Financial consolidation is the process of combining financial data from several departments or business entities within an organisation and rolling it up to a parent company, usually for reporting purposes.
This process can be a daunting and time-consuming task, especially for large organisations with multiple subsidiaries.
However, there are ways to simplify the financial consolidation process and make it more efficient.
Let’s get into it:
1. Use a centralised data repository
One way to simplify the financial consolidation process is to use a centralised data repository. This will enable you to easily and quickly consolidate financial data from multiple sources into one place. This will save you time and energy in the long run, as you won’t have to manually consolidate data from various departments or business entities.
2. Automate the process
Another way to simplify the financial consolidation process is to automate it. There are various software solutions that can help you automate the process of consolidating financial data.
SunSystems, for example, is a powerful financial management system with built-in functionality for easily consolidating data from multiple entities.
3. Use pre-built consolidation templates
Using pre-built consolidation templates, you’d be able to quickly and easily consolidate data from multiple sources into one place.
4. Introduce consistent standards across all reporting and data entry
All of the data you gather at all levels of your business is important when it comes to consolidation. To make your consolidation process easier, aim for consistency in standards across all reporting and data entry within your organisation.
For instance, using a system that has a chart of accounts will not only streamline how you record data but will also help you to avoid errors and discrepancies.
5. Use software that supports multiple languages and currencies
When consolidating financial data from multiple entities, it is important to use software that supports multiple languages and currencies, especially if you have subsidiaries in different countries.
6. Streamline the intercompany eliminations process
Intercompany elimination is the process of removing transactions between subsidiaries from the consolidated financial statements. This is important in order to produce accurate and meaningful consolidated financial statements.
Making this process easier will go a long way in simplifying your financial consolidation process.
7. Focus on fast close and reporting cycles for optimum performance
The goal of financial consolidation is to produce accurate and timely consolidated financial statements. In order to achieve this, it is important to focus on fast close and reporting cycles.
8. Use software that offers real-time visibility into the financial data
Using software that offers real-time visibility into the financial data will enable you to make informed decisions and take timely action. This is important in order to avoid any last-minute surprises or errors.
9. Implement a robust internal controls framework
A robust internal controls framework will help you to ensure the accuracy and completeness of your financial data. This is important in order to produce reliable consolidated financial statements.
Conclusion
Simplifying your financial consolidation process will save you time and energy in the long run. By using a centralised data repository, automating the process, and using pre-built consolidation templates, you’d be able to quickly and easily consolidate data from multiple sources into one place.
Additionally, introducing consistent standards across all reporting and data entry, using software that supports multiple languages and currencies, and streamlining the intercompany eliminations process will go a long way in simplifying your financial consolidation process.
Finally, focusing on fast close and reporting cycles, using software that offers real-time visibility into the financial data, and implementing a robust internal controls framework will help you to produce accurate and timely consolidated financial statements.
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