How to close with confidence and deliver dependable numbers — every time
Note: The following was written by Molly Boyle, senior manager of solutions marketing for BlackLine, a provider of cloud-based solutions that transform finance and accounting by automating, centralizing and streamlining financial close operations, intercompany accounting processes and other key finance and accounting processes for large and midsize organizations. Blackline is a strategic partner of the MACPA.
Accounting and finance departments have a vital responsibility to produce accurate and complete financial statements. The business depends on these results for effective decision-making, compliance, forecasting, and strategic planning.
Trust begins with a reliable output, but if those numbers are produced by manual processes — well, it’s no wonder accountants are feeling the pressure.
The close process is weighed down by manual, repetitive tasks (think mile-long checklists and complex formulas) that absorb accountants’ valuable time and introduce risk. Weaknesses and inefficiencies in the balance sheet substantiation process often lead to misstatements and control deficiencies, which can result in costly penalties and fines, stock price deterioration, damaged public image, litigation and even bankruptcy.
Accuracy and integrity are the ultimate goals, but the intensely manual nature of this process puts those goals in jeopardy.
Here are three factors that introduce risk and kill confidence during the financial close.
Error-prone account recs An account reconciliation is only as good as its ending balance. If the process of agreeing a reconciliation to the general ledger is a manual one, it is inherently error-prone.
What happens when someone records a late entry or a job runs later than expected, pushing transactions through to the ledger but not your spreadsheet? If there is nothing in place to alert you to these adjustments, you’ll always be stuck with that looming feeling of: should I triple check one more time? Did I get everything? Are the numbers accurate?
Legacy documents We’re all familiar with that feeling of overwhelm that comes from opening a file with 30 tabs: “Every reserve model since 2013 can be in there. Where do I begin?? How do I know what I need to be looking at, and how on earth am I supposed to find it?”
A lot of accounting processes start with a roll forward, and when you’re locked into this habit, it can result in unnecessarily large and confusing files.
The reality is that your attention is only needed on a small portion of that spreadsheet, but when a document takes on a life of its own, it can quickly consume valuable time — wearing you out before you even begin.
Formula errors If a formula in one of those 30 tabs is off by a column or row, you now have an error that is difficult to identify and correct. In massive spreadsheets, a small error could result in a significant oversight or misstatement. And when accountants are responsible for numerous files, it becomes unrealistic to assume that every formula can be thoroughly checked each month.
Drag something incorrectly, copy and paste it in the wrong spot, add an extra row, hit backspace one too many times, and an entire workbook is compromised. This is why teams who are accounting manually live with the fear that something slipped through the cracks.
A unified solution with immediate benefits Here’s the good news: there is relief. There is a better way that will automate the repetitive manual work so you can deliver accurate, complete financial results and spend more of your time on value-adding activities.
Process automation is designed to automate any manual, repeatable process. A cloud-based finance controls and automation platform adds efficiency and visibility to the entire financial close, acting as a centralized hub for general ledger data, sub-ledger data, and other relevant financial data from various sources and applications.
This solution connects the data and delivers timely, intelligent notifications of balance changes, laying the foundation for balance sheet integrity. Cloud-based software is typically easy to set up and offers a quick time-to-value.
Did you just breathe a sigh of relief? You’re not alone, and the best is yet to come. Leading organizations are experiencing these immediate benefits that increase over time as additional enhancements are realized.
Efficiency and automation Business rules can be applied to data and transactions allowing for system-certification of certain accounts when predetermined criteria is met. Reconciliation templates pre-populate key fields, roll-forward relevant items, and even amortize prepaids automatically.
These solutions save considerable effort, reduce risk, and allow highly skilled accountants to focus on more judgmental or high-risk areas.
Control and compliance Technology provides a reliable compliance framework for financial close activities, including journal entries, balance sheet account reconciliations, variance analysis, and transaction level reviews. These are designed around controls, which ensure that key processes are secure, standardized, repeatable, and wherever possible, automated.
A unified solution dramatically reduces the risk of misstatement and minimizes potential control failures. It also provides a clear audit trail and ensures segregation of duties is maintained.
The most significant impact is combatting the rising cost of compliance, with savings at all levels of the process.
Visibility and transparency When it comes to financial close processes, visibility is imperative. Paper, binders, storage rooms, shared drives, and spreadsheets strewn across many locations create confusion and lack transparency.
Process automation solutions transform the close into a transparent, manageable process. Information is quickly and easily disseminated through powerful dashboards and customizable reports.
These solutions are designed to track KPIs, document progress, and highlight risk, including those risks driven by required adjustments, delinquencies, and incomplete processes. Managers can quickly identify potential issues and address them before they affect the business. Best of all, Controllers can finally sleep soundly through the night.
It’s time to boost your confidence A finance controls and automation platform is the most effective way to reduce human error, increase standardization, improve visibility, ensure stronger controls, and streamline internal and external audits.
You and your teams can save a significant amount of time while ensuring a more accurate financial close and experiencing the benefits of powerful analysis and reporting. Without compromising quality, accountants can close the books faster than ever before, leaving time for critical analysis and business partnership.
The right platform equips organizations to start making truly real-time—not behind-the-times—business and strategy decisions. And this is how accounting and finance can finally earn a seat at the table.
Read this brief to learn more about how you can close with confidence and be done with doubt.