Over the years, manufacturers have spent much time, effort, and money improving and modernizing their financial systems. Investments in enterprise resource planning systems, for example, which have become the financial backbones of many companies, have been large both before and after Y2K and are continuing apace today. These systems have automated the accounts receivable, general ledger, and accounts payable functions, among others, helping many a manufacturer get a more accurate and complete picture of how they are performing.
But there's still one aspect of these financial operations — the close process — that cries out for attention, according to Blackline Systems, a 6-year old Calabasis, CA-based software company. In a recent briefing, Blackline founder and CEO Therese Tucker said that many companies are closing their books either manually or using spreadsheets, leading to errors. And many companies face the problem of having multiple general ledger systems. Moreover, she claimed, ERP systems don't have the functionality to automate the close process effectively.
"We've been shocked by how unorganized the process is," Tucker said.
Her company, which was originally named Osaba, Inc., but changed its name to Blackline last year, started out by developing a wealth management system. Early clients were Merrill Lynch and the First National Bank of Nebraska. In January 2004, Blackline came out with a balance sheet account reconciliation product.
Today, the Blackline software has six modules: balance sheet reconciliation, task management, journal approvals, variance analysis, transaction matching, and journal creation. The Microsoft .NET-based application is offered on an on-demand basis or in an enterprise version, Tucker said. Blackline has about 50 licensees, including AT&T, Del Monte Foods, Chrysler, Monsanto, and Northrop Grumman.
AT&T estimates that it is saving $40,000 in labor costs per month using the Blackline system. The communications company performs 22,000 balance sheet reconciliations a month, 73% of which are automated using the Blackline software.
Tucker said Blackline, with 20 employees, is "very profitable" and growing quickly. Some venture capital may be in the company's future, she hinted. Meanwhile, Blackline recently joined the Oracle partner network. Tucker said Blackline is considering joining other ERP provider partner programs in the future.
This article originally appeared in the December 2007 issue of Managing Automation.