BlackLine’s FourQ acquisition takes on the tangled web of intercompany operations

Intercompany transactions have accelerated recently for several reasons: companies are growing at a global scale, acquisitions are rampantly adding to disparate processes, increased enforcement of global accounting and tax regulation, and integrated supply chain. The acceleration leads to increasing volumes of disorderly/irreconcilable transactions, entities lacking standardizations, and systems being legacy-strangled and siloed—all adding to a spaghetti-like complexity that finance needs to tackle. In early 2022, BlackLine, an accounting automation software company, acquired FourQ, an intercompany financial management software provider. The acquisition adds complementary capabilities to BlackLine’s existing intercompany automation solutions and strengthens its position with the office of the controller.

BlackLine aims to drive beyond zero netting of intercompany activity with optimized, tax-efficient intercompany processes

Most organizations see intercompany activity as a zero-sum game because they are effectively buying from and paying themselves—moving money from their left to their right pocket. But doing business accrues transactional debt, involves multiple stakeholders, and builds a complex web of internetworked trades. The responsibility to streamline, standardize, and reconcile these transactions lies with the finance department. Additionally, businesses struggle to reconcile after close, especially with a high transaction volume, so finance leaders seek an optimal way to manage processes and mitigate associated risk while staying within the regulations.

BlackLine has now integrated FourQ’s intercompany processing technology into its platform. BlackLine clients can now drive real-time visibility into their global entities’ transactions for tax, regulatory, and period-end close reporting. Clients also benefit from increased levels of automation in intercompany reconciliation, settlement, and clearing, and they have clarity on out-of-balance positions, better data flow for forecasting, improved organizational alignment, and integrated upstream and downstream processes.

Bringing touchless automation to untangle complexities of intercompany operations

BlackLine believes that by bringing together business process re-engineering with technology to manage a company’s global intercompany operations spanning finance, accounting, tax, and treasury departments, they are reinforcing the new discipline – Intercompany Financial Management.

Blackline’s acquisition of FourQ brings touchless automation to processing large volumes of intercompany transactions. It is designed as a plug-and-play solution that can be easily configured along any billing route without elaborate integration into workflows and integrating with multiple enterprise resource planning (ERP) systems. The platform makes calls, pulls data from systems, and executes calculations like allocations or tax amounts based on transaction type, taking on that burden from finance and accounting (F&A) teams who otherwise would manually handle recovery and reconciliation of large volumes of transaction data.

Bringing the spotlight on the back-office function with end-to-end solutions for the office of the controller

The office of the controller has been an area of underinvestment in technology adoption, creating an environment of limited visibility into the operating business, high levels of inaccuracy, volumes of unapplied cash, and high attrition for the chief accounting officer (CAO) office. Leveraging a software-as-a-service (SaaS) platform like BlackLine eases a lot of the pain from streamlining the complex web of people, processes, reporting, regulations, communication, and technology. Adding FourQ into the BlackLine product portfolio institutes BlackLine automation of end-to-end accounting for the CAO office. FourQ joining forces with BlackLine brings key client logos like Genpact and AIG to BlackLine’s 3,800+ customer base.

The Bottom Line: BlackLine’s FourQ acquisition can unlock new value for its clients by integrating complimenting capabilities to deliver an end-to-end solution for the CAO office

Typically, outsourcing, offshoring, and centralizing have comprised the go-to strategy for tackling intercompany operations, and now leaders are assessing automation, analytics, and other emerging technologies to propel a new wave of efficiency and performance. BlackLine’s acquisition of FourQ is perfectly timed for businesses struggling with intercompany operations and looking outside for platforms and partnerships bringing new approaches to the process.