When the National Association of Insurance Commissioners approved the Model Audit Rule in 2006—the industry's version of the Sarbanes-Oxley Act for non-public companies—it mandated internal control reviews. For the National Life Group, that meant improvement was needed in its manual processes for accounting review, according to Paul Brissette, director of corporate accounting for National Life.
"Prior to 2007, all of our account reconciliations were done on paper with approval signatures required on the paper copies," says Brissette.
Handling all that paper was a fulltime job for a member of the accounting team, gathering hundreds of accounts, tracking down the required signatures, making copies, and organizing everything into three-ring binders.
"Manual reconciliations were creating logistical problems, causing errors, and costing us valuable staff time," says Brissette. "We needed a solution to automate our account reconciliation process."
One solution that National Life liked was available only as an enterprise solution, which would have added another layer of resources from the IT department.
"That was an added hassle we didn't want," says Brissette.
After receiving a demonstration on the BlackLine solution, the National Life team, which included the senior vice president of finance and the corporate controller, was sold.
"The BlackLine consultant was extremely knowledgeable about the product and had a solid understanding of the importance of accurate and timely reconciliations," says Brissette.
One point that influenced National Life's decision was BlackLine's task management module, according to Brissette. Up to that point, the carrier kept track of quarterly financial statement tasks in Excel.
"Putting this list of tasks in BlackLine enabled us to make the list accessible to all users, while maintaining a central location from which to monitor deadlines, status, etc.," he says.
Some National Life employees were not receptive to the new system at first, according to Brissette.
"It added an extra round of reconciliations," he says. "At the time, we were not reconciling monthly. Since implementing BlackLine, we now enforce monthly reconciliation."
Within the first month of going online with the new system, Brissette reports 81 percent of National Life's accounts were reconciled. By June 2007, just three months after implementation, 96 percent of accounts were reconciled. By the end of 2007, the carrier reached its goal of 100 percent reconciled items.
Four years later, National Life looks at the account reconciliation process as being painless and reliable,
"After the first year, most users were viewing BlackLine as their normal tool for their monthly tasks, as well," says Brissette. "Internal and external auditors are pleasantly satisfied with this tool, as it gives them access to accounts with supporting documents at their fingertips, without having to wait for someone to physically deliver the reconciliation to them in paper form."
Brissette has been pleased with the responsiveness of the BlackLine team to any problems users might confront.
"At times, certain features were not always working as desired," he says. "The BlackLine team has always been intent on developing and improving the product based on our input. So for the most part, the product has traditionally worked well for our needs."
BlackLine is a Web-based solution, so technology demands were not an issue, according to Brissette. National Life is using the SaaS/OnDemand version, so Internet access is the only thing business users need.
"Currently we upload our account balances daily," says Brissette. "We set up a process that creates a separate upload file each time we are posting GL transactions. Twice a day, the file is imported automatically into BlackLine."
An additional improvement National Life is discussing for this year is to automate the upload by having BlackLine take the carrier's system-generated file from the site. This involves work with the carrier's security team as well as with BlackLine.
What made the implementation special was BlackLine's ability to respond to a deficiency in the carrier's account reconciliation process.
"We've completely automated previously manual, time-consuming, and labor-intensive processes," says Brissette. "BlackLine has virtually eliminated error-prone, spreadsheet-driven accounting processes."
The addition of workflow and e-mail reminders through the task management module and the ability to easily view documents attached by the preparer have improved and streamlined the carrier's accounts review process.
"We're now reconciling on a monthly basis, leading to a more efficient, timely, and accurate account reconciliation process at year-end," says Brissette. "Manpower savings can be seen by better utilization of our financial reporting staff."
Previously, a staff member was in charge of manually keeping binders current. Today, that employee can spend time helping review documentation supporting the account reconciliations.
"We have essentially saved at least the cost of one full-time accounting team employee, by being able to assign that person to other more strategic roles," says Brissette. "Not to mention the savings we've seen from eliminating costs associated with the heaps of paper and binders, mailing envelopes, shipping, postage, storage, etc. Now, all reconciliations and supporting documents are stored in a single online repository."
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