepancies that pop up, and then make the
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Tomorrow’s Finance & Accounting What is coming down the pike - the application of Big Data and analytics to financial data - promises the greatest change in finance and accounting in its history, upending the role of the CFO and his or her staff to navigate the business going forward. The same tools now used to automate manual accounting tasks will be leveraged to create workflow efficiencies and inform strategic financial analyses. “The overarching goal is for businesses to be able to ask questions of their data to plot more assured strategies, manage workflows more efficiently, and allocate resources toward where they will achieve the biggest bang for the buck,” says Sommer.
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COVER FEATURE
Predictive modeling of financial data is close to the point of describing current workflows in relation to task performance.
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Now. New. Next. The Future of Finance and Accounting
Much work in this direction is currently underway.
sports analogy, it’s the difference between being a
“Predictive modeling of financial data is close to the
scorekeeper and a coach. The scorekeeper tallies the
point of describing current workflows in relation to
numbers; the coach is looking strategically five plays
task performance,” says Therese Tucker, founder
ahead on how to win the game.”
and CEO of BlackLine. “The models will help identify
The CFO is this coach. He or she has become
opportunities for improvement in finance and
so vital to their companies’ corporate performance
accounting workflows, which in turn will help staff
management (CPM) that Gartner recently split its
become more productive for strategic purposes.”
tracking of CPM into two areas - strategic CPM and
Since providers of enhanced financial automation tools are repositories of an enormous amount of
finance CPM. “We see a definite trend, from automated tools
financial data across different industry verticals
that increase efficiency and support the process
- imagine how much account reconciliation data
of planning, through more transparent workflows,
these firms have stored - it is expected that such
and toward finance using these tools for predictive
companies will lead the effort to develop these
modeling and improved analytics,” Iervolino says.
predictive models. When they do, finance and accounting will learn where they are ahead of the
It’s tomorrow’s Modern Finance, whipping into shape today.
eight ball or behind it, process-wise. For instance, say that finance and accounting in a manufacturing firm wants to learn whether or not the volume of account reconciliations it rejects is consistent with the experience of other manufacturers. By acquiring information on the average volume of rejections, it can learn if its practices are below the mean. This metric for benchmarking purposes would be available from the financial automation services provider. Even better, the provider can leverage predictive modeling to provide going-forward advice. By understanding the factors causing deficient performance, for example, a company can reengineer its workflows to improve its score. As more clients take these steps, this adds to the provider’s data storehouse, feeding the expanding knowledge of account reconciliation best practices. “The promise of Big Data in finance and accounting is its ability to identify patterns involving time and resources and how better to utilize them,” says Ployhart. “When you’re stuck spending all your time on validating the accuracy of the data, there’s no time left to discern these patterns. To borrow a
Russ Banham is a Pulitzer-nominated business journalist and author of 24 books. He has written for all the major business publications and is an expert on the evolution of the role of the CFO, writing on this subject in hundreds of articles for CFO Magazine.
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BLACKLINE PRODUCTS
BlackLine Products: Fulfilling the Promise of Modern Finance BlackLine’s 2015 Product Announcements Flesh out the Details
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M
odern Finance delivers transformative benefits for financial processes of all types. This year’s announcements demonstrate how Modern Finance can benefit users at all levels of the enterprise:
Process Analytics Automation is the beginning, not the endpoint,
The Intercompany Hub is a centralized repository that helps automate validation,
of Modern Finance process transformation. Today’s
processing, invoice creation, journal generation,
businesses face constant change, and business
posting and settlement of intercompany
processes are required to adapt. Financial processes
transactions. Benefits range from improving end-
are uniquely challenged because they are time-
to-end visibility to reducing process complexity and
sensitive and risk-averse.
financial risk.
BlackLine Insights is a continuous-improvement tool that will grow to give CFOs the ability to fine-tune their financial processes by measuring performance against industry benchmarks. The initial offering includes measurements such as percent-of-reconciliations-automated and reconciliation-rejection-rates-by-role. Near-future updates will expand the number and range of
Making Better Use of Accountants’ Time A goal of Modern Finance is to help accountants spend more of their time on high-value projects and less time on tasks that can be standardized and automated. Three BlackLine product upgrades address the challenge: Automated Journal Entries lets users create pre-
insights; longer term, BlackLine’s analytics tools will
defined logic to automate recurring journal entries in
include prescriptive and predictive functions.
areas such as cash settlements, credit-card and bank
Process improvement is valuable throughout the organization, but it’s especially important with the increasing strategic value of financial processes. As business operations grow more complex, the importance of agile financial processes becomes more acute. That’s why CFOs look to analytics for the means to adjust and adapt financial processes to business goals.
fees, allocations, amortizations, and numerous other entries. Also, a Journal Master feature facilitates building recurring journal entries by automatically inserting role assignments, header information, journal lines and other information for each period. Innovations like these can cut significant effort out of posting journal entries, a major time-sink in most businesses. An integrated-spreadsheets feature for account
A Multi-Company Clearinghouse Global reach is a hallmark of modern business.
reconciliations lets accountants use spreadsheets that are fully integrated into BlackLine’s Account
More organizations than ever before are working
Reconciliations product. This makes it easier for
across multiple business units, lines of business,
accountants used to handling spreadsheets to
continents and currencies. Company accountants are
benefit from BlackLine’s automation and integration
challenged to take into account pricing agreements,
features without having to give up their well-earned
exchange rates and taxes. The result: uncertainties,
knowledge and experience.
delays, and errors in intercompany accounts.
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CFO RISING
Why CFOs Need to Care about Modern Finance By Claudia McDonald
Mark Partin
T
oday’s CFOs are being held to a higher standard than ever before, whether in terms of the technology and other equipment their organizations buy, the people who are hired, or the processes that are put in place to seize competitive advantage on the global stage.
That’s the view of Mark Partin, BlackLine’s CFO. High standards are in Partin’s wheelhouse - he’s a competitive triathlete who looks a decade younger than his 47 years. In many ways, he embodies the Modern Finance CFO of today, a skilled financial person not just looking backwards at historical sales figures and capital expenses, but also looking forward at where the CEO’s strategy is taking the company and what might be in the way. “Finance is the group that is supposed to be the most forward-thinking in an organization, yet many CFOs are still solving problems the old ways,” he says. “To become more strategic in our roles requires more strategic people in our employ and more strategic investments in technology. Otherwise, the CFO will always be the `reluctant accountant.’” Asked what he means by the term, Partin explains that accounting is where many CFOs start their careers, but this is just one function of the role. “You need to do that to ensure the accounting and the financial statements are accurate, but much more is demanded of today’s CFO. Just like other parts of the organization are being held to a higher standard of performance, world-class companies are asking the same of their CFOs. “Modern Finance should be the goal, leveraging technology to automate rote, repetitive accounting processes and improve operational excellence.”
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Better Controls, Greater Accuracy, More Informed Forecasts To ensure more efficient processes, a faster monthly close, more accurate financial statements and a reduced risk of accounting irregularities, CFOs should care about automating account reconciliations, journal entries, and a wide range of external and internal transactions. The faster the monthly close, the sooner business leaders have access to the organization’s financial data to make adjustments in strategy and tactics. The less time left to close the books, the greater the risk of making a mistake. Error-free financial closings are critical to a company’s compliance and fiduciary responsibilities and, by extension, its reputation. When blunders occur in the manual process of validating accounts and transaction balances for compliance purposes, accountants must manually correct them. This heaps more work onto their desks or compels companies to hire more accountants to handle the overload. Small wonder that accountants have been one of the “ten hardest jobs to fill” in industry researcher Manpower Group’s last three annual talent shortage surveys. The time that accountants save from not having to manually attend to rote tasks using spreadsheets can be put to more strategic needs like predictive analytics, providing the CFO with data-driven, forward-looking guidance to navigate the company’s growth initiatives with a better understanding of the related financial and market risks. “Like all CFOs, I need visibility into our operations to gauge the risks to our strategy,” Partin says. “At the same time, I want to be sure my view of operations is accurate. You can’t manage finance and accounting without trust in the numbers.” To do that requires the ability to not just validate the numbers but also verify them, which demands unimpaired visibility into financial and accounting data to detect mistakes and deficiencies before they become a problem.
Cloud Levels the Playing Field In today’s fast-paced business environment, having a world-class technology infrastructure has become a competitive differentiator, particularly for midmarket companies presented with myriad market and geographic growth opportunities. In recent years, one business function after another has seized significant advantages by implementing cloud-based tools for sales, marketing, supply chain, inventory, HR and other purposes. Finance/accounting has been late to this party. For CFOs to achieve the high standards that Partin advocates requires similar investments. “The more complex the organization, the more tools like ours are needed,” he said “For today’s CFO, this is now the price of entry.”
Claudia McDonald is associate editor of BlackLine Magazine
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COMPLIANCE
COSO Report Card: How Companies Are Measuring Up By Jim Buchanan
T
he practice of accounting is orderly, measured, and demands the highest levels of precision and accuracy. The new COSO framework, however, is somewhat the opposite. First announced in 2013 and still under adoption by some, it’s more interpretative than specific, qualitative than quantitative. Bob Hirth
True, the new version gives companies the ability to map internal controls to 17 newly codified principles. But organizations looking for strict, by-the-numbers guidance to fulfilling COSO to the letter won’t find it. Instead, they’re finding that fulfilling the spirit of COSO means relying on their own good judgment; that, along with the help of their auditors. Bob Hirth, current COSO chair and a former senior managing director for Protiviti, notes that COSO 2013 adoption is strong, at nearly 80 percent currently. Still, public companies and auditors face the challenges of satisfying the still-evolving interpretations of the framework. Hirth expects that what he calls “generally accepted COSO documentation” will emerge at some point in the future. But for now, he says, “Questions about completeness of controls really come down to ‘How much is enough?’” These questions apply in a number of areas:
Anticipating SEC Requirements The SEC wants to see a “suitable” framework in place for financial controls, and it considers the new COSO suitable, but it stopped short of mandating any new framework through a rule-making decision. Although the SEC hasn’t set a deadline, Hirth feels that any company that hasn’t transitioned by the end of 2015 should expect tougher questioning on risk assessment and controls from the SEC.
Determining Control Precision Control precision gets to the essence of control quality, and plays into principles such as those supporting the risk assessment category. There’s plenty of gray area in determining what level of precision is enough for any given direct or indirect control. “Say you’ve got a $40 million balance on your financial statement,” says Hirth. “To check that balance for accuracy, a mid-size company might feel it’s sufficient for management to have a meeting
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and review the balance for reasonableness. “But that might not satisfy the auditor, who feels that the $40 million is of material importance because of the size of the company. So you may have to dig deeper to get the auditor’s approval – to validate and test some of the transactions that went into that number.”
people who are involved in financial reporting can understand the risks of fraud and can take preventive measures.”
Leveraging Technology, Auditor Relationships Hirth says that the new framework’s expectations are higher than the old, in part
Evaluating Outsourcers The new framework references outsourcing
because the advent of technology makes it possible for companies to see their financial
in a number of areas, noting specifically that
processes more clearly, and to safeguard them
a public company should maintain as much
more effectively. Various software tools help
responsibility for outsourcer controls as for its
companies map their internal controls to the
own safeguards.
principles and their supporting points-of-focus.
“The reporting convention was you’d be
And process automation helps companies
satisfied with the outsourcing entity’s SOC
standardize financial reporting tasks. Automation
reports,” says Hirth. “Not any more – just getting
can reduce human error and help prevent
SOC reports doesn’t relieve you of responsibility.”
fraudulent review-approver relationships.
It’s now the outsourcing user’s
Hirth notes that companies should fully
responsibility to test the outsourced product
engage with their auditing firms for help in
– say an investment management report – for
implementing and carrying out their COSO
reasonableness. “The SOC reports tells you about
adoption.
the vendor’s controls,” says Hirth, “But it’s up
“The auditors pay close attention to the Public
to your management to test the product you’re
Company Accounting Oversight Board, and
getting and ask questions if necessary.”
the PCAOB will be determining what’s working and what’s not as they gain more experience
Assessing the Risk of Fraud One of the new framework’s 17 principles
overseeing framework adoptions,” he says. “For one thing, the auditor can be a great help
deals specifically with identifying and analyzing
with setting expectations for entity information
any risks of fraud that may exist. The principle
baselines, something that’s important because
and its four points-of-focus are clear, but they
it determines the quality of subsequent controls
don’t include step-by-step instructions. As with
and testing information.
the other COSO elements, it’s up to the company,
“And even though companies may see a slight
although fraud risk assessment is another area
increase in deficiencies from their auditors, that’s
where Hirth expects efforts will eventually
to be expected with any new program. Just think
coalesce around some common solutions.
of it as a bump along the road to getting the
“Fraud risk assessment efforts vary,” he
most out of the new framework.”
says. “For some, it might just mean completing a memorandum concerning management’s thinking. For others, it might mean holding regular meetings throughout the organization so
Jim Buchanan is editor of BlackLine Magazine
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GIVING BACK
A Formula for Giving Back – and Getting Back
D
iane Romualdez is BlackLine’s director of corporate events. At any given moment she’s watching over trade shows, seminars, conferences and other events. She estimates that her group handles about 200 events in a year. And the number keeps growing.
Chief among her responsibilities is arranging for BlackLine’s annual user conference, and an important aspect of each conference is organizing a company tradition called Giving Back Day. The first Giving Back Day took place in 2010, when BlackLine volunteers joined volunteers from BlackLine customers to work with Habitat for Humanity in rebuilding homes damaged by Hurricane Katrina. Romualdez joined the company the following year, and since then her group has organized projects in San Francisco, Los Angeles and Chicago. BlackLine Magazine: It’s great when companies donate resources to the community. How did BlackLine go about choosing to do it in this way? Romualdez: It’s something close to Therese’s heart. She’s a regular benefactor to nonprofits, with a focus mainly on homelessness and families – particularly women and children. She gives back personally quite a bit. I think it’s something she’s wanted to build into the culture at BlackLine. And she was somewhat inspired by the need for help following Katrina. BlackLine Magazine: How do you go about organizing a community project? Romualdez: At the time we open up the conference registration we also create an option for people to join us for Giving Back Day. We typically get 100 to 125 volunteers; most are employees, but usually 20-orso non-employees join us. To make the most of the event I try to arrange for at least two half-day projects – the program started with just Habit for Humanity, but now that we’ve grown we work on two projects for each conference. A project might go from seven in the morning to two or three in the afternoon. And we try to strike a balance to appeal to different people. There might be some heavier work, like framing houses or banging nails, and some lighter work like putting hygiene kits together. Mainly we want to make the day worthwhile – to our volunteers as well as the people we’re helping. BlackLine Magazine: How do you arrange the schedule? Romualdez: During breakfast we kick off with some basic orientation, like background on the organization and what their cause is about. Then we go right into dividing up the teams and they
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BlackLine Charities
Giving Back Videos
WORKING WITH GLIDE IN SAN FRANCISCO
GIVING BACK IN THE WINDY – AND COLD – CITY OF CHICAGO
head for their projects. When it’s possible we like to be able to switch up projects during the day. This way everyone can get the feel for the different parts of what the day entails, and each volunteer can participate as fully as possible. BlackLine Magazine: Is there any problem with you bringing in so many people at once? Romualdez: Not really. We prepare well. We start a conversation with the agency about six months in advance and set a placeholder for the date, so they know what’s coming, and so we have a sense of what our people will be doing. We also make a dollar contribution to cover supplies and other things we’ll need like equipment, paints, and brushes, for example, plus food and transportation. We make a regular donation, too, and at registration we give the attendees the option to donate. BlackLine Magazine: What would a typical project look like – how would it work? Romualdez: In 2012 we were in San Francisco and we worked with a fantastic and well-known organization called Glide. Our clients and employees prepared food and served in the breakfast line. They also made facilities improvements, like painting. We also packed lunches – everyone got a chance to do a little of everything. In 2013, in Los Angeles, we went to the Dream Center and to Los Angeles Mission – Therese is a regular supporter of LA Mission. We split up the groups between those two locations and packed hygiene kits, distributed clothing and interacted with their clients, playing with the kids whenever we could. Interacting with the kids and families and clients is the best part of what we do, and we try to encourage it. BlackLine Magazine: What’s in store for this year? Romualdez: This year we’re working with Habitat for Humanity and Hands on Atlanta. We’re doing a house build with Habitat for Humanity. With Hands on Atlanta we’re doing a project with the United Methodist Children’s Home, which does a lot for the people of Atlanta. It places children into safe and loving foster care homes and also provides housing and support for families at risk of homelessness. We’ll be building picnic tables, painting, landscaping, and helping in the administrative office. BlackLine Magazine: You said that the experience is rewarding for the volunteers. What did you mean? Romualdez: Well, we like to end the day by getting back together and reflecting on what we’ve done and who we’ve met. We realize that we’ve gotten to know some fine people, we’ve gotten to know each other, and maybe we’ve even gotten to know ourselves a little better. Being able to work side by side to help people is a great experience, and it’s not unusual for attendees to tell us that the day was a high point of the conference for them.
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CUSTOMER STORY
Doing More with Less at Dun & Bradstreet By Claudia McDonald
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S
ince 1841, Dun & Bradstreet has been a trusted provider of commercial data to business, addressing such traditional information needs as counter-party risk exposure and credit history, as well as more modern social-identity matching. Today, nearly 90 percent of the Fortune 500 and other of the world’s companies rely on Dun & Bradstreet’s data, insights and analytics to drive business decisions. The company’s reports effectively grease the wheels of commerce.
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CUSTOMER STORY
Like all enterprises, Dun & Bradstreet is focused on growing its own business. In this regard, it found that it was challenged to execute its financial close with the most efficient processes and assured controls. “We wanted to do more with less,” says Gretchen Sikora, Dun & Bradstreet’s senior finance leader. Complicating this ambition was the company’s rapid geographic expansion over the past two years. Finance/accounting team members and processes were all over the world, making each local market’s financial close an independent and separate exercise. “We have over 70 operating entities worldwide, and at any one time we never knew the true status of key financial processes,” she says. “It was a challenge to ensure our controls were consistently improving.” The challenge was significant. The control organization had no way of knowing if account reconciliations were properly completed, documented and reviewed. There also was no mechanism to capture risks and opportunities in a methodical way. As a result, it was not uncommon to worry about possible “surprises” during the financial close process, creating a reactive control organization instead of a proactive one, Sikora says. From a compliance standpoint, there also was no knowledge of how Dun & Bradstreet’s SarbanesOxley-mandated controls were being executed across the business. “Due dates and delivery of quality data were questionable and always a challenge for our controller organization,” she says.
Taking Charge The need for transformation was acute. To kick things off, the control organization in 2012 created a Center of Excellence to support the standardization
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and centralization of key financial and accounting
Sikora and her team nonetheless worked closely
functions worldwide. Everyone in Dun &
with the CoE’s accounting team to train them in the
Bradstreet’s control organization, no matter where
tools’ use. Once they had become experts, they
they were located, would execute the financial close
endeavored to train global colleagues, until the
processes using similar formats and following best
effort “ramped up like a virus,” Sikora says.
practices to ensure a timely close. Strategic objectives were established. The
She remembers several team members commenting on how the tools saved substantial
company wanted to standardize and improve the
time and eliminated much of their non-value-
control environment; improve organizational depth;
added work, especially with auditors. The control
implement best practices; eliminate redundancies;
organization had similar positive comments, with
and create career opportunities.
Dun & Bradstreet’s audit and Sarbanes-Oxley
As part of this ambitious agenda, Sikora was
managers “entirely comfortable” in stating that the
tasked with overseeing transactional accounting on
company now has sufficient controls in place and all
a global basis. Her obligation was to find a way to
supporting documentation.
better track and monitor key functions like account
“As leaders, we now have a tool that globally
reconciliations. To do this, she evaluated different
provides transparencies and insight 24/7 from the
providers of best-in-class finance controls and
preparer standpoint up to the Corporate Controller,”
automation technology. The criteria in choosing the
Sikora says.
provider were whether or not their software tools
The irony in this story is that five years earlier a
would accelerate the financial close, provide process
Sarbanes-Oxley manager had introduced Sikora to
automation, improve the control environment, and
BlackLine, but it was premature at the time for Dun
centralize the preparation, review and monitoring of
& Bradstreet to consider its implementation.
financial data.
In the Bag In BlackLine, Sikora found what she sought. “To
“I will always tell someone, `I wish I would have engaged BlackLine years ago,’” she says. “BlackLine has become the central and most important tool we use in accounting. The automation, improvement in
me it was all in one bag,” she says. “I now had a tool
controls and, most importantly, the peace of mind
to meet our key strategies.”
that BlackLine brings is more than enough to share
Aside from the quality of BlackLine’s products, Sikora was impressed by the sales support she and
(its value) with others.” She adds, “And I can sleep at night now.”
her product review team received during the vetting period. Other factors included the tools’ reporting and monitoring capabilities, ease of use, and the end results of this use. Adoption of the tools was straightforward, she explains, as the company had already created the structure for the Center of Excellence (CoE).
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CFO Q&A
CFO Perspective: Manny Korakis
E
mmanuel “Manny” Korakis had been on the job only four months when he spoke with BlackLine Magazine, his job being CFO of S&P Dow Jones Indices, one of the world’s leading providers of financial market indices and home to the S&P 500 and Dow Jones Industrial Average. For nearly nine years he had been senior VP, corporate controller and chief accounting officer at McGraw Hill Financial, and before that he worked at several public accounting firms, beginning his career at Arthur Andersen. Korakis is only 41, but through the years he’s watched the CFO function morph from a back office number cruncher to the strategy-savvy, forward thinking Modern Finance officer of today.
BlackLine Magazine: How do you think the CFO’s role is changing? Korakis: I worked with a lot of CFOs when I was in public accounting. Their number one responsibility then was crunching the numbers, which is much less important today than making sense of the numbers. The old stuff is pretty low on the list of things that concern me today. I’m focused on the changing landscape of regulation and the globalization of markets, industries, businesses, our competitors and our customers. Keeping pace with all that and the increasing demand for timely and actionable information is what absorbs much of my time. Notice I said information, which is different from data. BlackLine Magazine: Data and information are two different things? Korakis: Yes, and it goes back to what I was saying about the evolution of the CFO’s role. Number
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crunching was a way to get the historical view
Korakis: I’ve come to the point where I no
of what was happening. You looked in the
longer believe there is a single set of metrics
rear-view mirror at your performance to guide
that you can use to determine success broadly.
decisions on the business going forward. Today,
The most important determinant of success is
you take what has happened historically - all
making sure the financial plan is well aligned
this data - and you apply your intellect to this
with the business plan. They have to be in
data and turn it into information. You use your
lockstep. Having metrics around that is relevant,
analytical skills to forecast the future the best
but they have to change year to year. For
you can, and then align your business strategy
instance, you may have a year where you think
accordingly. It’s forward thinking finance.
a certain set of objectives are most important to
BlackLine Magazine: It sounds more exciting
the business, and then something happens that
than the old CFO description, but also more
forces you to change your plans. Locking into
demanding. How do you stay current?
metrics can cause you to be shortsighted and
Korakis: It’s probably one of the hardest parts of my job; you can’t know everything
too focused on the short-term. BlackLine Magazine: That makes
about everything. The trick is to know enough to
tremendous sense, particularly in today’s
know when to react or to reach out to an expert
dynamic business environment. How do you
before you react. It’s important to stay close
determine where to expand the company’s
to customers, to get on the phone and talk to
market and geographic footprint and where to
the larger ones, and get their view of what they
hold off?
see in the market. The same goes with talking
Korakis: In today’s global economy,
to vendors, peers, competitors and colleagues.
companies have only so much bandwidth - you
You need to be a good listener, taking in others’
can’t go to every country and engage every
perspectives. After that, you follow your own
market and expect to get a good return on
instincts.
your investment. So it’s up to me and others to
BlackLine Magazine: So today’s CFO is left
investigate the local customs, culture and tax
brain and right brain, someone with accounting
laws to determine whether we need to replicate
savvy, analytical gifts and conversational skills.
every function in this market or region or serve
What else has changed?
these needs from another region. Are there
Korakis: Back in the day, the CFO would
skill sets available in the market? Should we
prioritize the financial goals once a year. You
maybe engage in a partnership as a better way
can’t do this today. Business is more dynamic
to protect the brand? My point is this is not a
and fluid now, even if the basic principles remain
one-size-fits-all answer, where we simply do
the same. New ideas are constantly being
the same thing with each growth opportunity.
generated to make the business more efficient
You need a business plan, but you also need
or bring in more revenue. You have to be agile
flexibility to dial up or down parts of the plan.
as the CFO to allocate or reallocate investment dollars where they will have the biggest impact. BlackLine Magazine: What are some of the measures you use to ensure finance is going in the right direction?
BlackLine Magazine: What’s your take on process and technology as related to business strategy? Korakis: The ERP system may not be best suited to solve all problems. That’s when cloud
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CFO Q&A
applications make sense, assuming integration with the backbone ERP system, whether it’s on premises or in the cloud. Changing a process is more problematical because of the sheer volume of data that comes through that process. An example is the thousands of individual transactions being reported in different ways using spreadsheets. There’s too much risk of a mistake when you have multiple people touching all these elements. To drive critical business decisions, you need information that is accurate the first go round. The faster you have that information, the more informed and quicker your business and financial decisions. BlackLine Magazine: How do you drive continuous improvements in your finance group? Korakis: You need to establish clear performance metrics measuring where you are going. Understanding what these metrics are is difficult and takes some time. But once you’ve defined them you can drive a culture of accountability. BlackLine Magazine: Is SaaS the future of finance? We ask because the finance function has been late to the party, slow to adopt cloud applications when compared to sales or HR. Korakis: I get asked that question a lot. I think the slowness has to do with people’s fear of letting go of their current systems and the data that goes along with them. For me, the primary concern is, `Does this app have the right functionality to drive the results we are looking for?’ If the app offers this, then I move to the next step of whether or not to have it hosted or run it internally. That decision rests with how much customization of the application I need, which would lead me more towards internal control. Otherwise I am fine with a trusted third party managing the app for me. BlackLine Magazine: Where do you see the current use of business and financial applications headed? Korakis: The world is so connected today; mobile apps make our work more efficient. Last Saturday, I sat on the beach approving expense reports using an app on my smartphone. A few years ago, I’d have to be in my office doing that, which is not where I want to be on a Saturday. I use apps to approve invoices for payment on my phone. When you have apps like these, you have great visibility into the data, which is on hand 24/7. BlackLine Magazine: Meaning you can work and catch a tan at the same time. Korakis: Then, go for a swim.
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Assessing Security
Assessing SaaS Security: A Top-Down Approach By Jim Buchanan
C
onventional wisdom has it that SaaS vendors – that is, those that market cloud-based software-as-a-service – often maintain higher levels of information security than their clients. The reason: security is closer to the SaaS vendor’s business model, and thus its profitability, than it would be for a non-SaaS vendor. Also, early SaaS sales often went to early adopters, who were smaller and less security conscious than their larger competitors.
That formula is changing. Today’s SaaS contracts are going to large and sophisticated customers, and SaaS solutions are increasingly used in business-critical applications. So if you’re shopping for a SaaS offering, such as BlackLine’s, that will function within strategically important process chains, you have every right - indeed, responsibility - to assess your prospective vendor’s security complement with a critical eye. According to Max Solonski, BlackLine’s VP of information security, due diligence should start at a high level, and then work down to the details. First, he says, look for a framework that suits your organization’s security and business needs. That framework will shape the policies, processes and personnel that make up the information security architecture. “If the vendor bases its information security system on the ISO27002 framework, that’s a great start,” he says. “It’s all-encompassing and time-proven. But ISO27002 takes a lot of effort and expense to implement. It’s too much for some SaaS vendors.” Still, the vendor’s framework should be sufficiently comprehensive to address all the organization’s security risks. And the more familiar you are with the ISO27000 series of standards, the better you’ll be able to evaluate the vendor’s information security capabilities. Solonski says you should then look closely into three main areas: qualified personnel, adequate controls, and effective governance.
Starting with People Information security should be governed and operated by a dedicated staff, trained in information security. The info security function should report to a high-level executive, preferably outside of IT. To avoid conflicts of interest with other technical teams around security controls, that executive should report to the CEO, CFO, or to the legal office. Ideally, the info security group’s budget will be separate from the others, and info security will have the commitment of C-level and board executives. Assembling a dedicated staff is just a first step in creating an effective info security personnel
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ASSESSING SECURITY
policy. Next, info security staff should collaborate with other employees to determine
Setting Controls Technical and administrative security controls
who’s best suited to carry out the various
should be placed strategically throughout the
security- related functions.
organization. At a high level, controls exist
“People shouldn’t think of info security as
in administrative policies and governance; in
a bucket where they can toss everything that’s
vendor management, accounting, and so on. At
security-related,“ says Solonski. “In most cases,
a lower level, they’re present in hardware and
security tasks that are related to non-security
software, in everything from network firewalls to
employees’ functions should still be done by
physical plant security.
those employees. Info security people should be
These should all be inspected and tested
used for educating employees and facilitating
regularly, just as one would test backup and
employee interactions with security.”
continuity processes to make sure that the
He points to a company doing application
systems will be effective in an emergency.
development as an example, where software
And the vendor should have well-defined
engineers will collaborate regularly with info
and tested policies and procedures in place for
security engineers to determine the best way to
responding to all incidents, whether security-
incorporate information security into software
related or not. An outage or other incident
design. That collaboration saves time during
can turn out to be security-related. Effective
QA and security testing, and can help shorten
procedures will allow for quick containment to
development cycles.
limit the damage.
Finally, the responsibility for, and
“A network might slow down for no apparent
commitment to, security should extend out to
reason,” says Solonski. “In this case network
all employees in the organization.
engineers will have a procedure for identifying
“At the end of the day, even the best
the cause. But incident response procedures will
safeguards can’t fully protect a company if
also determine if there’s a security component
the employees aren’t careful,” Solonski says.
to the incident. If there is, a security incident-
“Employee security-awareness is a necessary
response process should evaluate the risk and
component to maintaining across-the-board
trigger the remediation.”
info security success, and it’s up to the security
You should also look for policies and controls
people to promote security consciousness
specific to that vendor’s information architecture
through training and other programs.”
and business model. For instance, a vendor
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might be running a legacy application that’s
report - which you should ask for - will describe
been “modernized,” or they might be exposing
how an organization compares against a set of
often-exploited technologies such as PHP or
prescribed controls that a service provider is
WordPress to the Internet. In these cases, you
expected to maintain.
should look for the presence of purpose-specific
Finally, pay close attention to the scope and
compensating controls such as web application
subject of the audits. The audit report should
firewalls or strict connectivity limitations.
cover the SaaS vendor and not just that vendor’s
Let’s Review – and Audit A commitment to regular, ongoing review
sub-provider, because the sub-provider report won’t include a description of the SaaS vendor’s security posture. Also, make sure the report
and feedback is essential to the success of the
covers all the vendor’s facilities and locations -
info security program. The SaaS vendor should
not just the data center that houses
perform regular internal risk assessments and
the application.
reviews of its controls, and should contract with independent auditors for periodic audits of the entire info security infrastructure
Striking the Balance As a SaaS prospect or customer you should
“Customers can expect their vendors to
expect a strong level of communication and
disclose the state of their controls and security
a fair level of transparency from your vendor.
practices” says Solonski. “Typically this is done
Communicating security processes, audit
by the means of third-party audit reports such as
feedback and related information to customers
SOC2 Type 2. Some vendors go beyond that and
is good business, and SaaS vendors know that.
let prospects and customers perform controlled
Transparency into controls, personnel, and other
penetration testing of their applications.
security-related details can be useful, too, in
“But bear in mind that not all certifications and audit reports are the same,” he says. “A major certification like ISO27001-2013 shows that the vendor’s info security functions have passed stringent independent audits.” Other standards-based audits may not be
helping you appreciate the vendor’s commitment to keeping your information and applications secure. But you should realize that at some point the vendor has to go quiet, especially when it comes to proprietary security methods or tools. So
as encompassing. For instance, the SOC1 Type
don’t expect complete disclosure when you’re
2 (also known as SSAE-16) audit validates the
investigating SaaS vendors. After all, the data
list of controls that an organization provides
the vendor is protecting might someday be
to the auditor, while the SOC2 Type 2 audit
your own.
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CUSTOMER STORY
Hyatt Using BlackLine to Track 200 Hotels, 120K–plus Accounts By Claudia McDonald
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F
or Jeanette Nimmo, global process owner/GL for Hyatt Shared Services, BlackLine has helped boost accounting efficiencies in a number of ways. Auditing is an example. “Auditors get direct access to BlackLine. They can pull all the information and all the backup they need. Our group just gets them into BlackLine and then takes them out when they’re done - it’s a huge time savings,” she says.
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But the built-in auditor function was just one of several reasons Hyatt
CUSTOMER STORY
chose BlackLine in 2009 to complement its outsourced accounting model. The main reason: BlackLine would bring integration, automation and visibility to the company’s complex array of accounting processes. Nimmo’s team watches over 200 hotels and about 122,000 accounts and 31,000 reconciliations from offices in Moore, Oklahoma. They were and still are - using an outsourcer, Genpact, for accounting. Outsourcing operations work smoothly, but the hotels were spending lots of time closing books for their monthly handoffs, as well as preparing for their internal and external audits. “We wanted to get more timely visibility into our operations, particularly the hotel reconciliations,” she says. Before, Hyatt had to go through Genpact to see the hotels’ closing status. “Staying ahead of all this was hard because we’d have to rely on reports that could be a half-day behind. So we might end up calling the hotel on an issue that had already been resolved.”
A Variety of Auditors Timeliness was critical for year-end closings because Hyatt’s hotels use a variety of external auditing firms for these. Even the monthly internal closings could be hampered when, in some cases, a hotel might release numbers to the outsourcer before they had been certified by the hotel’s controller. Nimmo’s group can now monitor the hotels’ financial status in real
Hyatt’s 400-plus BlackLine users work with account reconciliations and
time, and can spot a problem, such as a missed reconciliation deadline, before it happens. Meanwhile, the hotels can work with Genpact through BlackLine, which saves on the many emails, messages, and phone calls they used to need. Now the hotel uses BlackLine’s approval workflow to certify the task. Once certified, the account is handed off to Genpact for processing. “We like the fact that BlackLine won’t let the hotel hand off the task until it’s certified,” says Nimmo. “That’s one of the ways that BlackLine
task management
helps reduce complexity and risk.”
modules. Nimmo
to auditing. She estimates that her team saves more than 700 hours
expects to bring up
as important, BlackLine’s approach to Modern Finance is helping
Journal Entry in the
productive work.
near future.
spend more time on real issues than on mundane tasks,” says Nimmo.
BlackLine is also helping to save time, especially when it comes a year by being able to give auditors direct access to BlackLine. Just employees replace the time they spend on mundane tasks with more “Overall, our process improvements and automation are letting us “This is an important benefit for the hotels. BlackLine lets us take the mundane work out of their hands so they can focus on what they need to do for their customers.”
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BlackLine gives Hyatt a number of automated controls over the accounting process. An example is BlackLine’s segregation-of-duty control, which is embedded in the approval workflows across all BlackLine modules. It gives customers the option of mandating that no single person can perform more than one function in the standard approval chain of preparer, reviewer and approver. ISSUE 1 - DECEMBER 2015
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PARTNER SPOTLIGHT
UHY Methodology Uses BlackLine to Bring Process Focus to Clients
T
here’s a reason why Atlanta-based UHY Advisors is one of the leading professional services firms in the field, and why they’ve also reached Platinum Partner status with BlackLine: UHY thinks of financial/accounting solutions in terms of the overall process, and the firm approaches client implementations the same way.
UHY Advisors is an audit, tax, and business consulting company and a member of the UHY International worldwide network. Formed in 2000, UHY Advisors is one of the largest CPA professional services firms in the US. The company became a BlackLine partner in 2006. “The minute we saw BlackLine we knew it was something special,” says Brad Baer, principal for UHY Advisors. “We saw the automation – of account reconciliation and other elements in the recordto-report process. It was like nothing we’d seen before.” Baer also saw that BlackLine would help UHY Advisors take a process-centric approach to client engagements. “Rather than just look at a trouble spot, we like to see the client’s entire process,” he says. “That’s the best way to prescribe a solution that doesn’t just fix the initial problem, but produces long- term improvement.”
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Reviewing Balances UHY’s methodology begins with a balancesheet review, then goes to an examination of accounts to find what data, ERP systems and subsystems drive the accounts. “We’re asking detailed questions, but we’re also looking at the overall process,” says Baer. “Like, what are the business processes, and what specific problems does the client need to solve? “For instance, one company was using an ERP system for the balance sheet. We asked how
seamlessly across all modules. That gives UHY an end-to-end view for using root cause analysis and other process-improvement tools. The unified code base also lets UHY help companies overcome some of the limitations of their ERP and other enterprise systems.
Overcoming Limitations “There are three basic technologies that you see in enterprises,” Baer says. “You’ve got ERP for the main business
they did cash reconciliations, and they said that
functions, CPM for performance management,
they were automated – meaning, by the ERP
and GRC for governance and compliance.
software. Of course, the term ‘automation’ can
BlackLine performs tasks that are essential to
mean different things to different people.
each one. And because of its unified platform, it
“So we asked what happens when things don’t match, and they said they just dump the exceptions into spreadsheets and do them
makes sure that the core financial information in each is accurate and consistent.” Maintaining accuracy and consistency is
manually. Then we asked how many of those
challenging to people working with a variety of
were processed manually, and they told us about
ERP, CPM, and GRC applications because those
5,000 – each month.”
systems typically use different databases. “With BlackLine, you can do account recs
Where BlackLine Fits BlackLine’s process-automation capabilities
and journaling for ERP, financial close reporting for the CPM group, and controls assurance and
are vital to the UHY approach, as is BlackLine’s
transaction matching for the GRC team,” Baer
ease of implementation.
says. “And even though the review workflows
“BlackLine’s core technology is so powerful
are routed from one module to the other, users
that you don’t need custom development,” says
know they’ll all be getting data and reports
Baer. “It’s all in how you configure the system
based on a single set of data.”
out of the box. Want to upload balances? Just use the import templates. “This means we can create, test, and iterate solutions for clients at a speed that’s uncommon in the enterprise software space.” Perhaps most valuable to UHY’s processcentric approach is BlackLine’s core platform, which features a unified code base. Thanks to its unified platform, BlackLine’s workflow, transaction-matching and other functions work
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GARY SIMON
What’s in a Cloud? End-toEnd Support for Financial Processes, To Start Analyst Gary Simon explains why the cloud is uniquely suited to integrating and automating the many steps required in modern-day closings
O
ver the last decade the financial close process - which runs from period close in subsidiaries through to electronic filing to regulators - has been continuously stretched by regulation, broadened information needs, and increasing business complexity. But financial close applications have hardly changed, and this has created large gaps in functional capability and process support, most notably around account reconciliations, task management, transaction matching and even journal entry.
Some of these needs have been met by software vendors on a piecemeal basis, but smart CFOs know that straight-through processing - getting everything right the first time - requires end-to-end process support. Without such support, and as a result of the shortcomings in the process, business analysis and decision-making, which rely on effective financial close management, remain fraught with difficulty for many organizations.
Cloud Platforms Emerge For these organizations, however, there is good news. The advent of the cloud, along with cloudbased financial control and automation platforms, is making it possible to bring together essential accounting components into a single sharable environment. Here, applications are built to a common design standard and they can share cost centers, accounts and other metadata, as well as security, user set up and user interface. The scalability, immediacy and accessibility of cloud platforms such as BlackLine enable all parts of the organization to enjoy access to whatever functionality is needed, regardless of where it may reside. This brings distinct benefits to the financial close, where there is a need for: •
Accounting processes and workflows that can reach out across the organization with high user participation;
•
Management to have complete, on-demand visibility into the process; and
•
Collaboration support among individuals within and between business functions.
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Promoting Collaboration Collaboration among users is essential to helping finance processes evolve from the past - in which close tasks were handled sequentially - to where many key processes can be managed in parallel. This allows the finance function to take care of a significant number of account reconciliations outside of the critical path of the close, rather than in the middle of it, which is a traditional way to handle reconciliations. And it’s not just balance sheet account reconciliations that can be shifted off the critical path. It is also possible to bring forward detailed transaction matching and journal entries, which play essential roles in close tasks for subsidiaries and the corporate center. Cloud-based task management allows the tasks and issues that are intrinsic to the financial close to be maintained in a central and secure environment. These tasks include everything from audit evidence and management commentaries to externally generated documents such as balance confirmations, compliance sign-offs, checklists of close tasks, and regular instructions And embedded workflows allow tasks to be routed among the different users in a process chain. This can be done to obtain a compliance approval, to escalate an issue to a supervisory level, or simply to invoke the next stage of the process. Linked to email and alerting systems, including mobile devices, such workflows give organizations the means to expedite the close process while maintaining appropriate levels of control. Once tasks are accessible in a single shared environment they become visible to authorized users anywhere in the process. Their status can be captured, thanks to the integrated workflow, and they are open to measurement. A rich repository of performance built up over time and embedded in the application helps identify whatever delinquent tasks might hold up the overall financial close, making it easier to take care of them earlier in the process.
A Way Forward With the increasing pace of market, regulatory and technology activities, there’s every reason to expect that the financial close process will continue to become more complex and challenging in the years ahead. That’s why the shift to digital technologies and the emergence of cloud-based financial controls and automation platforms is so important: it provides a step-change in capability and a dependable way forward for process improvement.
Gary Simon is group publisher of FSN Publishing Limited and leader of the Modern Finance Forum on LinkedIn. He is a graduate of London University, a Fellow of the Institute of Chartered Accountants in England and Wales and a Fellow of the British Computer Society. Simon has authored four books, and is a leading authority on finance and technology.
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TIPS & TRICKS
Play from the Same Sheet Problem Whether gathering tables of transactional data or executing formula-heavy reconciliations, accountants love the power and familiarity of spreadsheets. But spreadsheets are often used by different people, and this can lead to multiple versions being emailed back and forth, and that can lead to critical errors…not to mention the time and costs wasted in trying to recover.
Solution BlackLine’s new Integrated Spreadsheet function now lets you open a spreadsheet from within the Account Reconciliation module. Select the Worksheet with Calculated Balance command to display a fully functional spreadsheet that’s integrated with BlackLine’s unified platform, so the changes you make will be automatically reflected in all other related modules. You can build a spreadsheet from scratch, or you can import your existing spreadsheet into BlackLine to get started.
Drilling into ERP Problem You’re trying to reconcile a monthly general ledger account from your SAP ERP system, but the account isn’t reconciling and you can’t figure out why. You suspect that some transactions in transit haven’t been accounted for, so you need to dig into the ERP system. But you’re under a tight deadline. You don’t want to waste the time to open a new browser tab, log in to the ERP system, find the account, adjust for the time period, and hunt for the missing transactions.
Solution With BlackLine’s ERP Drill Down function you just click the ERP system’s hyperlink, which is displayed in your account reconciliation page right next to the GL Balance. The link jumps you straight into the details of the account, for the period you need. If you haven’t yet logged in, you’ll be asked to sign into your ERP system as you normally would – BlackLine doesn’t store these credentials – then you’ll be taken to the general ledger account. Your system administrator typically sets up the link - or links, if you have multiple ERP systems – by going into ERP Drill Down Settings to build a link to each ERP system. Once that’s done, your organization’s preparers, reviewers and approvers can see a link back to the specific account in question any time they reconcile an ERP account.
40 | BLACKLINE MAGAZINE
ISSUE 1 - DECEMBER 2015
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ISSUE 1 - DECEMBER 2015
BLACKLINE MAGAZINE | 41