Today’s enterprise information systems can access more data—and more detailed data—than ever before. But with greater data volume and complexity come the challenges of making sense of it all, and turning the data into actionable information. There is substantial room for improvement in this area, and that’s where analytical reporting comes in.
Generating accounting and financial reports using conventional accounting methods and ERP GL applications is far less than ideal. These typically require users to stop mid-process and then go through one or more data extractions—such as dumping to spreadsheets—to build their reports.
Even if they use the built-in tools offered by the applications, users are still required to move from the process at hand into the reporting section of their software, which means moving to an entirely different area. And even here, they often end up scratching handwritten notes as they navigate through data to build the report they need.
“Conventional reporting works fine for simple jobs,” says Stephen Wolfman, BlackLine’s director of platform product management. “It’s usually fine for getting at raw data or filing simple status reports.
Your Worst Enemy
“But if you’re looking for an explanation, for an anomaly, for instance, it can be your worst enemy. You can end up piling through mountains of raw data, extracting, testing, then extracting some more. It can easily take 30 minutes to find the exact cell that holds the answer to your question.”
This process creates several problems. For one, exporting and processing data externally, whether via spreadsheets or through an application’s dedicated reporting section, greatly increases the risk of error cropping up. This becomes particularly problematic if the resulting data from the analysis isn’t folded back into the application. If it’s left in the wild, so to speak, that data can be easily corrupted or rendered obsolete by further processing in the GL.
Operating at the Point Of Need
That’s why companies like BlackLine are now creating in-line reporting tools that are embedded in and synchronized with the users’ specific workflows. They operate in real time, at the point of need, rather than forcing the user to move away from the task at hand.
Wolfman offers an example. As part of the account reconciliations process, BlackLine automatically generates a list of open items. These contain information to explain why any balances may be slightly off, and this reasoning becomes an integral part of the reconciliation itself.
“The open items often refer to something where corrective action is required in the ERP system,” he says. “But first you need to know about each item—its age and its materiality. To find that out, you need to export the data to Excel and work with it to get to the explanation. Then if something changes, you’re going to need to run that report again. So you need to export the data again.
“But say I’m in BlackLine’s reconciliation application. With in-line reporting, I can immediately see the aging profile and the materiality of each open item. So I can decide right there which need attention and which don’t. I don’t have to move between two applications, or two sections of the same application, which gets really difficult when you might be talking about hundreds of thousands of transactions.”
BlackLine’s in-line reporting architecture is supported by BlackLine’s Atlas Grid processing framework. This grid, which includes patented technology, applies BlackLine’s domain knowledge in financial processes and organizational structures to support ultra-fast processing of millions of records at a time.
“Searching for accounting information isn’t a simple matter,” Wolfman says. “A regional controller might need to look at very different information from a local controller. And a company in one industry needs much different detail from a company in a different industry.”
Key to Continuous Accounting
As in-line reporting functionality is integrated into each of BlackLine’s products, Wolfman’s group will add support for visualization, predictive analysis, and other capabilities to BlackLine’s new reporting paradigm.
“To make continuous accounting work, reporting has to step up,” says Wolfman. “For instance, predictive analysis is key to helping organizations build continuous improvement into their F&A processes. And it’s a key ingredient in Continuous Accounting.
“Say you want to look at the transactions that are coming in. With predictive analysis, you get help in anticipating trends as they occur, rather than waiting for the month-end. This can give you a leg up—and maybe a week’s advantage—over your competitor, who’s still running after-the-fact reports.”
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