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2024 Financial Close Buyers Guide Names & Recognizes BlackLine for its Total Cost of Ownership and Return on Investment

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Ventana Research, now ISG Software Research, recently released its 2024 Financial Close Buyers Guide, which ranked BlackLine an Exemplary Vendor and Overall Leader. The report highlighted the total cost of ownership (TCO) and return on investment (ROI) that BlackLine delivers to its customers. 

“As the financial landscape continues to evolve, the need for the Office of the CFO to drive business forward has never been more critical,” said Robert Kugel, executive director and head of business research, ISG Software Research. “Blackline’s proven, collaborative and achievable approach to digital transformation has positioned the company as a trusted partner for organizations worldwide.” 

The guide evaluated 12 vendors in the financial close software market. They are: BlackLine, Board International, FloQast, Fluence, NetSuite, Oracle, Prophix, SAP, Trintech Adra, Trintech Cadency, Vena Solutions and Wolters Kluwer.

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The report uses the Ventana Value Index methodology, which is based on extensive market and product research and is structured to replicate an RFI process by incorporating criteria to select technology. The research evaluates technology providers on products that address critical elements of enterprise software across ten product and customer experience categories. 

Ventana ranked BlackLine as a leader in seven out of the ten categories, including Capability, Usability, TCO/ROI and Validation. The company received an overall grade of A-, and was recognized for:

  • Product Experience for its manageability, administration, privacy and security.
  • Customer experience for its total cost of ownership (TCO) and return on investment (ROI), due to effective systems and processes for managing and escalating breaches. 

Vendors in the Exemplary category represent those that performed the best in meeting the overall product and customer experience requirements. 

Read the full 2024 Financial Close Management Buyers Guide. 

ISG Software Research provides authoritative market research and coverage of the business and IT software industry.

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How Automating Accounting Meets the Growing Demands of Finance

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This is a blog post from our partner BlackLine, explaining four reasons why CFOs are automating their accounting processes.

Going into 2023, Deloitte’s Q4 2022 North American CFO Signals survey revealed that one in three Chief Financial Officers (CFOs) anticipated economic challenges and a possible recession as the major constraint to achieving their companies’ financial performance goals. Despite this gloomy outlook, the survey reported that 79% of CFOs expected to implement more automation/digital technologies into their processes.

Why the Bullishness Towards Investment in Technology?

The answer lies in the growing demands of the finance function. The list of challenges facing businesses seems to grow with every passing quarter, and CFOs and their teams are increasingly expected to act as key partners to business operations. This means spending more time providing the CEO and other leaders with critical insights and decision support and less time on transactional finance. This also means reducing costs and investing in technology to automate core business processes, and accounting is often the best place to start.

4 Reasons Why CFOs Everywhere Are Automating Their Accounting Processes

In no particular order, here are 4 reasons why CFOs everywhere are automating their accounting processes:

In 2022, Gartner surveyed 155 finance executives on their 2025 goals for the financial close. The majority of respondents identified general aims for improvement and over half revealed the goal of an autonomous financial close process:

– 86% said they want a faster, real-time close

– 68% said they want a cheaper close

– 64% said they want an error-free close

– 55% said they want a touch-free close

While a touch-free close is largely just an ambition at the moment, many CFOs have already achieved a faster, real-time close by standardizing their processes and applying automation to repetitive tasks and threshold-dependent use cases.

CFOs that have done so tend to lead top-performing organizations and see significant savings of time and money, so they are spending a lower percentage of their revenue on the finance function and freeing their “teams from low value-added activities so they can be redeployed into value-added business advisory roles.” On average, these organizations spend three times less on their finance function than those that haven’t optimized their processes.

2. Technology is the #2 priority for CEOs

Gartner’s 2023 CEO Survey identified technology and digital transformation as the #2 priority for CEOs, with a special focus on AI and process automation. As expected, growth is the #1 priority for CEOs, but it’s far from being mutually exclusive to investment in digital transformation, as 89% of boards claim we are “in a post-digital world; i.e., digital is an implicit part of growth strategies.”

A recent study by Harvard Business Review highlights the importance of technology and digital transformation to current business growth, comparing average annual shareholder returns of digital “leaders” to those of digital “laggards” across the global banking industry. From 2018 to 2022, digital leaders in global banking saw 8.1% in average annual shareholder returns versus 4.9% for laggards. Additionally, total operating expenses of digital laggards grew at 2.3% per year, nearly twice that of digital leaders (1.3% per year).

3. Recruiting and retaining top talent

The CFO’s investment in technology also contributes to the #3 priority for CEOs – recruiting and retaining top talent. The Journal of Accountancy recently cited a survey of 267 CFOs across the U.S., EMEA, and APAC, revealing that 99% of CFOs who are prioritizing digital transformation agree that technology will be crucial to their ability to attract and retain employees.

Another survey by the Association of International Certified Professional Accountants showed that finance and accounting roles have virtually no interest in information activities, like data aggregation and transactional ticking and tying, and would rather shift their focus to delivering insight, influence, and impact to their organizations. This sort of sea change in the role of accounting and finance is only possible through the automation of repetitive core processes.

The current shortage of accountants entering the workforce even further stresses the importance of investment in technology. In December 2022, The Wall Street Journal reported that over “300,000 U.S. accountants and auditors have left their jobs in the past two years, a 17% decline,” and that the declining number of accounting bachelor’s graduates won’t be able to fill the vacancies.

Some of this decline across the profession can be attributed to retirements. However, a recent survey of 1,400 college students on their perceptions of the accounting profession revealed that when compared to other careers, most undergraduates view accounting careers as requiring longer hours per week and having less interesting day-to-day responsibilities. These perceptions are largely due to accounting’s traditional association with repetitive, time-consuming processes, many of which can now be automated and digitally optimized.

4. Our volatile economic environment

The past three years have produced the most volatile economic environment since The Great Recession. The sharp economic contraction caused by the COVID-19 pandemic was quickly followed by supply chain disruptions, inflation, rising interest rates, geoeconomic confrontations, energy crises, extreme weather events, failing banks, and labor shortages, which have been especially pertinent to finance and accounting teams.

These challenges have stressed the demand for real-time insights into financials to enable proactive, data-driven decisions that will eliminate risk and maximize profitability. Gartner’s 2023 Survey of Top 5 Priorities for Corporate Controllers revealed that a top priority for the controllership is to reevaluate its own scope and structure, so that its value is aligned to support judgment-based and decision-enablement workstreams for the larger CFO organization.

It goes without saying that traditional accounting practices are incompatible with this demand for accurate, real-time insights. Although a lot has changed over the past several years, a 2019 survey of 1,100 C-level executives and finance leaders across the U.S., EMEA, and APAC found that 69% of respondents believed that their CEO/CFO had used incorrect or out-of-date financial data to make significant business decisions. Manual input processes and too many disconnected data sources were identified as the leading reasons for error.

How Are CFOs Navigating These Demands?

As organizations must embrace even greater influxes of data across different systems, our business environment becomes even more complex, and finance and accounting face a shortage of talent, the controllership’s ability to eliminate risk, consolidate financial data, and enable decision-support for the office of the CFO can only be made possible through the digital transformation of core financial processes. For a first-hand account of how making a change is helping other finance leaders navigate those demands, tune in to this webinar: Controllers Council – The Future of Accounting: Insights from Industry Leaders.

This blog post was originally published on the BlackLine blog.

Read more about Accounting & Accounts Receivable:

How CFOs Stay Ahead of Rapidly Changing Markets

Industry Analysts’ Take on F&A Priorities

The Importance of Taking an F&A-First Approach

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Industry Analysts’ Take on F&A Priorities

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This is a blog post from our partner BlackLine, highlighting the top three F&A priorities according to analysts at The Hackett Group and ISG Ventana Research.

As automation technology continues to permeate the business accounting landscape, finance and accounting (F&A) leaders are increasingly tasked with navigating complex challenges and driving strategic initiatives.

BlackLine hosted a panel with leading analysts to discuss the current F&A landscape. Here are the most significant developments for accounting professionals to watch.

AI: Bridging the Gap Between Perception & Reality

Artificial Intelligence (AI) has captured the imagination of finance leaders, promising transformative capabilities. However, a disparity exists between the perceptions of CFOs and the expectations of corporate boards. 

While CFOs are optimistic about the potential of AI in F&A, boards often seek tangible results and ROI. It’s crucial to distinguish between realistic AI applications and fantasy to harness its true potential in finance operations.

Here’s a picture, painted by a leading analyst with the Hackett Group, of how CFOs are facing increasing pressure from board members regarding the usage of AI. “CFOs have told us that, at least initially, their intention was they didn’t see a need to go into AI, but the boards are asking them questions. What is AI? Have we assessed it? What is that going to do for us operationally? What’s it going to do for the top line? What’s it going to do for cost?”

While board members inherently tend to look at the bigger picture regarding AI implementation, such as cost, there are also very specific demands increasingly being placed upon F&A teams that AI can help accomplish.

“They, in essence, are telling CFOs very clearly that what I need from the finance organization are things like the ability to forecast predictive analytics, driving value, and what if modeling for various scenarios.”

One of the key considerations is talent. As AI reshapes the F&A landscape, investing in talent development and cultivating a workforce equipped with both financial acumen and technological prowess is essential. This blend of skills is integral for leveraging AI tools effectively and driving innovation in finance functions.

Talent & Career Development: Embracing Change

In the era of predictive AI and process automation, talent development takes center stage in F&A organizations. As accounting transforms into a tech-driven domain, there’s a growing emphasis on making accounting careers appealing and engaging.

Analysts highlighted the importance of continuous learning and career advancement opportunities to retain top talent. A noteworthy quote from an analyst underscores the evolving expectations of finance professionals: “If I don’t get a skills-enhancing opportunity every six months, I’m leaving.”

This sentiment emphasizes the need for organizations to prioritize career development and provide avenues for skills enhancement.

For more insights on talent management in the digital age, check out our guide on unlocking the power of talent management.

Value Delivery: Moving Beyond Efficiency

Efficiency is a critical metric for F&A operations, but true value delivery goes beyond mere productivity gains. Analysts advocate for a shift from efficiency to productivity—a mindset that questions the necessity of tasks and seeks to eliminate them altogether through technology and process improvements.

An executive director of ISG Ventana Research made an interesting observation when contrasting productivity with efficiency. “It’s one thing to talk about being more efficient, and I think a lot of senior finance people in the old school, they just think in terms of efficiency, which is if it’s taking seven minutes to do this, we should be getting it down to five minutes.

Productivity asks the question: why are we doing this in the first place? So, it’s a way of using technology to get rid of having to do tasks in the first place. And that is both from automating things, which we’re familiar with, but there’s also the notion that if you fix a problem upstream in a process, nobody has to fix it on the downstream.”

Four Strategies for Addressing F&A Priorities

To effectively address the top priorities outlined by leading analysts, F&A departments can implement strategic initiatives aimed at building resilience, fostering innovation, and driving value creation. Here are some actionable strategies.

Create a Culture of Continuous Learning

Investing in talent development is essential for building a high-performing F&A team. By fostering a culture of continuous learning, organizations can empower employees to acquire new skills, stay updated on emerging trends, and adapt to evolving technologies. Additionally, identifying and developing technology evangelists within the F&A team can facilitate the adoption of innovative tools and processes, driving efficiency and productivity gains.

Leverage Technology for Operational Excellence

Harnessing the power of technology is crucial for enabling real-time, touchless, and efficient finance operations. By leveraging automation and digital solutions, F&A teams can streamline processes, strengthen internal controls, and drive continuous improvement.

Implementing a real-time/touchless/one-day close approach can significantly reduce the time and effort required for financial reporting, enabling F&A professionals to focus on value-added activities such as strategic analysis and decision-making.

Build a Robust Data Foundation

Data is the lifeblood of modern finance operations and building a robust data foundation is paramount for success. By consolidating and centralizing financial data, organizations can provide F&A teams with access to accurate, up-to-date information for forecasting, predictive analytics, and decision support. This data-driven approach empowers F&A professionals to make informed decisions and drive business performance.

Understand AI & Its Implications

AI holds immense potential for transforming F&A operations, but it’s essential to fully understand the technology and its implications. Organizations should differentiate between generative AI (genAI) and specific AI applications and identify use cases that align with their strategic objectives. 

Moreover, it’s crucial not to view AI as purely a productivity tool but as a catalyst for innovation and value creation. People remain a critical piece of the AI puzzle, and investing in talent development is key to maximizing the benefits of AI in F&A.

This blog post was originally published on the BlackLine blog.

Read more about Accounting & Accounts Receivable:

The Importance of Taking an F&A-First Approach

Automation in Accounting and Accounts Receivable Solve Workload and Staffing Shortages

Modern Accounting: Four Steps to Streamlining Journal Entry Processes

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Driving Effective Change Management in Digital Finance Transformation

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In today’s fast-paced business landscape, finance and accounting functions are undergoing significant digital transformation. Organizations are embracing new technologies to streamline processes and improve efficiency. In this setting, it is crucial to recognize the importance of effective change management in driving successful digital finance transformation initiatives.

Importance of Change Management in Digital Finance Transformation

Change management plays a pivotal role in ensuring that digital finance transformation initiatives are not only implemented but also embraced and integrated into the organization’s culture and operations.

Digital finance transformation initiatives often involve significant shifts in processes, technologies, and organizational culture. Without proper change management, organizations risk facing numerous challenges, including resistance to new technologies, lack of adoption, and ultimately, failure to realize the full benefits of digital transformation.

Change management is essential in digital finance transformation for several reasons:

1. Alignment with Business Objectives:

Change management ensures that digital finance initiatives are aligned with broader business objectives and strategies. By clearly communicating the purpose and benefits of transformation, organizations can gain buy in from stakeholders and ensure that everyone is working towards common goals.

2. Employee Engagement and Adoption:

Effective change management engages employees at all levels of the organization, from finance executives to frontline staff. By involving employees in the change process, organizations can foster a culture of ownership, empowerment, and innovation, leading to higher levels of adoption and success.

3. Mitigation of Risks and Challenges:

Change management helps organizations identify and mitigate potential risks and challenges associated with digital transformation. By proactively addressing issues such as resistance to change, lack of skills, and organizational silos, organizations can minimize disruptions and ensure a smoother transition to digital finance processes.

Strategies for Effective Change Management

To drive effective change management in digital finance transformation, organizations can adopt the following strategies:

1. Build a Strong Change Management Team:

Establish a dedicated change management team comprising finance leaders, project managers, and change agents. This team should be responsible for defining the change strategy, communicating the vision, and supporting employees throughout the transformation journey.

2. Communicate and Engage:

Communication is key to successful change management. Organizations should develop a comprehensive communication plan to keep employees informed about the transformation process, its objectives, and the impact on their roles and responsibilities. Engage employees through regular updates, town hall meetings, and feedback sessions to ensure transparency and alignment.

3. Empower Champions:

Identify and empower champions within the organization who are passionate about digital finance transformation. These individuals can serve as advocates for change, inspire their peers, and drive adoption of new technologies and processes.

4. Provide Training and Support:

Invest in training and development programs to equip employees with the skills and knowledge needed to succeed in the digital finance landscape. Offer hands- on training, online courses, and access to resources to ensure that employees feel confident and capable in utilizing new technologies.

5. Measure and Iterate:

Continuously measure the success of digital finance transformation initiatives through key performance indicators (KPIs) and metrics. Use feedback from employees and stakeholders to identify areas for improvement and iterate on strategies to drive continuous improvement.

Effective change management is essential for driving successful digital finance transformation initiatives. By aligning with business objectives, engaging employees, mitigating risks, and implementing strategies for communication and empowerment, organizations can navigate the complexities of change and realize the full potential of digital finance technologies. Embracing change as a continuous journey, organizations can position themselves for long-term success in today’s digital economy.

Download Digital Finance Transformation: Your Guide to Driving Effective, Continuous & Collaborative Change Management in Finance & Accounting to learn more.

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2024 Predictions for Finance & Accounting

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This guest post from our partner, BlackLine, offers key predictions for finance and accounting in 2024.

As we look into the future, it’s hard to ignore that the finance and accounting landscape is evolving at an unprecedented pace due to technological advancements. Let’s explore three pivotal predictions shaping the finance and accounting industry in 2024, offering insights into the changing dynamics and how F&A professionals can navigate this digital age.

1. The Rise of AI in Finance & Accounting

Artificial Intelligence (AI) is making significant strides into the finance and accounting sector, transforming how professionals approach their work.

One notable aspect is the expanded use of ChatGPT – a generative AI model – which is anticipated to play a more impactful role. Its scalability and agility can potentially enhance productivity by automating routine tasks, such as research, process execution, audits, and reporting.

However, the implementation of such cutting-edge technology requires a cautious approach, with professionals urged to weigh the benefits against the associated risks. Even the greatest of technologies have risks, and ChatGPT is no exception. Inaccuracies, fabricated information, and security risks all need to be considered.

In a survey carried out by Censuswide and BlackLine, 34% of finance and accounting executives acknowledged that the primary hurdles to their organization’s adoption of such technologies would revolve around confidence and trust in the information they produce.

Beyond ChatGPT, machine learning is emerging as another critical facet of AI. Companies are increasingly integrating machine learning into their processes to streamline operations and solve complex problems. An illustrative example is how BlackLine’s intercompany solutions incorporate predictive guidance machine learning capabilities to learn past behaviors and prevent intercompany transaction failures before they occur, minimizing time and resources spent across the entire transaction lifecycle.

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2. Global Minimum Tax Regulations & Organizational Data Needs

In the realm of multinational organizations, the spotlight is on Global Minimum Tax (GMT) regulations. These regulations aim to standardize global taxes, eliminating loopholes and ensuring a level playing field across countries. The consequence is a heightened demand for organizational data as compliance requirements intensify. To navigate this shift, companies must proactively address the increased workload and leverage appropriate technology to meet regulatory expectations.

Countries worldwide, including major players like India, China, and Russia, are active participants in the GMT framework. While certain details are still being refined, staying abreast of individual country progress remains crucial. Resources such as the OECD’s website can serve as valuable references to track developments in this global tax landscape.

3. The Digital Revolution: Central Bank Digital Currency (CBDC)

Central Bank Digital Currency (CBDC) is emerging as a transformative force in the financial world. With over 130 countries exploring or implementing CBDCs, the financial landscape is undergoing a paradigm shift. This digital currency, issued by central banks, has implications for transactions – both wholesale and retail.

While wholesale CBDC is focused on financial institutions, retail is available to the general public. With the initial focus on wholesale, banks and other financial institutions must be prepared as their industries are impacted. As CBDCs move beyond wholesale transactions, their impact on everyday retail transactions becomes a crucial aspect to watch.

Understanding the implications of CBDCs is imperative, given the potential benefits, such as faster payments and increased transparency, juxtaposed with challenges like cybersecurity threats and privacy concerns. Staying informed about CBDC developments in specific countries is advised as the technology progresses.

F&A Should Embrace Innovative Technologies

As we navigate the digital age in finance and accounting, staying informed and embracing innovative technologies is paramount. Whether leveraging AI like ChatGPT, incorporating machine learning for efficiency, or adapting to global tax changes and digital currencies, professionals need to be proactive and embrace technology solutions to help their businesses thrive. Solutions like those offered by BlackLine provide tangible examples of how technology can streamline processes, reduce risks, and enhance productivity in this ever-evolving digital landscape.

This blog post was originally published on the BlackLine blog.

Read more about Accounting & Accounts Receivable:

Leveraging Technology to Help Accounts Receivables Teams

CFOs are Investing in Automated Accounting

Trends in Financial Management for Midsize Organizations

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Unlocking the Potential of Accounts Receivable in 2024

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In the ever-evolving landscape of finance, Accounts Receivable (AR) is undergoing a transformative journey, emerging as a strategic player in the financial ecosystem. A recent survey conducted by Treasury Webinars on behalf of BlackLine details the current state of AR and provides valuable insights into the challenges and opportunities that lie ahead.

The Rising Strategic Role of Accounts Receivable

The global pandemic, changing supply-chain dynamics, and geopolitical uncertainties have propelled AR into a more strategic role. According to the survey, 77% of AR teams now capture the attention of CFOs, with 16% serving as key advisors on strategic business matters. Over the past 12-24 months, 75% of respondents reported a significant shift towards a more strategic role, suggesting a continued rise in the strategic importance of AR into 2024.

Expectations for Accounts Receivable in 2024

As expectations for AR teams continue to climb, the survey indicates that 71% of companies plan to increase the responsibilities of AR teams in 2024. Days Sales Outstanding (DSO), a key metric for AR success, is expected to increase for 55% of respondents. Inflationary environments, customer-specific dynamics, and supply-chain issues are identified as the main drivers of expected DSO changes in 2024.

Navigating Relationship Dynamics in Accounts Receivable

The survey digs into the intricacies of AR dynamics, exposing the existence of silos within AR teams. While 27% of companies acknowledge the presence of silos, 32% perceive them as a non-issue. The study identifies cash application as common in AR silos, emphasizing the need for collaboration and breaking down barriers to foster efficient communication.

Impact of Technology on AR Performance

Technology plays a pivotal role in shaping the performance of AR teams. While 70% of companies report a positive impact of technology on AR performance, the choice of technology tools varies. Business intelligence tools and spreadsheets emerge as the primary tools for measuring and managing AR performance. Notably, companies leveraging AR automation tools witness the most significant impact on performance, highlighting the potential of automation in enhancing efficiency.

Investments in People and Technology

Companies are aware of the evolving landscape and expressed a commitment to invest in both human capital and technology to empower AR teams. They consider skills such as data analytics, data management, and proficiency in emerging technologies as crucial for AR team members. In 2024, 62% of companies plan to upgrade AR-related technology, showcasing a dedication to continuous improvement.

Empowering Accounts Receivable Professionals

Despite the challenges, it is an exciting time for AR professionals. The strategic role of AR is increasing, and companies are planning to invest in resources for AR teams. 38% of companies are planning to add staff and 46% are increasing professional development opportunities. Companies are focused on upgrading both technical and soft skills. AR professionals are well-positioned for success.

The survey includes actionable recommendations for businesses hoping to optimize their AR functions. These include a thorough examination of existing processes, addressing silos, and investing in technology that promotes collaboration and decision-making.

The survey not only highlights the current state of AR but also provides valuable insights for businesses to strategically position themselves in the evolving financial landscape. By embracing technology, fostering collaboration, and investing in the skills of their AR teams, businesses can unlock the full potential of AR and drive bottom-line success.

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Trends in Financial Management for Midsize Organizations

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This guest post from our partner, BlackLine, was written by IDC. It outlines challenges facing finance and accounting in midsize organizations.

Midsize organizations have several challenges that make financial operations management particularly difficult. Many such organizations operate in a very lean manner and yet are still focused on growth.  While the complexity of financial management applies equally to midsize organizations, they do not enjoy the resource availability of their larger counterparts. Thus, midsize organizations must address challenges associated with rapid growth and regulatory compliance with their limited resources.  

In this blog post, we aim to discern the evolving landscape of midsize companies by analyzing significant trends, their related challenges, and opportunities for these organizations to succeed in an ever-evolving landscape.

The following are key trends affecting finance and accounting teams at midsize organizations:

  • Talent management is becoming a financial priority. Over the past 12 months, core finance and accounting teams (accounts payable, accounts receivable, budgeting planning, auditing etc.) have quit at an alarming rate. In a recent survey conducted by IDC, staffing and labor shortages preventing effective use of technology were among the top 3 greatest concerns for midsize businesses. (Source: Future Enterprise Resiliency & Spending Survey – Wave 6, IDC, July 2023). This attrition is largely due to the combination of high pressure, heavy time commitment and legacy tools – all of which plague midsize businesses. Financial operations teams are built upon core accounting staff as a foundation; high turnover in this area can impact productivity and even the company’s bottom line.
  • Greater emphasis on dissemination of business-critical information. The rapid pace of growth within midsize businesses puts a spotlight on the communication of business information. Smaller businesses are often hampered by their inability to quickly gather business-critical information and disseminate it to their necessary stakeholders. In a recent IDC survey, communicating business and financial metrics to stakeholders effectively was cited as among the top 3 pain points by CFOs. (Source: C-Suite Survey, IDC, August 2022). As rapidly growing businesses rocket toward financial exit strategies, the ability to share real-time information with banks, investors, key suppliers is an essential element of success.
  • Demand for a more strategic/analytical skill set for finance teams. According to IDC research, 44% of CFOs said they envision more involvement with IT decisions involving finance, ERP, analytics, and so forth. (Source: CIO Advisory Board: Exploring the CIO-CFO Relationship, August 2023). The necessary skill set among financial team members will evolve to include more strategy/analytical skills. The ability to look at financial data and see the opportunities and strategic insights within the data will become an essential part of the job. Going forward, IDC believes smaller business will lead the way and combine positions like CFO and the CIO to support the business in the emerging digital first economy. 

Many of the opportunities for midmarket businesses to modernize financial operations relate to the need for speed and agility. The top reasons driving digital transformation initiatives include the following needs:

  • Improvements in productivity and process automation to decrease cost per transaction. For midsize businesses, 26% listed working late to catch up on accounting processes as their top frustration with their current system. (SaaSPath Survey 2023, IDC, March 2023).
  • Faster finance and performance insights to manage uncertainty and guide risk appetite
  • Managing the evolving regulatory compliance landscape with the lens of integrated risk and finance. More than 28% of midsize businesses spend their time on regulatory compliance working manually or in spreadsheets. (SaaSPath Survey 2023, IDC, March 2023).
  • Faster financial close period to reduce time spent on analyzing the past and instead focus on future value-added strategies. For midsize businesses financial close was one of their top 3 most manual processes (SaaSPath Survey 2023, IDC, March 2023).

Midsize businesses are very focused on technology that allows them to do more with less. Lean finance and accounting teams must be flexible and nimble. Team members have to wear multiple hats to conduct their core responsibilities. When considering change, midsize organizations must move quickly; they have neither the time nor the resources for longer optimization projects.

Driving Toward Agility & Scale in the Office of the CFO

The role of finance and accounting has evolved beyond simply monitoring debits and credits. This trend is happening the fastest in those midsize businesses where there are fewer managerial layers. These businesses tend to have greater overlap in roles and duties (e.g., the CFO also serves as the head of compliance and operations). Today’s midsize finance office and the people who manage it are being asked to do more than ever before:

  • F&A is evolving into an operational data hub. In addition to added strategic duties, F&A is becoming the key hub for many aspects of business data beyond financial including operational data, IT system data, supply chain data, ESG data, and so forth.
  • F&A is evolving into an insights hub. F&A is expected to leverage the financial systems and the latest technology to identify risks and challenges and use this information to create accurate forecasts. In addition, F&A teams are now under even greater pressure to create more detailed forecasts much more frequently.
  • F&A as an engine for growth. Today’s F&A team is expected to uncover strategies to drive revenue growth through efficient planning, accurate forecasting, and tight collaboration with other management staff.

Persistent Pain Points for the Midsize CFO

There are several places where midsize businesses still struggle today.

Lost time on mundane tasks. In the March 2023 IDC SaasPath Survey, midsize respondents (companies with between 500-1000 employees) listed “too much of the time spent on accounting duties is low-value, data-entry heavy” as their top frustration with their current accounting system. For midsize businesses, the biggest time sinks (i.e., areas where they spent the most time) were reporting/analytics, accounts receivable and the financial close according to the most recent SaaSPath Survey 2023 (IDC, March 2023). A reliance on spreadsheets figured prominently for these tasks. In addition, resource misappropriation is common due to the relative lack of resources.

Lack of accurate information. Midsize companies listed their second highest frustration with their current accounting system as “the financial reporting has a high error rate.”  Finance leaders at these companies need timely and accurate information to optimize decision making. Less than accurate data results in rework (additional validation and substantiation) that ultimately slows down the financial close process and erodes the confidence in the final output. With many midsize organizations unable to substantiate the full balance sheet, high priority accounts may require triage leading to late or inaccurate financials, or both.

Benefits of Financial Modernization

The expected benefits of financial modernization include the following:

  • The ability to harness the latest technology to scale up data management capabilities. Businesses will be able to agnostically integrate their core systems, optimize accounting processes with automation technology, and capture market expansion opportunities with budgeting and planning technology.
  • The ability to leverage the latest technology to provide flexibility, minimize costs and ensure strategic insight into an organization’s business
  • The delivery and maintenance of systems related to finance, performance, risk and compliance capabilities/functions in a cost-effective manner
  • Flexibility to meet business needs and support evolving business and regulatory requirements
  • Data at multiple levels of detail from source systems transactions to posting GL balances and financial consolidation results
  • Progressive future state transformation, leveraging existing components to co-exist in the current environment

Considerations for Midsize F&A Leaders When Evaluating Financial Technology

Think holistically. Over the past 2-3 years, IDC has seen a growing trend among financial software vendors to bring more holistic applications to the market. Recent M&A activity reflects this trend as well.

Put end users at the center. Financial applications are evolving rapidly as vendors invest research and development dollars into bolstering, augmenting, and in some cases, redesigning their applications. The applications must align with the new digital enterprise and how finance and accounting professionals adopt technology.

Look for SaaS applications that are built and maintained with trust. It is vital for enterprise application vendors to build trust in the SaaS economy including being more transparent, delivering on commitments, engaging end users, supporting customer success throughout the relationship, and helping customers achieve their business outcomes.

Advanced Technologies in Finance & Accounting

As finance and accounting departments move into the digital-first economy with a focus on agility and scalability initiatives, the finance function itself is turning to advanced technologies to enable its evolution. Fueled by inefficiency within the finance workstreams, the CFO requires more advanced and innovative technology.

Given that financial management for midsize organizations is an exercise in data management, many businesses are looking to advanced technology to cope with the data burden at scale and at speed. The technologies include:

  • Integration. Developers and managers require integrations to quickly add/modify data that flows into and out of software applications. This enables midsize businesses to quickly move data between systems and be more flexible as business needs change over time.
  • Cloud-native architecture. This architecture provides organizations with the necessary flexibility/agility to meet the demands of a highly dynamic market landscape. According to IDC, 80.7% of finance leaders reported they would be willing to pay more for cloud-native architecture featuring microservices and containers.
  • Automated workflows. Financial software vendors are embedding intelligence within the “record-to-report” (R2R) workflows to unleash the full power of automation.
  • Artificial intelligence (AI). AI is finding a foothold in nearly all aspects of financial operations from the record to report process to procure to pay and beyond. AI offers midsize organizations the ability to compensate for a lack of resources through the use of virtual assistants and intelligent automation.
  • Advanced analytics. Many organizations are flooded with business data from a variety of sources and a variety of data types. As a result, midmarket companies are turning to advanced analytics to glean insights from their data.

This blog post was originally published on the BlackLine blog.

Read more about Accounting & Accounts Receivable:

Fixing Intercompany

How Artificial Intelligence Can Reduce Transaction Failure Rates in Intercompany

Building a Successful Finance Transformation Team: Key Stakeholders and Change Champions

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Fixing Intercompany

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This guest post from our partner, BlackLine, explains how to get started fixing intercompany.

The signs are there. Quarter after quarter, your organization’s transactions aren’t balancing. Your close is taking too long, and write-offs and tax leakage are happening too often. In short, your intercompany operations are a mess.

As issues spring to the surface and create havoc, it’s easy to get pulled in different directions trying to fix each one. But it’s best not to get caught up in a Whac-A-Mole game of jumping from one issue to the next. Instead, step back and look at your intercompany operations holistically. Then, commit to improving them so all finance and accounting functions work efficiently.

That said, the idea of transforming intercompany is incredibly daunting. How does an organization even begin to develop a strategy to ensure that everyone is following best practices? Are the problems tied up in governance and policies, in processes, or both? Do new technologies need to be adopted to automate transactions? 

To start: conduct a root-cause analysis of your intercompany finance and accounting processes. Once you do, you can pinpoint where things are breaking down and find solutions for making sustainable improvements that benefit the entire intercompany ecosystem.

Addressing All 3 Intercompany Processes

Intercompany is a network of functions and entities in which an organization is essentially trading with itself. To ensure that it conducts business fairly, it must operate according to an “arm’s length” model. Just as its different entities are segmented, a root-cause analysis must be broken down into distinct, manageable processes and address three key intercompany processes:

  1. 1. Balancing
  2. 2. Settling
  3. 3. Initiating transactions

When the Left Pocket Doesn’t Equal the Right Pocket

Many intercompany financial close delays are rooted in the fact that organizations are balancing transactions using manual processes that make it virtually impossible to identify and resolve errors, discrepancies in volume and price, currency translation, and timing differences.

Other negative impacts of transaction mismatching include:

  • Working with inaccurate customer data
  • Increased write-offs
  • Diminished ability for teams to focus on business goals

Analyzing balances to see where breakdowns occur requires a granular assessment of every trade. Examine how the seller recorded a transaction and compare that to how the buyer recorded it. Do the two match? If not, why not? Is the discrepancy an anomaly or a chronic failure that repeats throughout the system?

Ultimately, intercompany operations should work from a complete, virtual subledger of global intercompany transactions that streamline and manage reconciliation complexity and free up staff capacity and close periods quicker. This positively impacts transaction amounts, recorded taxes, and exception management.

Where Things Fall Apart Downstream

Errors accumulate when organizations fail to deliver settlement-ready balances to treasury teams and where reconciliations take too long to manage, thus delaying netting and settlement efforts. This increases FX impact and the volume of aging write-offs that can further reduce working capital and liquidity.

Other negative impacts of delayed netting and settlement include:

  • Impeded cash management
  • Adverse credit ratings and increased borrowing costs
  • Delayed mergers and acquisitions funding and lost M&A opportunities

Where intercompany balances are being settled, what do those settlements look like? Are they occurring as cash settlements where funds are being moved on the books of different entities? Where is short-term and long-term debt being created? When do equity infusions come into play? Is there good visibility into how transactions are being settled? Do you have creative control over foreign currencies, using the clearing or non-clearing of intercompany as a natural hedge against foreign currency movements?

An optimized netting and settlement function empowers the collaboration between Treasury, Accounting, Finance, and Tax with real-time visibility on the status of intercompany transactions. ERPs, banking, and treasury are integrated to facilitate and streamline netting, settlement, and clearing processes.

Where Bad Data First “Infects” the System

Very often, issues arise from the moment a transaction is begun. A common problem is that transactions and invoices are initiated in an opaque way to users. When stakeholders and accounting teams don’t have visibility and operate in silos, there’s an increased chance of errors entering the system.

Other negative impacts of initiating inaccurate transactions include:

  • Inaccurate transfer pricing mark-ups
  • Reduced tax defensibility
  • Increased preventable losses due to foreign currency fluctuation

Which transactions are taking too long? Are manual processes slowing things down? Are humans doing the heavy lifting where technology could automate processes and save teams time so they can focus on more meaningful tasks?

During this process, teams should have complete visibility when initiating, approving, and booking transactions and invoices, while enforcing correctly applied intercompany trading relationships, business logic, transfer pricing markups, and tax determinations. Intercompany service activities should follow preconfigured billing routes, automate journal entries, and produce tax-compliant invoices using automated processes.

Starting on a Path Toward Intercompany Excellence

Once an organization completes a root-cause analysis, it’s perfectly positioned to develop a strategy to optimize intercompany operations, improve governance, policies, and processes, and implement intercompany financial management best practices.

This blog post was originally published on the BlackLine blog.

Read more about Accounting & Accounts Receivable:

How Artificial Intelligence Can Reduce Transaction Failure Rates in Intercompany

Building a Successful Finance Transformation Team: Key Stakeholders and Change Champions

From Credit Managers to Strategic Partners: The Rise of Revenue Cycle Managers

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Building a Successful Finance Transformation Team: Key Stakeholders and Change Champions

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This guest post from our partner BlackLine, which provides guidance on digital finance transformation journeys.

Embracing automation has become a strategic imperative for organizations seeking operational efficiency and improved reliability for their finance and accounting (F&A) processes. However, digital finance transformation journeys come with challenges that can fundamentally shape the ultimate outcome.

A successful implementation doesn’t just mean being smart with technology. It’s about managing change throughout your organization, ensuring everyone on the team is on board and making the most of software that tackles the real, everyday pain points for F&A.

You need all the pieces to fit, and to do this companies must take a considered and strategic approach.

Clear Objectives & Goals

Anchoring your automation initiative with clear, measurable objectives will be paramount to its success. Objectives that are too vague, challenging, or difficult to measure will hinder your project before it even begins.

Clear objectives and goals, on the other hand, will help you steer the ship, and right it when things go wrong. You should think of your objectives as your island. If your project scope starts to creep or become too complex, it can feel like you’re struggling to keep your head above water. When this happens, your objectives are where you want to return. You should be able to come back to them throughout the project, to make sure that what you are doing is aligned with and in support of these initial goals. This will help you to circumvent scope drift and focus on tackling the challenges that matter most to your business and its people.

Additionally, during this first step, you should already be thinking about the success story you want to tell at the end of the project. Think about the objectives you’ve set – do you know how you will show that you’ve met these? What benefits will these help to deliver, for people and the organization? If you can’t answer these questions, you may need to revisit your objectives to make them clearer and more specific.

Establish Metrics That Align with Automation Goals

This brings us to metrics and measurement. Whatever your goals for implementing new technology, demonstrating a good ROI, and building a business case for any future improvements, your definition of success must be etched in metrics. This is an area that sometimes (mistakenly) gets left to the end of a project. However, I would encourage you to view this as something that goes hand-in-hand with objective setting.

If you don’t think about measurement until the end, you’ll only measure what you can – not what would have been best for showcasing success. Establishing the right metrics at the beginning of the project gives you the opportunity to look at these at every stage, adjust your approach accordingly, and continue on your transformation journey.

Key Stakeholder Engagement

Planning is a priority at the beginning of any project – but change is a team effort. Get the right people involved and do it right away.

Rather than viewing your automation initiative solely through a technology or organizational lens, think about transformation as a people-centric process. Who will be impacted by this project and at what stage? Who needs to be informed? Who is a decision maker? Who can help you shape this? Who, ultimately, will its success depend on?

Involving key stakeholders from the beginning is important for setting expectations and avoiding challenges further down the line. If you introduce a stakeholder group too late, you might end up with objectives that move or change over time, or with technology that is not widely accepted by those who need to use it. Those brought into the project in the early stages are considerably less likely to challenge things down the line. Particularly if they have played a part in setting objectives or goals.

Depending on the size of your organization, the number of people who need to be informed and involved will vary. But there are three groups you should not forget:

A senior leader: someone who will help champion the project for you.

Your IT department: This team is crucial for any digital F&A initiative. The worst thing you can do is spring a project on them at the end of the line once a solution has been purchased, with an outcome and delivery date that does not work for their time and resources.

End users: Never forget the people who will be using the software you’re introducing and remember that people can sometimes feel threatened by change. Communicating how this will benefit them and hearing their concerns are both fundamental to managing change.

Change Champions

Every team needs its heroes. As part of your ongoing stakeholder engagement, try to identify and support “change champions” within your company.

Your most engaged and passionate colleagues often make the best champions. They’re the ones who know the current processes and pain points and see the benefits of what you’re trying to do. They may see that the next step in their own career is getting confident using the latest technology. These people can help you communicate how responsibilities and procedures are changing and why. They can help others adapt to the changes and make the integration process smoother.

Testing Before Showtime, Not After

Before your transformation project goes live, remember: test, test, and test again. Do not wait for issues to reveal themselves after launch. Instead, ensure rigorous testing has been carried out well in advance of the go-live date.  

This is a crucial part of the process to ensure that the technology performs as expected and that any potential roadblocks are dealt with proactively and head on. What’s more, it will build confidence in the system’s readiness and sets the stage for communicating success back to the business.

User Acceptance Testing (UAT) – testing of the technology with real-life users and scenarios – is invaluable at this stage. It will identify any unforeseen issues before the official launch, giving the team a chance to address them.

Balancing Perfection & Progress

While it’s critical to test and make sure you’re set up for a successful launch, it’s also important to understand that there is room to refine and improve things at a later stage.

A common mistake during an integration project is to expect perfection right away and become stuck in a holding pattern when it doesn’t materialize. If 95% of your project and processes are working as expected, that may be enough. Prioritizing measurable and impactful progress over a ‘perfect scenario’ will help you to reap benefits sooner. In turn, these benefits will likely help you to make a case for any additional investment that might be needed to achieve that last 5%.

Often, it’s better to take a step-by-step approach to transformation, gradually scaling and bringing people on the journey with you. Trying to do everything at once only heightens the risk of overpromising and underdelivering. 

Sharing the Success

Once everything is up and running, it’s time to share the good news. If earlier steps were followed, accurate metrics in line with initial objectives will demonstrate the automation’s positive impact. What’s more, you should have a range of stakeholders and change champions who are ready and willing to talk about the benefits they’ve seen along the way.

Ultimately, a successful automation journey opens exciting possibilities for F&A teams. While the technicalities are important, the real key to success is understanding that people are at the heart of it all. Ensuring successful implementation of technology and ushering in positive change requires F&A leaders to bring together employees, processes, and technology. By following these steps, you should be set up for success and in a position to demonstrate ROI for the next steps in your transformation journey.

This blog post was originally published on the BlackLine blog.

Read more about Accounting & Accounts Receivable:

From Credit Managers to Strategic Partners: The Rise of Revenue Cycle Managers

Redefining Accounting: Embracing Technology to Transform the Profession

The Future of Accounting: Breaking Free from Manual Tasks with Technology

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