By Laura Jasenaite on 2017-11-27
CFOs today are often pressured to produce faster yet more complex consolidated reporting. The current business climate is creating great challenges in this regard, requiring businesses to change structures, and enter new markets more often. This keeps increasing the need for speed of consolidated reporting. We are posed with challenges in relation to human error and also technological flexibility, but the solutions are out there.
Consolidated reporting needs can vary largely from one organisation to the next, but the following 3 tips can help any organisation achieve faster intercompany consolidation:
1. Move your consolidated report away from Excel
When things get complex, move away from Excel. There is no limit to how much data Excel can process and the complexity of the formulas you can create.
However, there is a limit to how much Excel can process without crashing or becoming very slow. When working with a lot of sheets and data, Excel worksheets tend to break. These issues are difficult to discover and fix.
Further to that, Excel is also not a collaborative tool and tends to encourage financial executives to work in silos, which does not help the overall consolidation process.
2. Increase your automation for consolidated reports
It is a no-brainer, and yet so many companies shy away from this option. Automation will not only speed up the process but will allow more seamless consolidation between an ever-increasing number of stakeholders. It will also reduce human error and ensure compliance.
In an environment that needs to take into consideration multi-currency, different ownership structures and local compliance for a number of connected companies, automation is the best way forward.
Nowadays technology has evolved, and many companies don’t even need to switch the various accounting packages to automate their consolidation. It is possible to retain the same processes at branch/subsidiary level and still consolidate automatically.
What’s more, the fact that you can retain the same software at the subsidiary level will enable you to involve more people in the process, which results in more accurate and faster reporting.
3. Create schedule for consolidated reporting
As the CFO involves more people in the process, it becomes more important to have consistent close schedules. You will need to have a shared monthly calendar with everyone’s deadlines in it. The most important milestones such as the financial year end for each entity involved should be kept in mind when drawing the schedule.
The calendar schedule should give you an overall view of when all the data will be available. It’s important to be strict when outlining the requirements to your counterparts and presenting the deadlines.
Following these 3 tips will set you up for improving the speed and accuracy of your intercompany consolidation.