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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

Home » BlackLine

How Artificial Intelligence Can Reduce Transaction Failure Rates in Intercompany

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This guest post from our partner, BlackLine, explains how artificial intelligence can be a game-changer for intercompany.

Intercompany has always been complicated. In an atmosphere of changing tax regulations and supply chain and labor issues, non-trade activities have their own special set of challenges. Combine these complexities with the fact that many intercompany transactions are performed manually, and it becomes clear that enterprises are in dire need of transforming their intercompany operations.

Performing intercompany tasks using conventional methods, such as working with manual spreadsheets and processing data using ERPs with limited automation capabilities, leads to exceedingly high transaction failure rates. These failures result in billing, reconciliation, and settlement delays while adding time, inefficiency, and frustration to an organization’s intercompany operations. And, since staff spends so much time matching and resolving problematic transactions, many organizations struggle to maintain capacity levels.

These challenges have led enterprises to examine solutions for intercompany enabled by artificial intelligence (AI), or at least what promise they hold. Fortunately, AI is no longer a headline-grabbing, seemingly futuristic phenomenon.

An Intercompany Game Changer

What is it about AI technology that has the potential to change the game for intercompany? In a way, it’s the ability to predict a reliable future. That is, AI-enabled solutions promise to guide organizations on how to set up and optimize transactions throughout their journey and avoid issues downstream.

This might seem Minority Report-esque (the 2002 Tom Cruise film in which law enforcement is able to predict crimes before they happen), but this technology can bring unprecedented visibility to intercompany functions, allowing teams to leverage insights and perform operations correctly and efficiently and avoid frustrating delays and disputes that would otherwise crop up in a conventional intercompany ecosystem.

An AI-enabled intercompany solution should:

  • Incorporate predictive analytics. The solution should be designed to learn from customer behavior data. After analyzing transactional and operational process data, it can predict where issues may arise and pose risks to close processes—before transactions are booked.
  • Provide accurate, immediate feedback. The solution should provide organizations with immediate feedback for any transaction set, highlighting high-risk transactions, explaining the risk factors, and offering guidance on what corrections should be made to facilitate precise, efficient, error-free processing.
  • Centralize and standardize transactions. The solution should tackle intercompany problems by treating them as extensive accounting data sets housed within an intercompany “subledger,” each of which possesses unique lifecycle characteristics associated with a given corporation.

BlackLine’s Intercompany Predictive Guidance

BlackLine has now developed the first AI-enabled, predictive processing capabilities as part of our intercompany financial management solutions.

Applied AI is at the heart of BlackLine’s Intercompany Predictive Guidance technology, empowering it to become familiar with each customer’s accounting behaviors at a granular level. By leveraging this technology, companies can dramatically reduce or even eliminate transaction failures, achieving significant time and cost savings on a global scale.

When the AI application analyzes an organization’s transactional data, it predicts where issues are likely to arise and pose a risk to financial close processes—before the transactions are booked. Specifically, it can:

  • Highlight high-risk areas
  • Explain risk factors
  • Show accounting teams where immediate corrections are possible
  • Provide guidance for future transactions

 While most automation and streamlined workflow capabilities should reduce failure rates, by using BlackLine’s AI-enabled technology, companies can dramatically reduce, or in some cases eliminate, their transaction failures, achieving significant time and cost savings.

Broader positive impacts of Predictive Guidance include helping enterprises better plan mergers and acquisitions and improve capacity development, as team members spend less time resolving transactional issues and more time making meaningful, strategic decisions.

Newly Realized Opportunities for Intercompany Success

BlackLine’s Intercompany Predictive Guidance changes the intercompany game by preventing potential issues before they happen, dramatically improving business outcomes. Fortified with this groundbreaking technology, today’s enterprises no longer need to be content with just learning about the potential of AI. They can begin to benefit from AI capabilities in their intercompany business practices.

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

Home » BlackLine

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

Home » BlackLine

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

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This guest post from our partner BlackLine discusses the emerging role of accounts receivable (AR) revenue cycle managers.

The role of credit managers is changing… dramatically. As organizations more aggressively seek to improve operational efficiencies, lower costs, and maintain growth, credit managers are being called upon to view their roles in a whole new way.

To be clear, this shift won’t only impact AR processes. The financial operations of the entire business enterprise depend on it.

Historically, it has been common for credit managers to be focused solely on isolated issues, such as late payments and non-payments, DSO, and lagging indicators. But what if they instead adopted a holistic view and examined how AR fits into the business enterprise? What if they were to embrace the idea that AR can actually play an instrumental role in impacting other outcomes—even enterprise profitability?

With this enlightened, expansive view comes a new title for credit managers: Revenue Cycle Manager (RCM). RCMs are responsible for overseeing billing accounts and helping departments resolve their revenue cycle problems, so the role goes beyond simply being a process watchdog. Instead, the RCM is a strategic partner to leadership and various corporate functions.

Accurately Assessing Customer Behaviors

At the heart of this transformation is credit managers’ untapped superpower, one they’ve actually possessed for a very long time: visibility into customer behaviors and the insights they leverage to manage debt and risk appetite, as well as collections and cash flow.

AR teams typically have extensive access to customer data that can paint a stunningly accurate picture of customers’ credit patterns and behaviors, including sales. This offers them the ability to share insights and showcase the essential, multifaceted nature of AR with other functions.

This visibility has remarkable value, because such insights can benefit the enterprise in big, strategic ways, enabling functions to get away from operating in siloed fashion and instead work together to make better decisions that improve processes and the enterprise’s ability to grow.

There are three important steps toward expanding the perspective of an AR manager to that of an RCM.

Identify Functional Disconnects

The RCM must be able to identify operational breakdowns and disconnects between functions. For instance, where are finance teams not working together and sharing information that could make both more successful? If one team is managing risk but not impacting collections, and vice versa, that’s a disconnect.

These disconnects can also creep into leadership circles where conflicting KPIs and targets can be a challenge. For example, perhaps the CFO is pushing to collect more cash and reduce bad debt at all costs, but the CEO is looking to grow the business. They’re unlikely to achieve growth without adding an element of risk that newer customers may not be strong payers, and so both targets require an element of give and take if they are to be successful.

That’s one challenge. But, if both of those KPIs are being set by individuals who are also working with inaccurate, or limited, data relating to customer behaviors, risk appetite and collections processes within the business, then those leaders, too, are working in silos which will serve only to exacerbate contradictory or competing KPIs.

While the wider organization doesn’t always perceive AR teams as customer-facing, interacting with customers and tracking customer behaviors is actually a big part of what they do. As such, their insights can positively impact customer-facing functions, such as sales and marketing. To be successful and operate efficiently, sales and marketing need to target customers that are most likely to convert. That could take the form of purchasing a product, increasing recurring purchases, or buying additional product lines. It’s a waste of time for them to be fostering customers who aren’t “keepers” or, worse, indicate they will be risky payers.

Making savvy decisions about building the desired customer base is dependent on how aligned a credit and finance approach is with an organization’s sales strategy and revenue targets. AR intelligence can help sales verify good customer profiles. Knowing that risk is lessened, those teams can focus on doing business with those customers and extend to them bigger lines of credit.

Adopt New Technological Solutions

RCMs can’t do their jobs and achieve operational excellence if teams are relying on manual processes. This results in delayed, poor-quality data and performance. 

The most accurate way of determining risk is by analyzing which customers are paying on time, and this can only be learned through analytics and intelligence. That’s why it’s essential for businesses to adopt solutions that automate processes, streamline and unify data, and give teams access to real-time intelligence so they can make quick, informed decisions — all of which drives improved performance, not only for AR and finance, but across the business.

Once an automated solution is in place, the RCM can quickly assess customer behaviors, identify payment patterns, direct business strategy, and help company functions utilize data, talk intelligently with each other, and improve processes.

Communicate the Importance of the RCM Role

Many people don’t like change, especially if it means adjusting the way they’ve been operating for a long time. So, while this evolution might require some feather smoothing, it can be done.

High-level stakeholders and customers aren’t impressed by nips and tucks to processes. What they care about is compelling results. To get started on this journey, RCMs need to communicate to those inside and outside AR the importance of being able to access customer data quickly and leverage automation solutions that ensure that all data that enters the system is both timely and accurate.

Making the case for these sorts of holistic changes has the best chance of improving the health and viability of the enterprise and bringing about positive business outcomes. 

The RCM’s Time Is Now

As enterprises realize the gains of improving AR processes, they’ll be in a stronger place to manage the many challenges that impact profitability. But this evolution can only begin when finance leaders embrace the emergence of the role of the Revenue Cycle Manager and the impact that AR decision-making has on key functions across the enterprise, including sales and strategies to improve customer relationships and expand the customer base.

This blog post was originally published on the BlackLine blog.

Read more about Accounting & Accounts Receivable:

Unplugging with Confidence: How Accountants Can Enjoy Vacations Stress-Free

The Power of AR Automation in Transforming Finance Operations

Maximizing Cash Flow: How Technology Optimizes Accounts Receivable Operations

Home » BlackLine

Redefining Accounting: Embracing Technology to Transform the Profession

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This guest post from our partner BlackLine, highlighting the challenges the accounting profession is facing.

Since the onset of the pandemic, the list of challenges faced by business leaders has only gotten longer with each passing quarter: geo-economic confrontations, rising interest rates, supply chain disruptions, rising cyber-crime, energy crises, failing banks, extreme weather events…and unfortunately, there is more bad news to share. Accounting—the backbone of business operations—is in decline.

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 diminishing 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, several studies point to a much larger problem.

Accounting’s Dependence & Decline

A recent survey of over 1,400 college students (accounting and non-accounting majors alike) on their perceptions of the accounting profession revealed three predominantly negative perceptions of accounting:

1) Accounting careers require longer hours per week than other careers.

2) Day-to-day responsibilities are less interesting than other business careers.

3) Accounting degrees are more difficult to earn than other business majors.

Another survey conducted with the University of Georgia’s Consumer Analytics Program revealed even more alarming data: of the 204 professional accountants surveyed, 99% reported experiencing some level of burnout and 24% of those reported experiencing medium-high to high levels of burnout.

This burnout is predominantly associated with the financial close:

  • 81% of participants reported having at least one month in the past year where the financial close disrupted their personal lives
  • 85% of participants reported having to re-open the books to fix errors at least once a year
  • 49% reported having to re-open the books to fix errors 3-4 months a year

This prevalence of errors within the financial close and subsequent burnout originates in the lack of controls, repetitive work, long hours, and weak data governance that is inherent to dependence on Excel-based accounting processes. Consequently, burnout across the profession only results in more time spent in these processes for the accountants that do remain.

Despite the well-known drawbacks of this dependence, Excel has remained the go-to for period-end accounting and finance processes since its entry into the software market in 1995. This reign as accounting and finance’s primary tool is a success by all accounts. However, the mutual relationship between the recent decline of the accounting profession and the consequences of reliance on manual processes demands a change. This demand for change is stressed even further when we consider the circumstances of our macro-environment and the challenges they pose to the priorities of business leaders.

Conflict with Leadership Priorities

In its Leadership Vision for 2023, Gartner research presents the leading 2023 priorities of Corporate Controllers and their leadership. To no surprise, the CEO’s number one priority is growth, followed by workforce management, and then technological transformation. For the Corporate Controller, the number one priority is to digitize and streamline the financial close process, followed by improving accounting staff engagement and retention, and then reevaluating the controllership’s scope and structure. Does accounting’s dependence on manual, Excel-based processes contribute to either set of priorities? The short answer is no.

With respect to the CEO’s priorities, spreadsheet-based processes:

1) Inherently conflict with technological transformation.

2) Are the root source of the accounting profession’s challenges with workforce growth and retention.

3) Lend themselves to the persistence of risk, inconsistency, lack of visibility, and inefficiency that ultimately disables the CEO from making well-informed, real-time decisions that can optimize profitability.

This is especially true during a tumultuous macroeconomic environment. 

A Better Way to Achieving Controllers’ Goals

Fortunately for Corporate Controllers, they can simultaneously address the conflicts that Excel-based processes pose to the priorities of the CEO and achieve their secondary and tertiary priorities through commitment to their first priority—digitizing and streamlining the financial close process.

Of course, there are steps that need to be taken to make the close process resilient to a rapidly changing and increasingly complex business environment prior to digitizing it.

Corporate Controllers can improve accounting staff engagement and retention and reevaluate the controllership’s scope and structure by redefining accounting’s role to support the decision-making and growth priorities of the CEO by:

1) Ditching the risks and inefficiencies associated with spreadsheet-driven processes.

2) Leveraging technology that enables real-time visibility into the balance-sheet.

3) Removing repetitive, mundane tasks from the accountant’s day-to-day responsibilities.

Despite the reality of the accounting profession’s decline, the shift from bookkeeping to decision-support that’s offered by the digitization and streamlining of core accounting processes can deliver a sea change to the profession.

It can address the root causes of burnout, such as the prevalence of errors and rework and the long hours required of repetitive, spreadsheet-driven processes. It can align accounting graduates more closely to the education in analytics and strategy that they received in college, which can in turn make the most of the controllership’s valuable talent. It can dispel perceptions of accounting work as boring and repetitive. And most importantly, it can increase the accountant’s value by making them a stakeholder in the strategy and growth of the business.

If delaying this change to the accounting profession is to delay the growth trajectory of the controllership and its alignment to the priorities of the CEO, then this is a change that business leaders cannot afford to delay.

This blog post was originally published on the BlackLine blog.

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The Power of AR Automation in Transforming Finance Operations

Maximizing Cash Flow: How Technology Optimizes Accounts Receivable Operations

Home » BlackLine

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

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This guest post from our partner BlackLine, discussing how technology can help with the shortage of accountants.

Over the years, the accountancy profession has been known for its stability and rewarding nature. Recently, the number of students specializing in accountancy has dropped while the number of accounting professionals leaving the sector has risen. Yet the demand for qualified accountants shows no signs of abating, resulting in a pressing talent shortage in the finance and accounting industry.

Tammy Coley, BlackLine’s Chief Transformation Officer, chatted about the topic with radio station CNA938 in Singapore.

Technology in the Accounting Profession

Tammy and the show host discussed the rise of technology in the sector and its impact on the profession. Tammy noted that the pandemic caused a lot of corporations to think differently about accounting which led to an embrace of technology and its ability to reduce the reliance on manual, spreadsheet-driven processes. But, in truth, she believes the industry should have been thinking differently about it for a long time before the pandemic.

“We in the accounting profession have a significant opportunity to stop allowing these manual routine processes to continue to be the focus of the accounting function. Accounting is critical, yet many accounting professionals spend so much time simply going through the motions, doing those same processes over and over every period,” she explained.

It’s time to automate those processes so accountants can spend their time on higher value-added activities.

“I am so passionate about helping the accounting profession get away from the manual routine processes and really add value by analyzing the numbers and making sure the numbers are accurate.”

The Accounting Talent Crunch

The Association of Chartered Certified Accountants (ACCA) notes the talent crunch in the finance and accounting industry in Singapore (and elsewhere) is expected to worsen. The perception that accounting is still manual, routine, and not exciting may be part of this.

“Accounting is an awesome profession. I love, love, love accounting!” exclaims Tammy. But she goes on to say that accounting has done itself a disservice over the years by continuing to allow the processes to stay manual and routine.

However, this has exposed a huge opportunity to embrace technology and let it do the hard work on the manual, routine processes. This gives accountants an opportunity to better understand the drivers of the business and help the company make good decisions.

Let’s look at an example. In the past, you’d come to work and know that you’re going to pull this data from this subsystem, you’re going to put it into a spreadsheet, then you’re going to calculate the journal entry, and you’re going to post it.

What if, in place of you doing that process over and over, the software does it? Now, instead of posting that journal entry, you get an opportunity to step back and say, “Okay, the system posted it, but does it make sense in comparison to last period or last year? Does it make sense in comparison to forecast?” Now, you can focus on understanding whether the numbers make sense, analyzing the numbers, and helping turn the numbers into information—not just data.

Changing the Perception of Accounting

Tammy feels strongly that the industry needs to change the perception of accounting to get more people interested. The current view is that accounting is a lot of manual work—and that’s not wrong in many organizations.

Students go to school for years to become an accountant, and the job is so critical, but then some people just feel stuck in this manual process cycle. “Those manual routines? They don’t have to be manual anymore. We’ve got to take our game to the next level and not just stay back where we were before the technology could do so much for us,” Tammy explains.

With solutions like BlackLine, accounting departments can automate the manual processes, the routine tasks, and the activities that take up so much time. With that time freed up, F&A professionals can provide an elevated level of service to their organizations and stakeholders, while the organizations benefit from increased job satisfaction and employee retention.

This blog post was originally published on the BlackLine blog.

Read more about Accounting & Accounts Receivable:

Unplugging with Confidence: How Accountants Can Enjoy Vacations Stress-Free

The Power of AR Automation in Transforming Finance Operations

Maximizing Cash Flow: How Technology Optimizes Accounts Receivable Operations

Home » BlackLine

Accounting Automation Transforms Finance

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In today’s fast-paced business landscape, finance and accounting teams face increasing pressure to close the books faster, ensure data accuracy, and comply with ever-changing regulations. Manual accounting processes not only consume valuable time and resources but also pose significant risks of errors and inconsistencies. However, there’s a solution — accounting automation software.

Simplifying Account Reconciliation

One of the core features of accounting automation software is for account reconciliations. Traditional reconciliations involve manual data entry, cross-checking, and time-consuming reviews. Accounting automation software transforms this process by offering auto-certifications, matching technology, and real-time visibility into the status of reconciliations. Intelligent algorithms handle high volumes of accounts effortlessly, minimizing the risk of errors and ensuring compliance with accounting standards.

Empowering Transaction Matching

Another game-changing aspect of accounting automation software is transaction matching. Matching records from multiple data sources, such as bank statements and general ledger transactions, can be a tedious and error-prone task when done manually. Advanced matching logic can handle various types of matches, enabling efficient one-to-many and many-to-many reconciliations. This capability saves valuable time and ensures accurate results for even the most complex datasets.

The Benefits of Accounting Automation

Implementing accounting automation in your finance department offers a plethora of advantages. First, it significantly reduces the time and effort required for financial reconciliations, enabling teams to focus on value-added tasks. By automating workflows and standardizing processes, the software ensures consistency across different accounting practices, reducing the likelihood of errors and discrepancies.

Ensuring Data Security and Compliance

The best accounting automation solutions prioritize data security, confidentiality, and compliance. It should have robust encryption measures, access controls, and secure cloud storage so that sensitive financial information remains protected from unauthorized access. 

As finance and accounting professionals seek to streamline their processes and achieve greater efficiency, accounting automation software emerges as a transformative solution in the Office of Finance. By centralizing financial tasks, automating reconciliations, and providing real-time insights, the software can revolutionize the way financial operations are managed. Embrace the future of accounting automation and empower your finance team to drive business success like never before.

Read more about Accounting & Accounts Receivable:

Unplugging with Confidence: How Accountants Can Enjoy Vacations Stress-Free

The Power of AR Automation in Transforming Finance Operations

Maximizing Cash Flow: How Technology Optimizes Accounts Receivable Operations

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Unplugging with Confidence: How Accountants Can Enjoy Vacations Stress-Free

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This guest post from our partner BlackLine will help you understand how automating your financial close, implementing accounts receivable automation, and structuring and automating intercompany transactions can reduce stress and allow you to fully relax on your summer holiday.

Believe it or not, there are just a few more weeks to get in your summer vacation.

You’ve been needing a vacation, and perhaps you’ve found the perfect destination for you and your family. Whether you’re going away for a few nights or spending a few weeks, some time off is just what you deserve after a busy Q1 and Q2 this year.

Here at BlackLine, we know the pace of work in the financial sector can be all-consuming, especially for you, an accountant. We also know that PTO is essential to avoid burnout.

So while you’re excited for your holiday, there may be a nagging thought in the back of your mind … “I’m too busy to go on vacation” or “I can’t miss the month-end.” Sound familiar? We thought so.

Accountants, like professionals in many other fields, often face challenges in maintaining a work-life balance due to the nature of their work and the demands placed upon them. Here are some common challenges that accountants may encounter:

  • Long working hours: Accountants often work long hours, especially during peak periods such as month-end close or the end of the financial year. These extended hours can make it difficult to allocate time for personal activities and maintain a healthy work-life balance.
  • Deadlines and time pressure: Accountants typically work with strict deadlines which can create significant time pressure. Meeting these deadlines often requires additional hours of work, resulting in reduced personal time and increased stress.
  • Seasonal workload fluctuations: Accountants may experience significant fluctuations in workload throughout the year. During busy periods, they may be required to work more intensively, leading to the long working hours mentioned above.
  • Expectations and responsiveness: Accountants need to maintain strong relationships with their stakeholders and business leaders. This often involves being readily available and responsive to inquiries and requests, which can encroach upon personal time and limit work-life balance.
  • Technological demands: The accounting profession has become increasingly reliant on technology. While technology has streamlined many processes, it has also increased the pace of work and the expectation of immediate responses. Accountants may feel pressured to be constantly connected, which can blur the boundaries between work and personal life.
  • Continuous learning and professional development: Accountants must stay up to date with the latest developments in accounting regulations, tax laws, and industry trends. Pursuing ongoing professional development while juggling work commitments can be time-consuming and challenging to balance with personal life responsibilities.
  • Work-related stress: The accounting profession can be inherently stressful due to the complexity and high stakes involved in financial reporting, audits, and tax compliance. Managing work-related stress and its impact on personal life is essential for maintaining a healthy work-life balance.

Thankfully, you can manage and mitigate the struggles mentioned above and unplug on vacation without feeling guilty.

Set clear boundaries: Clearly communicate your vacation dates to colleagues and stakeholders and establish limits on work-related communications during your time off.

Plan for deadlines: Prioritize and complete critical tasks before your vacation to minimize the last-minute rush and avoid the need for extra work during your time off.

Coordinate workload and coverage: Collaborate with your team to ensure that the workload is appropriately distributed and that someone is available to handle urgent matters in your absence.

Disconnect from technology: Take a break from work-related technology and avoid checking emails or work messages while on vacation. Enjoy your time off without feeling pressured to stay constantly connected.

Delegate responsibilities: Delegate non-urgent tasks or responsibilities to trusted colleagues to ensure smooth workflow and prevent a backlog of work upon your return.

Make self-care a priority: Use your vacation as an opportunity to recharge and focus on personal well-being. Engage in activities that help you relax and rejuvenate, such as spending time with family and friends, pursuing hobbies, or engaging in physical exercise.

Set realistic expectations: Be realistic about what you can accomplish before and after your vacation, and communicate any potential delays or limitations to stakeholders, including clients and colleagues.

Practice stress management techniques: Use your vacation as a chance to unwind and reduce work-related stress. Engage in activities that promote relaxation and well-being, such as meditation, mindfulness, or engaging in hobbies you enjoy.

Reflect on work-life balance: Take this time away from work to reflect on your work-life balance and identify any adjustments or improvements you can make upon your return to maintain a healthier equilibrium.

Remember, time off is essential for your well-being, and by effectively managing your workload and communicating your availability, you can enjoy a well-deserved break while maintaining a healthier work-life balance.

This blog post was originally published on the BlackLine blog.

Read more about Accounting & Accounts Receivable:

The Power of AR Automation in Transforming Finance Operations

Maximizing Cash Flow: How Technology Optimizes Accounts Receivable Operations

Building Financial Resilience with AR Intelligence: Embracing the Power of Automation and Data

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The Power of AR Automation in Transforming Finance Operations

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In today’s fast-paced and competitive business landscape, finance leaders are constantly seeking ways to optimize their operations and drive growth. One of the most transformative tools available to them is AR (Accounts Receivable) automation. This cutting-edge technology streamlines manual processes, enhances customer experiences, and unlocks working capital, making it a no-brainer decision for forward-thinking organizations. 

The Quest for Agility and Digital Transformation

Recent years have been defined by constant change and technological advancement. Agility and digital transformation have become vital for organizational survival. The finance department, once seen as a back-office function, is now at the forefront of driving strategic decision-making. AR automation plays a crucial role in this transformation, enabling finance professionals to shift their focus from laborious manual tasks to high-value analysis and customer relationship management. By leveraging machine learning and AI-driven technologies, AR automation provides the data-driven insights needed to make informed decisions that fuel growth.

The Impact on Cash Flow and Working Capital

Cash flow is the lifeblood of any organization, and AR automation offers a surefire way to optimize it. By accelerating cash application, businesses can reduce Days Sales Outstanding (DSO), improve working capital management, and strengthen financial health. With faster access to critical data, finance leaders can confidently manage risks and capitalize on growth opportunities. This not only enhances financial stability but also positions the organization to navigate market fluctuations and disruptions effectively.

Enhancing Customer Experience and Loyalty

In today’s customer-centric world, providing a seamless and efficient payment experience is paramount. AR automation simplifies the payment process, enables quicker invoicing, and offers easier payment methods, leading to improved customer satisfaction and loyalty. By freeing up time and resources, finance teams can focus on building stronger relationships with customers, offering personalized solutions, and addressing their needs promptly.

A Successful AR Automation Journey

Transitioning from manual to automated processes requires a collaborative effort and a commitment to change. Successful AR automation projects involve engaging finance leaders, AR specialists, IT teams, and other key stakeholders. By gaining their buy-in and addressing their concerns, organizations can ensure a smooth implementation and adoption of the technology. Moreover, with a solution like BlackLine’s AR Automation platform, which offers quick implementation, pre-built rules, and industry-leading match rates, businesses can experience immediate benefits and drive results faster.

Numerous organizations worldwide have already reaped the rewards of AR automation. For instance, global companies have seen match rates rise from less than 38% to over 80% and as high as 92% in some places after implementing BlackLine’s AR Automation solution. These success stories highlight how embracing this no-brainer technology can revolutionize finance operations, improve efficiency, and drive business growth.

In conclusion, AR automation is a transformative tool that empowers finance leaders to create cohesion, unlock working capital, and optimize operations. Embracing this no-brainer technology is an opportunity to increase productivity, enhance customer experiences, and achieve business goals. The time to act is now, and by doing so, organizations position themselves for success in an increasingly dynamic marketplace.

Learn more about AR automation. Download BlackLine’s eBook, It’s a No-Brainer: Why AR Automation is the Go-To Tool for Organizations

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