BlackLine’s focus on data fundamentals will set you up for GenAI success

While the opportunity of generative artificial intelligence (GenAI) is gaining prominence in finance and accounting (F&A), the reality is that most large organizations have several obstacles to overcome before they can tangibly make progress on it. The march toward data-driven finance requires CFOs to consider finance data integrity more broadly and to get financial accounting processes right. That hasn’t changed with GenAI. We recently spoke with executives at BlackLine, one of the leading financial and accounting platforms, to get their perspective on helping clients close this fundamental data gap. They shared recent and ongoing data and AI investments to make the record-to-report (R2R) activities of the F&A value chain more robust for its clients, ensuring the integrity of financial reporting and data quality of the processes.

Creating a trusted data foundation in finance

In the F&A value chain, the R2R activities, including recording transactions, have an essential role in establishing a solid foundation for business analysis and predictions. These are crucial in governance, compliance, risk mitigation, and trust assurance. R2R processes are either enablers or major roadblocks for finance leaders trying to become more data and AI driven. As the CFO of a large property and casualty insurance company shared with us candidly, “[Getting to predictive and prescriptive planning and GenAI] will be years away for insurance. Our data struggles; we are still trying to get one set of financial statements rolling up to get another set of numbers. We’ve worked through that and are getting better.”

BlackLine highlights that its biggest initiatives with clients are on the upstream steps of reconciling transactions and automating work to build data integrity. For example, it helps clients identify and manage risks related to journal entries by assessing whether they meet specific criteria. BlackLine helps ensure data quality throughout the R2R process, reducing potential errors.

Having unified, reliable data is crucial, especially regarding financial reporting. The effectiveness of both traditional and GenAI relies on accurate data for predictive algorithms to give actionable results. Trustworthy financial data is essential for leveraging AI in financial processes and applying advanced AI features at a scalable pace.

BlackLine takes an integrated approach to GenAI

BlackLine is working with clients to deploy GenAI with specific requirements to increase F&A’s productivity and strategic decision making while carefully weighing the risks and benefits of GenAI to ensure the meaningful articulation of the underlying data.

It focuses on digitalizing F&A R2R activities to bring efficiency to the financing processes, applying AI at scale in financial reporting and identifying higher-risk areas. Additionally, BlackLine is developing multiple use cases combining Gen AI and other tools:

• BlackLine’s Account Health AI enables users to analyze and recognize high-risk accounts by identifying reconciliation risks, prioritizing investigation, and mitigating risk with proactive analysis.
• AI-enabled Journals Risk Analyzer automates and continuously monitors journal entries and analyzes key criteria, such as identification of outliers, lag in posting the entry, and accounts it is associated with, among others. This also helps identify potential fraud, flag unusual transactions, and uncover risks.
• Enabled with machine learning, BlackLine has developed a payment forecast dashboard to analyze customer payment behavior. It considers past payment activities to predict the probability of on-time payments. In a proof of concept, the AI-generated payment forecasts improved accuracy by reducing variance by 28%–42%, depending on the invoice dataset size, compared to the existing average variance of 12%–15% from actual payments.
• “BL GPT” is a GenAI-embedded assistant that crafts requests and summaries and applies the latest accounting standards to every process. It ensures that users receive the most relevant answers at the right time.

BlackLine is investing in technologies to deliver the benefits of software as a service. It is embracing AI and embedding it across the F&A platform to improve processes and realize tangible benefits for clients, accelerating the availability of financial information for financial reporting and business decision making. Also, it aims to improve accuracy and bring precision from each transaction to every financial statement. An integrated approach to GenAI will likely be the best way to maintain transparency and avoid black-box models.

The Bottom Line: Similar to how BlackLine approaches this technology evolution, you should consider how GenAI could form part of your broader data and AI strategy. You need to get the sequencing of your data initiatives right. Strengthening the finance data core will lead to impactful results from GenAI.

It is important to have clear data fundamentals in place to obtain usable and accurate insights from advancements in AI. BlackLine aims to position itself as complementing existing AI and data investments while helping clients benefit from the latest wave of GenAI. BlackLine’s focus on R2R activities to get the core of financial transactions right first will help drive business value for enterprises. It is investing in both ends of the spectrum to meet clients where they are—a prudent move, given so much attention is needed on data fundamentals, yet the pace of overall AI R&D continues.