The Secret To Easy Financial Consolidation Reporting
Consolidations can be complex. Conjure up nightmares. And be scarier than dating Taylor Swift (you don’t want to end up as the headline in one of her songs).
But in the accounting world, financial consolidations is a necessary evil. By itself, “consolidation” simply means to put things together; to merge. But in the accounting arena, it is a well-defined process of combining financial data from several subsidiaries or business entities within an organization and rolling it up into a “parent” company for reporting purposes. And it’s more than just adding up numbers.
There are specific calculations and adjustments made as totals are consolidated from the subsidiary level to the parent company level. This can include foreign currency translations, eliminations of inter-company transactions and balances, along with adjusting journal entries. And there are different methods.
This can all be tricky and cause more than just a few headaches. Building consolidation reports can be time intensive and expensive. But these reports are critical.
One of the biggest pain points is finding a way to connect directly to multiple, oftentimes disparate, data sources. Many companies have some information in the cloud, some on a local server, some in Excel or different databases. Ideally, you want to be able to pull in all of this information with one tool.
What you shouldn’t be doing is manually building your consolidation reports. If you’re currently doing this, consider taking a few minutes, or hours, and start researching options that will save you time and money. Technology can help you.
There are tools out there which will make your life so much easier when it comes to complex tasks like this. And as you shop around for the best reporting solution to handle your consolidations, be sure to look for the following:
- The most important: It MUST allow you to connect to multiple data sources and/or chart of accounts, and bring in all of your data no matter where it is stored, including from spreadsheets.
- It shouldn’t be labor intensive or require you to define and/or map fields.
- You need to be able to create your own (virtual) consolidated chart of accounts.
- Must be automated & flexible. As in, it should generate & publish your reports automatically. As scheduled. And easily.
- Can handle eliminations, multiple currencies & conversions.
- Confirm implementation expenses. Watch out for any hidden costs of connecting to those multiple data sources.
- Make sure this tool can also handle all of your financial reporting needs.
Creating the reports you need – including when it comes to consolidations – doesn’t need to be rocket science. We have a tool, Synoptix, that can simplify all of your reporting needs and give you a clear picture of your overall business health. If your processes are making you question your sanity, don’t put this off any longer. It’s time to let technology do the heavy lifting for you. We’re just a click away.
Jeana has been in the software industry for 13+ years specializing in ERP reporting solutions. She has decades of experience in creative content development and marketing and enjoys exercising, traveling & spending time with her husband & twin boys.