What is consolidation software?
Consolidation software automates and simplifies the process of creating consolidated financial statements.
For large and global organizations, consolidation software imports financial data from across the entire organization. Consolidation software also maps general ledgers to a single chart of accounts and normalizes consolidated data according to regulatory rules and requirements.
Why is consolidation software important?
Consolidation software is essential for larger complex companies.
Excel-based spreadsheets do not facilitate the collaboration large companies need to consolidate vast amounts of data.
Consolidation software connects disparate parts of an organization.
Best-in-class consolidation software enables companies with complex ownership structures to define legal entities and reporting units, and determine hierarchies.
Consolidation software ensures an apples-to-apples view of consolidated data.
Consolidation software makes it easier for organizations with complex, global organizational structures to manage multiple currencies, mergers and acquisitions, and accounting standards like IFRS and GAAP and roll data up to the group level.
What capabilities should consolidation software give you?
Consolidation software should give you the ability to:
- perform intercompany matching and eliminations
- define control groups between main accounts
- define legal entities
- convert currencies and interest rates
- manage legal structures
- automatically generate reports
How to use consolidation software?
Consolidation software is most effective when organizations deploy it as a part of a greater corporate disclosure management system. This way, consolidated data is connected to other financial processes. When consolidation, budgeting, planning, modeling, and reporting connect to a single data set, all members of the organization can be sure they’re reporting and strategizing using the most accurate information available to them.
How to improve consolidation:
- Ensure the consolidation software you have uses financial intelligence so you can automate calculations, retain and original convert currency information and interest rates.
- Perform all intercompany eliminations in a single, automated cockpit.
- Get the ability to perform multiple consolidations simultaneously.
- Connect consolidation to all other financial processes, like close, reporting, planning, budgeting and forecasting.
- Make sure the consolidation solution you use can be easily configured to match your unique consolidation structure, without custom scripting or heavy IT requirements.