The discomfort of his sweaty cotton T-shirts and the drive to solve this problem launched former University of Maryland football player Kevin Plank into entrepreneurship back in 1996. Since that time, Under Armour has been outfitting collegiate and professional athletes, enjoying endorsements from dozens of celebrities, and gracing the Hollywood screen in films. By the late 1990s, the company had already become a household name around the world, was well on its way to becoming a multi-billion-dollar business, and had risen to be a leader in the performance apparel and footwear markets.

Today, Under Armour continues to push its own boundaries by establishing itself in new markets, such as wearable fitness and connected fitness technologies, and over the last several years has celebrated consistent 20% or more revenue growth. In the third quarter of 2015, the company realized higher profits and a 28% jump to $1.2 billion in quarterly revenue, thanks in part to its sales surging to $196 million in the footwear market. This also marked Under Armour’s first billion-dollar quarter in the company’s history.

Despite all the milestones, accomplishments, and growth to date, to the industrious teams at Under Armour, things are just getting started: The company is currently on an aggressive growth path both within North America as well as globally. “Some of Under Armour’s key growth strategies include the footwear, direct-to-consumer, and international businesses,” says Molly E. Boyle, CPA, Senior Manager of Corporate Accounting at Under Armour, and the business is also continuing to push the key growth drivers of men’s apparel and women’s apparel.

During this expansion, which most recently included three acquisitions of mobile app businesses, the company realized its manual financial processes — for reconciling balance sheet accounts at the close of each month as well as approving and evidencing journal entries — were no longer sustainable. In short, it needed a more scalable, real-time approach that could be easily duplicated among offices in North America and across the globe.

After a brief solution evaluation period in early 2012, Under Armour chose a cloud-based accounting solution from BlackLine that integrates with its SAP ERP system. A longtime SAP customer, the company has run SAP ERP since the early 2000s. The decision to implement the cloud-based platform was based on the ability of BlackLine’s Account Reconciliations product to solve its most pressing problem. “While the solution has some great added functionalities we are taking advantage of now, an account reconciliations application was our most immediate need at the time — and BlackLine solved that for us,” Boyle says.

Manual Processes to Real Time

For the third quarter ending September 30, 2015, about 800 individual account reconciliations were completed across the globe. Previously, these reconciliations were stored and evidenced using three-ring binders that were physically passed between employees for various reviews and approvals — everything was printed out on paper. The binders were created at Under Armour’s corporate headquarters in Baltimore, in offices in Europe, and also in retail buildings. “These binders could be hard to track down,” says Michael Williams, Senior Corporate Accountant at Under Armour, and there was a significant amount of duplication and wasted paper during the process of reprinting, creating backups, and providing support.

As reconciliations were completed, there was no easy way to update leadership on the status. The process involved flipping through the binders or looking at a sign-off matrix to see what was missing and then chasing people down for sign-offs. “Not having that kind of push-button reporting or visibility into our overall status put us at risk from a controls perspective,” says Boyle. “It is critical to ensure all of the account balances have been reviewed by the proper people before we report our results and publish our financial statements.”

 

BlackLine’s cloud-based solution replaced the binders with push-button status reporting that allows multiple people to work on the same collective effort simultaneously. “Now, we can complete our end-to-end reconciliations process several business days earlier than before,” says Boyle. “And we can easily and efficiently follow up on open or incomplete items.”

According to Williams, one of the team’s biggest requirements was a process to identify new general ledger (GL) balances and analyze the risks associated with existing accounts. Replacing the manual process of trial balance checking, the BlackLine solution now automatically flags new GL accounts as they pop up and subsequently assigns the right person.

“We wanted an easy way to validate the consistency of our review and approval policy,” adds Boyle. “BlackLine gives us the ability to assign a risk rating to each of our accounts, and then to check against that risk, rating the frequency and level of review necessary based on our policies — so the people who lead our organization are only looking at the information they need.”

Once the Account Reconciliations product was live in December 2012, Boyle and her team launched other products in the BlackLine platform, such as Task Management, midway through 2013, and significantly expanded the extent to which the team uses both the task and reconciliations products. Finally, the Journal Entry product, which went live in July 2014, added significant automation to that process.

Whether it’s a two-line, recurring, straightforward journal entry or one that’s thousands of lines, each entry requires the approval of at least one manager. Prior to implementing BlackLine, the process for ensuring that every journal entry booked is properly approved was almost entirely manual. BlackLine has created a systematic scalable workflow that requires significantly less effort.

 

BlackLine’s application eliminated the need for mounds of paper to support manual journal-entry logs: A file goes from SAP ERP to BlackLine every 30 minutes with all the journal entries booked, and everything lives in BlackLine’s unified finance controls and automation platform. There is also push-button reporting indicating the status of each journal, and all of the supporting documentation is electronic.

Boyle’s team is now spending more time analyzing balances, asking questions, reviewing results, and ensuring the relevance and accuracy of the data, as opposed to motioning through administrative tasks like copying paperwork, compiling binders, and emailing files. “We get a lot more value out of the time that our staff and seniors are spending during and after we close the books,” she says. “And from a scalability perspective, BlackLine has given the corporate headquarters the visibility we need as we expand globally and stand up offices with small accounting teams across the globe. BlackLine is the easiest and most user-friendly way for us to get a pulse on what the activity is in those entities, and it’s a much more efficient way for us to review results.”

From an auditing standpoint, which was also a manual process both internally and externally, these three products have saved a lot of time and effort. “Auditors can access [journals, reconciliations, and key controls] in read-only mode using the auditor function in BlackLine,” says Boyle. “This protects us in the sense that the auditors are not able to see anything until it’s been through all levels of review internally, and this has certainly saved days of time between us and our auditors in gathering and providing data for them to test. It has completely revolutionized how we interact with our auditors, and we are spending our time a lot more efficiently and effectively as it relates to the integrated audit and the quarterly review.”

Game Plan to Execution

The process of looking for a solution started in early 2012, and the platform was up and running for reconciliations by the end of that year. “It went very smoothly,” Williams says. “The biggest challenge we faced was developing an extraction tool from SAP ERP. Our IT team created a couple new transaction codes that would send a nightly extract out of SAP ERP with all of our GL balances into the cloud, and then BlackLine would grab those balances.” Now BlackLine has eliminated that issue of extraction with BlackLine’s SAP connector.

Under Armour worked with BlackLine to determine what data needed to go in, what it should look like, and then how to get that data out of SAP ERP. “Our approach was to make sure we did too much rather than too little,” says Williams. “We gave a solid amount of information from SAP ERP to BlackLine, and it was all there for us to use.”

With the user base continuing to grow throughout the implementation (today there are close to 100 users responsible for journal entries, tasks, and account reconciliations), a friendly user experience was critical. “We’ve been very successful there, as it’s been extremely easy to onboard new users and have minimal questions come back to us,” explains Boyle.

Each product implementation took less than 10 weeks, Williams notes, with reconciliations the shortest and journals the longest due to their complexity. “But a lot of that time was us gathering information and making decisions internally on which direction we wanted to go with the solution,” adds Boyle.

“We took some time after our initial reconciliations implementation to figure out where we could best leverage tasks, and ultimately, we decided we could use help with documentation and approval workflow in the Sarbanes-Oxley (SOX) controls area,” says Boyle. “Today, we use almost 170 individual tasks, which represent our key controls across the organization.”

The flexibility of the Task Management application allowed Under Armour to perform the implementation internally using existing templates from the reconciliations implementation, so there was almost no consulting time on the BlackLine side to get going with tasks.

“BlackLine did a great job of leading us and providing insights on best practices and where we should be going,” says Williams.

More Growth in the Playbook

In step with Under Armour’s mission of relentlessly pursuing innovation, over the last two years the company has acquired several new mobile app businesses and aptly named this market “Connected Fitness.” For Boyle, these businesses — MapMyFitness (acquired in December 2013), MyFitnessPal and Endomondo (brought on in the first quarter of 2015), and Under Armour’s own app, UA Record — represent not only a new reportable segment, but also three new company codes that operate on completely different non-SAP ERP systems and need to be incorporated into the company’s monthly close process. Using BlackLine, the company has been able to gain visibility into account balances and important information regarding the newly acquired entities.

“BlackLine has been really useful in terms of gaining quick visibility into the ending balances in each of the accounts, giving our leadership a chance to review transactional details and key account balances without having full integration of those other ERP systems,” says Boyle. “That will continue to evolve as we go forward.”