Ultimate Guide to BlackLine Account Reconciliation

Account reconciliation is an important part of financial close that is prone to unintentional human error and can be time-consuming for accounting teams, necessitating automating and streamlining the process. BlackLine Account Reconciliation is one tool that companies and their modern accounting teams use for this purpose.

This article looks at how BlackLine facilitates the financial reconciliation process, how it works, what options and features it offers, and how much it costs. 

When choosing the best account reconciliation software, it’s important to explore a few different options, especially if your team finds implementing and working with BlackLine to be complicated. Numeric is one alternative to consider, a good fit for companies that want much of the power and flexibility of BlackLine, but are struggling to configure BlackLine properly. Numeric couples sophisticated reconciliation tools with an easy-to-use interface.

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What Is BlackLine Account Reconciliation?

BlackLine is a cloud-based financial and accounting automation software. BlackLine Account Reconciliation is an indispensable feature of the BlackLine platform which streamlines and automates the account reconciliation process, associated with the monthly financial close.

As a leading software tool in the field of financial reconciliation, BlackLine helps companies:

• Automate the reconciliation process by matching transactions in subledgers and their GL
• Configure reconciliation workflows based on the specific needs of the business
• Integrate with previously used spreadsheets, financial systems, and ERPs to facilitate processes
• Keep track of the reconciliation process for on-time reviews and approvals by all involved parties
• Make sure that balance sheet account reconciliations comply with internal and external rules and regulations
• Access some reporting and analytical insight dashboards to identify possible areas of improvement

All in all, tools like BlackLine Account Reconciliation reduce the time that accountants need to spend in timesheets and the errors they can make while reconciling accounts.

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BlackLine During the Financial Close

BlackLine offers a comprehensive close management solution that helps businesses - which have the necessary human resources to implement the platform efficiently - unify and automate their financial close processes. BlackLine brings task management, centralization, automation, improved compliance, and real-time visibility to enterprises and their financial teams.

The BlackLine Account Reconciliation module nests under the broader umbrella of BlackLine’s close management software, which includes project management of all tasks involved in the monthly close. Across the month, teams log in to BlackLine to complete recs, approve records, and submit tasks within their financial close checklist.

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Reconciliation Automation Benefits: Less Time in Excel

Traditionally to produce accurate financial statements, reconciliation was done manually and required multiple hours of comparing numbers from numerous sources, month after month. When this kind of work is done in spreadsheets, it’s prone to human error, the effects of which are multiplied each time a formula is copied across a spreadsheet and the wrongful balance is carried forward to the next month.

Accounting software solved this problem by automating and streamlining the process of financial reconciliation via tools like transaction matching, minimizing the work that has to be done in Excel spreadsheets, and introducing important controls along the way.

While spreadsheets are still involved in reconciliation, teams are no longer fully reliant on catching changes and differences in Excel alone. Automating account reconciliation translates into less time spent in spreadsheets and higher confidence in end data quality, particularly for teams tackling more complex inter-company accounting. 

The emergence of tools like BlackLine Account Reconciliation has brought many benefits for companies and their accounting processes:

• Elimination of unnecessary paperwork
• Standardization in reconciliation templates
• More efficient workflows
• More accurate reconciliation results
• Improved reporting accuracy
• Centralize for better visibility among teams
• Stronger controls
• Enhanced audit readiness
• More time left for strategic thinking 

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When to Use BlackLine Account Reconciliation & Who's a Good Fit

With its sophisticated tools and functionalities, BlackLine can be a great fit for different types of large-scale businesses. Given the robustness of configuration options, many companies using BlackLine have a staff member assigned as the platform specialist, responsible for changes to the platform and for responding to internal questions on setup.

However, for smaller teams with limited human resources, the complex platform and the steep learning curve can make BlackLine suboptimal.

BlackLine Account Reconciliation is a good fit for:

• Mid-size companies: Mid-market businesses with devoted finance and accounting teams with backgrounds leveraging BlackLine find the platform beneficial in streamlining financial reconciliation. Typically companies managing intercompany reconciliations benefit strongly from reconciliation software. 
• Large enterprises: Large companies, whether privately held or publicly listed, working in diverse industries, are able to improve processes involving numerous employees in different departments and offices with customization and flexibility.
• Governmental bodies: Public institutions and governmental departments can use BlackLine to improve public budget transparency and accountability.
• Large-scale non-for-profit organizations: International NGOs are able to streamline reconciliation processes and demonstrate improved accuracy and accountability to management and donors.
• Accounting firms: Accounting firms with multiple clients with hundreds of accounts with primarily larger companies can enhance productivity.

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Teams that want much of the power of BlackLine but can’t devote dedicated staff to implement and provide ongoing support for reconciliation software should consider Numeric. Numeric offers all the must-have functionalities of BlackLine via an extremely intuitive and user-friendly interface and design.

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How Does BlackLine Account Reconciliation Work?

Reconciling accountd with BlackLine requires conducting an initial, one-time setup and performing a list of tasks during each close.

Setting Up BlackLine Account Reconciliation

The steps needed to get started include:

1. Set up a template: Users can choose from nine standard, readily available templates and customize them to their specific needs by adding, deleting, and rearranging fields. This is a one-time process, and templates can be revised later on and adjusted when needed.
2. Add basic template information: You can add company policies, procedures, and guidelines that get automatically carried forward month after month to ensure compliance with internal and external requirements.
3. Add items and data: You can add items related to the GL, subledgers, and supporting documents manually or import data from spreadsheets, financial systems, and ERPs. After reconciliation, balances get automatically rolled forward each month.
4. Configure workflows: You can outline the steps of the reconciliation process and specify the main roles like preparer and reviewer so that in the future account reconciliations automatically move to the next person once a stage has been completed.
5. Schedule balances: You can automatically feed the GL balance on a scheduled basis, with a frequency selected by you. BlackLine sends a notification when the balance changes and decertifies it for another review. Note: Alternative reconciliation tools can provide transaction-level details on what has changed.
6. Introduce controls: BlackLine adds multiple levels of control throughout the reconciliation process, minimizing the risk of human error and fraud. One control option is to set up your own thresholds for automatic certification through auto-certification rules. Another typical control is that, once reconciliation has been certified, no further changes and comments are possible.
7. Apply automatic certification: To save extra time, you can set BlackLine to automatically certify reconciliations if the schedule balance meets the general ledger within a threshold, determined by you.

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Once a reconciliation template has been set up and implemented, all the basic data and documents will remain there to use in upcoming reconciliations. Remaining balances will be rolled forward into the next period.