We have created a comprehensive cloud-based software platform designed to transform
and modernize accounting and finance operations for organizations of all types
and sizes. Our secure, scalable platform supports critical accounting processes
such as the financial close, account reconciliations, intercompany accounting,
and controls assurance. By introducing software to automate these processes
and to enable them to function continuously, we empower our customers to improve
the integrity of their financial reporting, increase efficiency in their accounting
and finance processes and enhance real-time visibility into their results and
operations.
Critical accounting and finance processes underlie the integrity of an organization’s
financial reports. The lack of effective accounting and finance tools can result
in inefficient and cumbersome processes and, in some cases, accounting errors,
restatements and write-offs, as well as material weaknesses and significant
deficiencies. Traditional enterprise resource planning, or ERP, systems do not
generally provide effective solutions for processes handled outside of an organization’s
general ledger, such as balance sheet account reconciliation, intercompany transaction
accounting and the broader financial close process. Many organizations also
use multiple ERPs and other financial systems without a platform to efficiently
integrate them. As a result, to manage these tasks, organizations rely on spreadsheets
and other error-prone and labor-intensive processes that are unsuited for the
increasing regulatory complexity and transaction volumes encountered by many
modern businesses. We believe that we are creating a new category of powerful
cloud-based software that is capable of automating and streamlining accounting
and finance operations, in a manner that complements and supports traditional
ERP systems. We believe our customers benefit from cost savings through improvements
in process management and staff productivity, in addition to managing a faster
financial close.
Our mission is to transform how accounting and finance departments operate.
Our approach modernizes what historically has been done through batch processing
and manual controls typically applied only during the month, quarter or year-end
financial close, and delivers dynamic workflows embedded within a real-time,
highly automated framework, a process we refer to as “continuous accounting.”
It also enables up-to-date analytics, provides industry-benchmarked metrics
and is designed to help customers run more efficiently while achieving greater
accuracy, control and transparency. We believe the need for our software has
been driven by growing business and information technology complexities, transaction
volumes and expanding regulatory requirements. Our software integrates with,
and obtains data from, more than 30 different ERP systems, including NetSuite,
Oracle, SAP, and Workday, as well as many other financial systems and applications
such as bank accounts, sub-ledgers and in-house databases.
We believe that we have a leading position in the enhanced financial controls
and automation market because we were one of the first companies to bring software
with this functionality to market and we have a limited number of competitors.
The 2017 Gartner Report, “Magic Quadrant for Cloud Financial Corporate
Performance Management Solutions,” or the “Gartner Report,”
identified us as a Leader in the Magic Quadrant for Cloud Financial Corporate
Performance Management Solutions for our completeness of vision and ability
to execute.
We are a holding company and conduct our operations through our wholly-owned
subsidiary, BlackLine Systems, Inc. (“BlackLine Systems”). BlackLine
Systems funded its business with investments from our founder and cash flows
from operations until September 3, 2013, we acquired BlackLine Systems, and
Silver Lake Sumeru and Iconiq acquired a controlling interest in us, which we
refer to as the “2013 Acquisition” The 2013 Acquisition was accounted
for as a business combination under GAAP, and resulted in a change in accounting
basis as of the date of the 2013 Acquisition.
Our platform consists of eight core cloud-based products, including Transaction
Matching, Account Reconciliations, Consolidation Integrity Manager, Daily Reconciliations,
Journal Entry, Variance Analysis, Task Management, and Insights. Customers typically
purchase these products in packages that we refer to as solutions, but they
have the option to purchase these products individually. Current solutions include
Balance Sheet Integrity, Close Process Management, Accounting Process Automation,
Finance Transformation, Intercompany Hub, and Smart Close.
We sell our solutions primarily through our direct sales force, which leverages
our relationships with technology vendors, professional services firms and business
process outsourcers. In particular, we have a strategic relationship with SAP.
Our solutions are SAP endorsed business solutions that integrate with SAP’s
ERP solutions.
We target our sales and marketing efforts at both enterprise and mid-market
businesses. We define the enterprise market as companies with greater than $500
million in annual revenue, and we define mid-market as companies with between
$50 and $500 million in annual revenue. For the year ended December 31, 2017,
sales to enterprise and mid-market customers represented 84% and 16% of our
revenues, respectively. Additionally, we target our efforts at both new customers
and existing customers. Existing customers may renew their subscriptions and
broaden the deployment of our platform across their organizations by increasing
the number of users accessing our platform or by adding additional products.
Accounting is a Universal Mission-Critical Function
Organizations need reliable financial information to plan and execute business
initiatives, measure operational progress and satisfy regulatory and financial
obligations. For each period-end, enterprise accounting functions typically
record, process, reconcile, consolidate, and report financial transactions that
are consolidated into useable financial information. These activities typically
support other core business functions such as payroll, treasury, procure-to-pay,
and order-to-cash processes. Traditionally, many accounting processes, such
as balance sheet account reconciliation, intercompany transaction accounting
and the broader financial close calendar, are managed and tracked with spreadsheets
that are manually reconciled on a periodic basis, and which are often labor-intensive,
inefficient and error-prone. The risks of employing traditional methods include
lapses in regulatory compliance, damage to brand and public image, and negative
impacts on financial health and transparency.
Modern Business is Increasingly Complex
Organizations of all sizes are operating in an increasingly global, complex
and fast-moving business environment that presents significant challenges to
the performance of the accounting and finance functions. Accountants must process
and verify transactions that occur both within and across international borders,
involve multiple currencies and require compliance with varying legal, regulatory
and tax frameworks. This transactional complexity is exacerbated by other factors
typical of global business, such as distance, language barriers and differing
time zones. In addition, modern enterprises generate massive amounts of transaction
data. It is common for organizations to have thousands of different accounts—potentially
comprising billions of records—and to use numerous different financial
and operational systems to store that data. Furthermore, companies employ increasingly
sophisticated corporate structures that often require accountants to reconcile
accounts across various business units and geographies. We believe that the
complexity of modern corporate structures and transactions, combined with mounting
transaction volumes and a fragmented information technology landscape, creates
a significant need for increased automation, efficiency and visibility in accounting
and finance.
70.5 %