Times are changing for the financial consolidation process and for finance teams in general, with…
Financial statement consolidation software can transform the finance function, replacing manual, repetitive tasks with the ability to achieve consolidated financial data at the click of a button. But despite the capabilities of such solutions, and efficiency being the name of the game in finance processes, many finance departments are still spending far too much time on the consolidation of financial statements.
With finance teams under pressure to move from being a guardian of the numbers to a strategic business advisor, the need to move away from manual spreadsheet-based consolidation has never been more pressing. In this blog we’ll explore why financial consolidation software is a worthwhile investment.
Consolidated financial statements show the aggregated financial position of a parent organization and all of its subsidiaries, including a balance sheet, income statement, and cash flow statement. The purpose of a consolidated financial statement is to formally recognize and report the position of the company as a whole.
At a high level, the consolidation of financial statements involves the calculation of group holdings, establishment of the value of assets across the group, calculation of goodwill arising on acquisition, adjustment for any intra-group activities, the calculation of balances to be carried forward on retained earnings and reserves, and the preparation of the consolidated financial statements, the statement of financial position, and the statement of comprehensive income.
This process is typically time-consuming in nature, requiring data from numerous sources in several entities to be collated, combined, checked, de-duplicated (eliminated), and presented in a standardized format. This becomes increasingly challenging when data formats vary from country to country thanks to local reporting conventions and systems. The result is a finance team tied up in mountains of spreadsheets and spending days trying to produce a single version of the truth, preventing them being able to spend time on more strategic activities.
A financial statement consolidation software platform unifies data sources from across the business, automating the financial consolidation process, managing intercompany eliminations, and enabling consolidated financial statements to be produced in real time with ease. Such solutions deliver significant time savings for finance teams as well as increasing the accuracy and reliability of data – take a look at this case study to learn how Coca-Cola European Partners is now enable to consolidate data from 48 plants and 85 warehouses with a single click.
The best financial consolidation software offers a range of financial consolidation tools that enable all consolidation activities to be conducted either automatically or with much greater ease than a traditional process. When conducting a financial consolidation software comparison, the key capabilities to look for include:
The automation of consolidation activities shouldn’t be your only consideration. Some financial consolidation solutions offer inbuilt reporting and planning capabilities, enabling the consolidated financial data to be examined in greater depth and used as the basis for plans and forecasts. This brings financial consolidation and the entire FP&A process into an Integrated Business Planning approach, enabling complete transparency across the various departments of the organization.
Board FC is a unified solution for financial consolidation and reporting, enabling you to automate time-consuming consolidation processes and produce management and regulatory reports with ease