Future-ready accounting: Lexmark F&A grows more agile and streamlined with BlackLine and SAP

⇨ Lexmark transformed its finance and accounting processes by implementing BlackLine solutions, which streamlined journal entry workflows, enhanced accuracy, and created efficiencies in global operations.

⇨ The integration of BlackLine with SAP allowed Lexmark to automate reconciliations, standardize processes, and improve collaboration, paving the way for a smoother transition to SAP S/4HANA.

⇨ By focusing on continuous improvement and leveraging technology, Lexmark is set to enhance its financial operations further, exploring new solutions such as BlackLine's Financial Reporting Analytics for better insights and analysis.

The world of finance and accounting unsurprisingly has always been a numbers game. While the subject matter is indeed dominated by numbers, today’s F&A teams must focus on a broader kind of value, a level of which can be found in proper system integration and global processes

Leaders at Lexmark, a global imaging and IoT solutions leader, recognized a need to change the company’s F&A processes to further grow and develop. They required global, connected processes, consolidated in a single platform as the business has back-office operations in various time zones. In 2012, Lexmark completed a significant milestone in the journey: A single instance of SAP was implemented, processes were streamlined, and efficiencies were gained. However, the company refused to rest on its laurels.

To ensure its systems and processes were future-ready, Lexmark continued its transformation efforts. F&A leaders knew that an upgrade to SAP S/4HANA was an important part of the organization’s digital transformation journey but needed to make immediate and sustained progress with its own processes.  To do so, Lexmark partnered with BlackLine and implemented its reconciliations, task management, and journal entry capabilities to ensure data accuracy, free up time, and eventually streamline the move to SAP S/4HANA.

“We were looking for something that integrated well with SAP,” explained Tracy Starnes, Director of FP&A at Lexmark. “Our home-grown account reconciliation tool was outdated and couldn’t handle our structure or reporting needs. We wanted new, state-of-the-art technology to support our global operations with enhanced approval flow and, of course, automation. We wanted to be more future-ready and more agile.”

Identifying the best solution

BlackLine’s experience and leading practices in the record-to-report space, combined with its Solution Extension relationship with SAP, drew Lexmark to engage. At the time, the SAP portal Lexmark used for journal entries was on the verge of no longer being supported.

The journal entry overhaul

Lexmark was looking for a solution to do more than just manage journal entry workflows. Leaders saw an opportunity to automate entries, reduce audit challenges, and standardize even further. The choice to adopting BlackLine’s end-to-end solution was easy. Lexmark deployed the solution to centralize the creation, preparation, posting, and approval of all global journal entries.

Results were delivered quickly. Lexmark reduced the number of people needed to create and post journal entries, allowing finance and accounting teams to spend more time on higher value activities like analysis.

A cloud solution that allows team members to collaborate across different time zones gave Lexmark round-the-clock coverage of its journal entry process. This meant journal entry postings had a trust foundation of accuracy and control, but processes were more efficient and there was less waiting for the numbers at the end of each month. BlackLine also provided superior visibility and reporting on pending items.

The benefits of BlackLine’s Journal Entry solution included standardizing manual entries, streamlining and accelerating journal approvals, utilizing existing SAP validations, enabling real-time analysis and monitoring of posting status, centralizing supporting documentation in the cloud, and full visibility at both a local and global level. Optimizing the journal entry process made the transition to S/4HANA less complex – while changes were made to the company’s ERP, BlackLine provided a consistent, auditable, and trustworthy hub for Lexmark’s journal entry process.

Reconciliation and task management solutions

Alongside reworking Lexmark’s journal entry processes, BlackLine also helped streamline account reconciliations and record-to-report tasks. Before BlackLine, Lexmark’s account reconciliation process involved high volumes of data from different sources. Accounting teams spent time aggregating and manipulating information, and every account was treated equally—regardless of risk.

BlackLine’s Account Reconciliation capabilities allow for monthly, quarterly, semi-annual, or annual reconciliation based on risk ratings. Furthermore, with the integration to SAP, subledger reconciliations could be auto approved.  This meant team members would no longer have to spend time substantiating each account monthly, freeing up much-needed time for more important tasks, like resolving unreconciled balances that were easier to identity and monitor.

BlackLine’s Task Management solution allowed Lexmark to orchestrate and coordinate its monthly and quarterly close and reporting processes globally. Users and approvers gained visibility and accountability for their work, and activities that were previously managed across several offices and regions before being sent to the corporate office were centralized. The close was more collaborative and efficient, and supporting documentation could be stored in the cloud rather than on shared drives.

These initial system upgrades and process overhauls made the transition to S/4HANA successful and smooth. By cutting back on time-wasting exercises and recognizing where efficiencies could be made, BlackLine helped Lexmark become future-ready in its financial operations.

Paving the way for S/4HANA

The BlackLine implementation was transformative, with revenue optimized and expenses reduced. Lexmark’s reconciliations were now more automated, journal entries had been improved, and full visibility over the F&A close process was now available.

“The biggest benefit I saw with BlackLine Journal Entry was using the SAP web services connector, which is real-time integration between BlackLine and SAP,” said Starnes. “This allows us to use the validations that are already set up in SAP. For example, does an account require a profit center or a cost center? Is it a revenue account or a cost account? I don’t have to do added validations on top of what I already have set up in the SAP master data.”

When prepping the business for the upgrade to S/4HANA, the presence of BlackLine provided quick wins ahead of the migration and freed resources to focus on the upgrade. Rather than replacing one solution with another, BlackLine’s solutions worked complementary to the tech upgrades that S/4HANA would bring. If the initial BlackLine process overhaul had not been completed, implementing S/4HANA would likely have been longer and more complex.

The S/4HANA upgrade was intended to leverage the new data streams to deliver real-time financial reports, enhance the user experience, and reduce data storage while improving performance. BlackLine’s complementary framework with SAP functionality meant the additional controls that S/4 brought worked seamlessly with BlackLine’s functions.

Lexmark leaders recognized the ways in which BlackLine solutions and S/4HANA could work well together to create something powerful, knowing the result would enhance end-to-end process management.

Lexmark’s future with BlackLine and SAP

Lexmark, which has always had a culture of continuous improvement, keeps its gaze firmly set into the future. F&A leaders see an opportunity to potentially modernize the balance sheet and P&L reviews. They are exploring BlackLine’s Financial Reporting Analytics solution to centralize the process and provide drill-down capabilities, along with analysis and explanations in one location.

On Lexmark’s path to modernization, the realization that new technology was needed was greeted with enthusiasm.

Satisfied with the achievements in the past few years, Starnes said, “both SAP and BlackLine have benefitted Lexmark and our journey to more future-ready financial operations. I look forward to seeing what the future holds.”