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2024 Predictions for Finance & Accounting

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

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

1. The Rise of AI in Finance & Accounting

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

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

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

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

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

A computer with a screen showing a message Description automatically generated with medium confidence

2. Global Minimum Tax Regulations & Organizational Data Needs

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

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

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

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

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

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

F&A Should Embrace Innovative Technologies

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

This blog post was originally published on the BlackLine blog.

Read more about Accounting & Accounts Receivable:

Leveraging Technology to Help Accounts Receivables Teams

CFOs are Investing in Automated Accounting

Trends in Financial Management for Midsize Organizations

Home » BlackLine » Page 5

Offsite 2024: Investing in Our People

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Each year we bring our team together for our corporate offsite. This year Revelwoodians came from near and far – from the Tri-State area near our New Jersey-based headquarters to the Greater Boston area, the West Coast (specifically, California and Washington), Florida and even Scotland. 

Offsite gives us an opportunity to learn, share, bond and have fun with each other. While the content varies year-to-year, the objective of our offsite stays the same – to reinforce our culture and create an environment to work better together.

“On one hand, offsite can be costly,” said Ken Wolf, CEO, Revelwood. “That includes not just direct costs, but the opportunity costs of taking two full billing days out of our monthly cycle. On the other hand – offsite is priceless. It serves as a time to bring together a largely remote organization, get the team away from the day-to-day work, and help them learn, help our clients and get to know each other better. We reinforce our core values, and most importantly, we have fun together.”

This year’s offsite included bringing a guest speaker from Princeton University to share his thoughts on Generative AI (artificial intelligence), the team meeting our new managing director for Europe, Jonathan Dunn and our new director for Latin America, Hector Osuna.  

“This was my first offsite,” said Shammah Momplaisir, FP&A consultant, Revelwood. “I really enjoyed it. It was a great balance of meetings, planned activities for bonding, and time to ourselves. One of the fun events was our AMBA (mini-basketball) tournament. I didn’t make it to the playoffs, so I sat with the scorekeepers. To make it even more fun, I decided to serve as the commentator for the tournament. It ramped up the energy – even though it was late at night.”

Mary Luchs, a senior consultant at Revelwood, enjoys the mix of work and fun. “Offsite reminds us to rely on each other,” commented Mary. “The informal aspect of offsite provides some of the most value – you get to talk to and hang out with people you don’t work with on a day-to-day basis. You can carpool to activities with other Revelwoodians you might not know well. It helps to create a sense of team purpose.”

One highlight of the annual meeting is our Core Value Awards ceremony. Our core values are a fundamental part of Revelwood’s culture, and we talk about them every day. Each and every Revelwoodian lives our core values. 

Before offsite, our leadership team identified individuals who stood out with respect to our core values. This year’s Core Values Awards ceremony recognized our team members who embody these values. Our Core Values are:

  • Be Passionate
  • Do the Right Thing
  • Take Initiative
  • It’s About the Team
  • Take Pride in Your Work
  • We Care

Some years – such as this year – the leadership team decides to recognize one individual as the Ideal Revelwoodian. This award is not given out every year – it’s for when someone goes far above and beyond expectations. This year we bestowed the award on Dave Miersch, our Workday Adaptive Planning practice leader.

“Our investment in offsite creates magic,” added Ken. “We come out of offsite with a better, smarter, more connected team. They are passionate about helping to make our clients successful, to grow our business, and to help us achieve our goals.”

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Unlocking the Potential of Accounts Receivable in 2024

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

The Rising Strategic Role of Accounts Receivable

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

Expectations for Accounts Receivable in 2024

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

Navigating Relationship Dynamics in Accounts Receivable

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

Impact of Technology on AR Performance

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

Investments in People and Technology

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

Empowering Accounts Receivable Professionals

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

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

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

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Trends in Financial Management for Midsize Organizations

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

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

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

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

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

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

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

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

Driving Toward Agility & Scale in the Office of the CFO

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

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

Persistent Pain Points for the Midsize CFO

There are several places where midsize businesses still struggle today.

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

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

Benefits of Financial Modernization

The expected benefits of financial modernization include the following:

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

Considerations for Midsize F&A Leaders When Evaluating Financial Technology

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

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

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

Advanced Technologies in Finance & Accounting

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

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

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

This blog post was originally published on the BlackLine blog.

Read more about Accounting & Accounts Receivable:

Fixing Intercompany

How Artificial Intelligence Can Reduce Transaction Failure Rates in Intercompany

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

Home » BlackLine » Page 5

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 » Page 5

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 » Page 5

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

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

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

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

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

Clear Objectives & Goals

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

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

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

Establish Metrics That Align with Automation Goals

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

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

Key Stakeholder Engagement

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

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

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

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

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

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

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

Change Champions

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

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

Testing Before Showtime, Not After

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

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

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

Balancing Perfection & Progress

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

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

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

Sharing the Success

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

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

This blog post was originally published on the BlackLine blog.

Read more about Accounting & Accounts Receivable:

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

Redefining Accounting: Embracing Technology to Transform the Profession

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

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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

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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.

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 » Page 5