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Import Multiple Amortization Schedules into a Reconciliation with BlackLine

October 31, 2024 by Revelwood

We recently launched a new video series on different ways to import reconciliation supporting items with BlackLine.

In our latest video, BlackLine Practice Leader, Adam Riskin, demonstrates how to import multiple amortization schedules into a reconciliation with BlackLine.

Step 1. Importing Multiple Amortization Schedules from an Excel File

The Excel file contains two prepaid items: health insurance premium and dental insurance premium, set to amortize over 12 months.
Columns C and D represent the start and end dates of the amortization, while columns E and F hold the invoice amounts and open dates.
Make sure that the field names in the Excel file match exactly with those in BlackLine for proper importing.

Step 2. Importing the Amortization Schedules

The calculation method, typically straight line, needs to be set before importing the file.
Browse and select the Excel file containing the scheduled items.
Click the “Import” button is to add the schedules to the reconciliation.

Step 3. Viewing Imported Schedules

The imported schedules will appear in the amortizable Schedule section of the reconciliation.
You’ll see the amortization amount for each month.
The “Roll Forward” button provides a traditional view of the amortizable balance at the end of each fiscal period.

Handling Non-Standard Schedules

BlackLine can calculate standard schedules automatically, but non-standard schedules may require manual input.
Non-standard schedules, such as those with varying amounts each month, may not use auto calculation methods like catch-up.
Your system administrator can use a specific technique to import these non-standard schedules.

Stay tuned for more videos from Adam on how to import supporting items into BlackLine.

Importing a Single Amortization Schedule into a Reconciliation With BlackLine

October 24, 2024 by Revelwood

We recently launched a new video series on different ways to import reconciliation supporting items with BlackLine.

When working with long-term loans, maintaining an accurate and up-to-date amortization schedule is crucial. This process becomes even more streamlined when using BlackLine, which allows users to import amortization schedules directly from Excel files.

Our BlackLine Practice Leader, Adam Riskin, recently demonstrated how to do this. Watch our video to see Adam walk through the steps to import a single amortization schedule for a five-year loan, ensuring accuracy, efficiency, and smooth data mapping from start to finish.

Step 1. Preparing the Excel File for Import

Before importing your amortization schedule into BlackLine, you need to make sure that your Excel file is well-prepared. Proper preparation not only prevents errors but also speeds up the import process.

Include all necessary fields: Your Excel file should display a comprehensive debt schedule. This includes key columns like the month-end date, description, monthly payment, interest, principal, and ending balance. The schedule should capture each month’s data throughout the five-year loan period.
Adjust field names: The column headers in your Excel file need to match the corresponding fields in BlackLine. This step is vital – BlackLine automatically maps fields based on these headers. For instance, if the system expects a field named “Fiscal Period” but your file uses “Month-End Date,” you will run into mapping issues.
Enhance descriptions: You can simplify field organization by concatenating the month names with a descriptor. For example, a “description” field might contain values such as “January Amortization” or “February Amortization.” This not only makes the file easier to read but also improves its compatibility with BlackLine.

Once your file is set up with proper headers and descriptions, you’re ready to move to the next step.

Step 2. Importing the Excel File into BlackLine

After your file is prepared, importing it into Black Line is straightforward. Here’s how to do it:

Browse for the file: Start by navigating to the import section within BlackLine and selecting your Excel file. Ensure you are working with the correct worksheet, as some Excel files may contain multiple tabs. Choose the tab that contains the debt schedule you want to import.
Automatic field mapping: If you’ve followed the earlier step of aligning your Excel file’s headers with Black Line’s field names, the system will automatically map fields like the month-end date to the fiscal period. This saves time and reduces the potential for errors.

However, if some fields don’t match exactly, you can manually map them in BlackLine. Simply use the drop-down menus provided by the system to connect the fields in your Excel file to the corresponding BlackLine fields.

Step 3. Mapping Excel Fields to BlackLine

Accurate mapping is critical for a successful import. If all your field headers match BlackLine’s expected inputs, the system will automatically map them for you. However, when discrepancies arise, such as using different terminology in your Excel file, you will need to do some manual mapping.

Manual mapping process: Use BlackLine’s user-friendly interface to select the appropriate field for each unmatched Excel column. This ensures that the correct data flows into the system. For example, if the “Month-End Date” column wasn’t automatically mapped, you would manually assign it to the “Fiscal Period” field in BlackLine.
Selecting all records: After mapping, make sure you are importing the entire schedule by selecting all records. BlackLine provides a “Select All” button, which makes it easy to include the full amortization schedule in the import process.

Step 4. Finalizing the Import Process

The final step in the import process is straightforward: simply click the “Import” button. BlackLine will then bring the entire amortization schedule into your reconciliation. Afterward, you can review the summary view of the reconciliation for the selected period.

From this summary, users can drill down into the full amortization schedule by clicking the schedule icon. This provides a detailed view of the monthly payments, interest, principal, and ending balances for each month, right up until the end of the loan.

One of the major advantages of using BlackLine is that after this initial import, the system automatically rolls the schedule forward each month. This eliminates the need for repeated manual updates, streamlining the reconciliation process for the entire loan term.

Importing a single amortization schedule into BlackLine is a simple but powerful process that can significantly improve your workflow. By preparing your Excel file properly, using BlackLine’s automatic field mapping, and finalizing the import with ease, you can maintain an accurate and hassle-free loan reconciliation process. As a result, future months will require minimal effort as the system automatically manages the schedule on your behalf.

Make sure your Excel files are always aligned with Black Line’s field headers, and you’ll enjoy a smooth, efficient reconciliation process every time.

Best Practices for Account Reconciliations

October 3, 2024 by Revelwood

This is a blog post from our partner BlackLine, sharing nine best practices for streamlining your account reconciliation process.

Account reconciliation is an accounting process that verifies the accuracy of entries in the business ledger by comparing them to the information in bank statements, business records, vendor invoices, expense receipts, credit card statements, and other data sources.

Nine Account Reconciliation Best Practices

Accountants can follow these nine best practices to ensure the accuracy and integrity of their account reconciliation.

1. Automate:

Expand automation to cover the entire reconciliation process. Like so many aspects of business accounting, account reconciliation benefits greatly from automation. Digital applications reduce time in the process by minimizing or even eliminating manual data entry.

Software can be programmed to operate on rules that improve the integrity and consistency of the information gathered and the analysis process. Digitally enhanced identification of errors and discrepancies significantly improve the accuracy of the reconciliation process. Artificial intelligence (AI) enhances the ability to identify and match appropriate documentation, reducing omissions and cutting down processing time.

2. Evaluate and Improve:

Consider how processes may need to change over time due to factors like employee turnover, new input fields, and M&A activity. As in any other process, how accountants conduct their account reconciliations should be evaluated and improved over time. Internal changes to the company structure and operations, as well as external changes in the market in which the business operates, can have a significant impact on how account reconciliations need to be conducted. Regular adjustments should be made to ensure that the process reflects these changes.

Accountants should review data files, fields of entry, and matching rules and make changes as necessary to ensure that all the data and steps in the reconciliation process reflect the most up-to-date business practices.

3. Standardize the Reconciliation Process:

Use a consistent reconciliation method. To ensure reliability, accountants should endeavor to create and employ a standardized process. Standardization creates consistency in reconciliation. Well-defined parameters and easily understood metrics reduce errors and save time. Standardized methods allow for more insightful information comparisons over time, which helps identify trends and patterns in financial data.

4. Identify and Assess KPIs:

Look at key performance indicators. Using specific metrics to evaluate the account reconciliation performance will ensure the process’s integrity. Accountants should first establish their key performance indicators (KPIs). Metrics such as accuracy, timing, and the number of errors or discrepancies help to measure the effectiveness of the process.

Establishing benchmarks for these and other metrics and regularly evaluating how the process performs against them will identify areas for improvement. The KPIs themselves may also need to be adjusted over time to reflect changes to the business and the process themselves.

5. Regularly Update Account Reconciliation Policies:

How reconciliation is performed largely depends on the policies that the business sets to govern its execution. Policies can govern many aspects of the process, including the timing and frequency of reconciliations, the steps that are followed, who is responsible for various aspects of the reconciliation process, and how errors are identified and reconciled. In the spirit of evaluating and improving, these policies should be regularly monitored and updated to reflect changes to the business and its financial activities.

6. Reconcile in Sections:

Break the process into sections. Reconciliation is a complicated process that will benefit from an incremental approach. It can be broken down into smaller steps to facilitate and make the process more manageable. For example, reconciliation can be broken down into basic elements: identifying relevant accounts, gathering data, setting a timeline, comparing statements, examining individual transactions, identifying discrepancies, and reconciling errors. Tackling each individually and sequentially will make the more extensive process more manageable.

7. Analyze Discrepancies:

Analyze any differences that are found. Once discrepancies are found, this is an opportunity for accountants to do their detective work and determine the cause. A careful review of the ledger information and the source data will help pinpoint the underlying reasons. Discrepancies can be caused by various factors, including manual errors in data entry, improper calculations, timing errors, omitted transactions, delayed payments, and even fraud. Identifying the nature of the discrepancy will determine how it should be addressed and reconciled.

8. Finish On Time:

Review and finish reconciliations on time. Timing is important in the reconciliation process. Unnecessary delays can lead to more errors or discrepancies being overlooked and carried over into another reporting period. Timely completion of reconciliation can help the business close its accounts efficiently and as scheduled, and it can help identify fraud, errors and other trends before they become compounded or cause more problems for the business.

9. Stick to Accounting Rules:

Follow generally accepted accounting principles (GAAP). In the United States, public companies must follow a set of rules, standards, and procedures set by the Financial Accounting Standards Board (FASB). These GAAP are designed to ensure consistency, accuracy, and transparency in financial reporting across various industries.

GAAP requires businesses to use the double-entry bookkeeping system. This system supports GAAP’s goals and is the most common tool for reconciliation because it requires entering a transaction into the general ledger twice. Each entry is recorded as a debit or a credit, and the two always balance out.

Why Is Account Reconciliation Important?

Account reconciliation is an essential business accounting function. It helps businesses address several fundamental objectives in their accounting processes.

All businesses must identify errors and fraud, generate accurate financial statements, file taxes, and comply with myriad laws and regulations at the federal, state, and local levels.

Reconciliation ensures the accuracy and reliability of financial practices and statements to support efficient operations and sound decision-making by management, lenders, and investors.

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

September 26, 2024 by Revelwood

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.

Close-up of a financial close chart

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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.

Mitigating Financial Risk through Automation

September 19, 2024 by Revelwood

This is a blog post from our partner BlackLine, sharing nine best practices for streamlining your account reconciliation process.

According to the Federal Reserve’s 2024 Survey of Salient Risks to Financial Stability, financial risks are expected to increase over the next 12 months, largely fueled by elevated asset valuations and a high-interest rate environment. This is not just a US issue; on the other side of the Atlantic, the Bank of England’s July 2024 Financial Stability Report has revealed that parts of the global financial system remain vulnerable to financial stresses, with a challenging risk environment here to stay.

The adjustment to the higher interest rate environment is continuing globally, and important vulnerabilities in market-based finance have yet to be addressed. This means businesses must now crucially consider and evaluate their areas of highest exposure.

Considering these conditions, organizations must be aware of and prioritize the key areas of concern to successfully emerge from the other side.

The Financial Risk of Credit Extension

One of the fundamental business risks, particularly regarding credit management, is non-payments. When a business extends credit to a customer, it typically involves issuing an invoice with payment terms ranging from 30 to 90 days – assuming the customer will settle the invoice within the agreed period.

The issue arises when the payment is delayed or, in the worst-case scenario, not made at all.

Any delayed payments lead businesses to face outstanding debt. Over time, that debt goes old, becomes aged debt, and most likely becomes a provision on the balance sheet, meaning it’s money that your business isn’t recouping.

This will ultimately affect your business’s cash flow. Businesses that don’t see this as a top priority in risk management run the risk of limiting their growth and placing significant strain on their financial obligations.

Managing Risks in Diverse Jurisdictions

Managing financial risk becomes even more complex for multinational businesses due to the varying regulatory environments across different countries.

Millions of payments are made across borders daily, and each jurisdiction has unique invoicing requirements, tax mandates, and compliance standards that businesses must meet to be financially compliant.

Globally, there is no set framework, with each country or region having its own system to comply with tax laws and government standards. For example, some countries have mandatory e-invoicing requirements, whereas others do not.

Latvia, for instance, plans to make e-invoicing mandatory for all business-to-business (B2B) and business-to-government (B2G) transactions by 2025.

This is in stark contrast to Hungary, which does not mandate e-invoicing for B2B and B2G transactions, instead opting for a real-time invoice reporting system for native companies and foreign companies with branch offices within the country.

Additionally, compliance with regulatory requirements such as the US’s Sarbanes-Oxley Act (SOX) is crucial for financial reporting and risk management. However, complying with SOX presents significant financial risk challenges to organizations, primarily due to its stringent requirements for internal controls and financial reporting.

Public companies view SOX compliance as a routine checklist of tasks to be completed. They may skip the part where their business should carefully consider the specific risks that could impact the accuracy and integrity of their financial reporting.

In simpler terms, this means that the organization does not thoroughly analyze potential risks and does not establish control measures to address those risks effectively. Without a risk-based approach to SOX, organizations may find it challenging to identify and monitor emerging risks most effectively, leaving them vulnerable to compliance breaches and financial misstatements.

Strengthening Controls Through Automation

Fortunately, we live in an era where businesses can mitigate risk by leveraging automation to strengthen controls over their financial processes.

Modern technology is playing an increasingly important role in alleviating challenges for F&A and credit management teams, giving them tighter control over a range of activities and simple risk flags like changes to the bank account a payment is made into.

Adding an automation element to risk management arms businesses with the tools to process data in real-time. Traditional methods, mainly from the invoicing side, rely on periodic data analysis, often leaving businesses to react to overdue payments rather than anticipate them.

Modern, automated systems can flag potential risks as soon as they emerge, allowing businesses to react more efficiently to them.

An example would be if a customer has a County Court Judgement (CCJ) issued against them in the UK or a Civil Judgement in the US. Rather than waiting for them to miss the payment or the invoice due date, automated systems allow businesses to take corrective actions – such as contacting the customer or adjusting credit terms –before any payment issues escalate.

Navigating the role of human error is another aspect to consider when considering risk management strategies. Anytime humans are involved in practices such as data entry or evaluation, simple mistakes can creep in whereby a one becomes a two or a nine becomes a zero and suddenly you run the risk of misrepresenting figures.

Modern automation reduces this risk, eliminating the need for manual spreadsheet entries, enhancing both the accuracy of data and reducing the risk of non-compliance.

The human element is particularly important when considering compliance with regulations such as SOX in the US. These regulations require stringent controls to ensure accurate financial reporting and automated systems help facilitate adherence to these regulations by ensuring consistent and accurate data processing throughout.

Automation streamlines and strengthens the compliance process and provides clear documentation of financial transactions, which is essential for audits and regulatory reviews.

What About AI?

Naturally, Artificial Intelligence (AI) is starting to creep into conversations around financial risk management. BlackLine’s research of over 1,300 global C-Suite and F&A leaders revealed that they see generative AI (78%) and new kinds of AI (76%) as essential for improving business resiliency in the face of future disruption.

Businesses are looking for solutions with embedded AI algorithms to evaluate customers’ payment behavior over time and flag deviations from expected patterns to enhance their proactivity.

By continuously learning from new data, AI systems can refine their predictions and improve risk management strategies, providing businesses with a dynamic tool for navigating financial uncertainties into the future and beyond.

Generative AI also has potential in this area. The beauty of generative AI is that you don’t need to be an expert coder to use it – it gives users the ability to query data in natural language – making it more straightforward and intuitive for F&A teams to find the answers they need at a greater speed.

AI functionality will continue to develop as we move through the remainder of 2024 and beyond, but businesses should also consider the technology’s dual potential. While it can enable more proactive risk mitigation strategies, organizations need to ensure the technology does not create risks of its own.

It must be implemented and used within existing compliance frameworks and have its own set of checks and balances.

Ultimately, robust controls are critical for businesses in the current, complex risk landscape. However, this landscape is also set to evolve rapidly going forward, and controls and compliance must keep pace if businesses are to remain resilient in testing times.

How Automating Accounting Meets the Growing Demands of Finance

August 22, 2024 by Revelwood

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.

How CFOs Stay Ahead of Rapidly Changing Markets

August 1, 2024 by Revelwood

This is a blog post from our partner BlackLine, detailing five considerations for CFOs to thrive during innovation-fueled market disruption.

The rapidly increasing pace of innovation is changing the landscape of financial decision-making. As the financial leaders of their organizations, CFOs play a crucial role in adapting strategies and processes to stay ahead in rapidly changing markets.

The most successful CFOs emphasize transparency in their financial data and collaboration across their organization to unlock analytical narratives that inform critical decisions while achieving timely and accurate financials. Timely, accurate, and transparent financial data are now the core tenets of financial excellence, from strategic decision-making to earning stakeholder trust.

Let’s examine five factors regarding the importance of precise, timely, and transparent financial data amidst technology-driven disruption.

1. Timely Insights Drive Proactive Decision-Making

In today’s fast-paced and ever-evolving finance and business environment, the adage ‘time is money’ is more relevant than ever. A recent IDC survey on generative AI (GenAI) revealed that 37.4% of organizations anticipate GenAI will disrupt their competitive position.

This clearly indicates that GenAI and other technologies are revolutionizing the speed and quality of data. As a result, CFOs need to be at the forefront of these changes, leveraging technology to accelerate the delivery of timely and actionable data.

Timely financial statements and detailed analysis provide decision-makers with up-to-date and relevant information, enabling them to respond effectively and efficiently to changes in market conditions, capitalize on opportunities, and mitigate risks before they escalate. In an environment where agility is not only key but also a competitive advantage, the speed of financial insights is a critical determining factor of success. The urgency of this cannot be overstated.

2. Accuracy as the Cornerstone of Reliability

Accurate financial statements and accompanying fluctuation commentary are the bedrock of reliability in financial reporting. Precision in data collection, recording, and analysis is the key to building trust with stakeholders. However, a Gartner study found that 59% of finance and accounting teams make multiple errors in their financial data every month. These errors can have serious consequences, underscoring the need for CFOs to prioritize accuracy in their financial data and take steps to reduce these errors.

Inaccuracies compromise decision-making and erode the trust and confidence of investors, creditors, and other stakeholders. Achieving financial goals requires a foundation built on accurate, timely, and reliable financial statements, fully supported by solid explanations of fluctuations. Additionally, accurate financial statements assist in the journey to compliance with regulatory standards, avoiding legal consequences and reputational damage.

3. Transparency Builds Confidence & Trust

A recent survey by Censuswide found that 42% of finance and accounting leaders do not entirely trust the accuracy of their organization’s financial data. Clear, open, traceable, and transparent financial statements and analyses demonstrate a commitment to openness and accountability.

Stakeholders—whether the CFO, CAO, investors, employees, auditors, or regulatory bodies—appreciate an organization that is forthcoming with its financial information. Focusing on transparent reporting fosters trust, laying the groundwork for positive relationships and long-term partnerships. For example, well-informed investors are likely to engage positively with organizations that focus on driving trust.

4. Informed Decision-Making for Strategic Excellence

Accurate and transparent financial analysis remains paramount to strategic decision-making. It provides insights into accurately assessing performance and risks and identifying growth opportunities. Gartner found that 76% of CFOs indicated improving financial metrics and insights as a top priority.

Informed decisions, backed by thorough financial narratives, position organizations to navigate complexities, optimize resources, and stay ahead in a highly competitive and ever-changing landscape.

5. Operational Efficiency & Continuous Improvement

Continuous optimization to deliver efficiency is the lifeblood of successful organizations. Timely financial analysis enables swift and better-informed decision-making and contributes to operational efficiencies. Yet, Accenture found that finance and accounting teams often spend up to 85% of their time on low-value and labor-intensive tasks like preparing data and analysis.

Organizations must look for ways to reallocate capacity and support timely and actionable financial analysis. Detailed and transparent analysis sheds light on operational performance, allowing organizations to identify areas for improvement, optimize processes, and drive continuous enhancements across the organization.

The importance of timely, accurate, and transparent financial statements and analysis cannot be overstated in the pursuit of financial excellence. These elements are reporting requirements and strategic business partner imperatives that guide decision-making, build trust, and drive operational efficiency. As organizations strive to navigate the complexities of the financial landscape, embracing these pillars becomes a pivotal step toward sustained success, growth, and resilience in an ever-changing business environment.

This blog post was originally published on the BlackLine blog.

Industry Analysts’ Take on F&A Priorities

July 25, 2024 by Revelwood

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.

The Importance of Taking an F&A-First Approach

June 27, 2024 by Revelwood

This is an excerpt of a blog post from our partner BlackLine. It explains how Finance & Accounting can play a pivotal role in decision-making, ensuring compliance and optimizing financial performance.

In today’s business environment, finance organizations are continually challenged to adapt and thrive amidst rapid technological advancements and market disruptions.

Now more than ever, there’s a growing recognition of the need for finance teams to automate operations, streamline processes, and leverage data-driven insights to enhance agility, resilience, and competitiveness.

At the heart of this transformation journey lies the finance and accounting (F&A) function, playing a pivotal role in driving strategic decision-making, ensuring compliance, and optimizing financial performance.

However, despite the increasing demands placed on F&A teams, finance leaders (chief financial officers) continue to grapple with a myriad of challenges that hinder their ability to operate efficiently and strategically. Manual, paper-based processes, siloed data sources, and non-standardized practices not only contribute to inefficiencies and errors but also limit the capacity of F&A professionals to focus on value-added activities such as data analysis, forecasting, and strategic planning.

Recognizing the critical role of F&A in driving organizational success, forward-thinking CFOs are embracing an F&A-first approach to digital finance transformation. Unlike traditional transformation initiatives that often prioritize front-office functions, an F&A-first approach places finance functions at the forefront, positioning them as catalysts for change and innovation across the organization.

Is your organization ready for a digital transformation?

Top Challenges F&A Teams Are Facing

Despite their pivotal role, F&A teams often face several common challenges that impede their ability to operate effectively:

Data Is All Over the Place

Financial data is often scattered across disparate systems and sources, making it challenging to aggregate, validate, and analyze data in a timely and accurate manner. Data security is also an increased risk when working across these siloed systems.

Non-Standardized Processes Get… Complicated

Evolving business models, regulatory requirements, and global operations can result in complex and non-standardized processes, leading to inefficiencies, errors, and compliance risks.

Repetitive, Manual Work

Many F&A activities are still heavily manual, relying on spreadsheets, emails, and manual journal entry, which not only consume valuable time and resources but also increase the risk of errors and fraud.

If any of these obstacles sound familiar to you or your finance team, it’s time to consider starting your digital transformation journey.

Why an F&A-First Approach?

By prioritizing financial process automation in the digital transformation journey, you and your F&A team stand to gain several key benefits:

Quick Wins Are Still Wins

F&A teams can deliver incremental improvements and efficiencies, addressing immediate pain points and demonstrating tangible value to the organization without waiting for a full-scale transformation.

Enables Transformation Across Your Organization

Starting with finance and accounting sets the foundation for broader organizational transformation initiatives, ensuring seamless integration with existing systems and processes and laying the groundwork for future innovation.

Long-Term Strategic Value

An F&A-first approach empowers organizations to unlock long-term strategic value by enhancing data quality and accuracy, improving decision-making, and enabling F&A professionals to focus on high-impact activities that drive growth and innovation within their business environment.

Wrapping Things Up…

By adopting an F&A-first approach to transformation and leveraging BlackLine’s innovative solutions, organizations can unlock new efficiencies, enhance visibility and control over financial reports and data, and position their F&A function as a strategic partner in driving business success.

This blog post was originally published on the BlackLine blog.

BlackLine

Step 1. Importing Multiple Amortization Schedules from an Excel File

Step 2. Importing the Amortization Schedules

Step 3. Viewing Imported Schedules

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Step 1. Preparing the Excel File for Import

Step 2. Importing the Excel File into BlackLine

Step 3. Mapping Excel Fields to BlackLine

Step 4. Finalizing the Import Process

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Nine Account Reconciliation Best Practices

1. Automate:

2. Evaluate and Improve:

3. Standardize the Reconciliation Process:

4. Identify and Assess KPIs:

5. Regularly Update Account Reconciliation Policies:

6. Reconcile in Sections:

7. Analyze Discrepancies:

8. Finish On Time:

9. Stick to Accounting Rules:

Why Is Account Reconciliation Important?

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The Financial Risk of Credit Extension

Managing Risks in Diverse Jurisdictions

Strengthening Controls Through Automation

What About AI?

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Why the Bullishness Towards Investment in Technology?

4 Reasons Why CFOs Everywhere Are Automating Their Accounting Processes

2. Technology is the #2 priority for CEOs

3. Recruiting and retaining top talent

4. Our volatile economic environment

How Are CFOs Navigating These Demands?

Read more about Accounting & Accounts Receivable:

1. Timely Insights Drive Proactive Decision-Making

2. Accuracy as the Cornerstone of Reliability

3. Transparency Builds Confidence & Trust

4. Informed Decision-Making for Strategic Excellence

5. Operational Efficiency & Continuous Improvement

Read more about Accounting & Accounts Receivable:

AI: Bridging the Gap Between Perception & Reality

Talent & Career Development: Embracing Change

Value Delivery: Moving Beyond Efficiency

Four Strategies for Addressing F&A Priorities

Create a Culture of Continuous Learning

Leverage Technology for Operational Excellence

Build a Robust Data Foundation

Understand AI & Its Implications

Read more about Accounting & Accounts Receivable:

Top Challenges F&A Teams Are Facing

Why an F&A-First Approach?

Wrapping Things Up…

Read more about Accounting & Accounts Receivable:

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