By Stefan Farrugia on 2018-07-26
Groups of companies compile consolidated financial statements to give an overall picture of the health of a parent and subsidiary companies.
Consolidated reports draw on data gathered from these businesses to aggregate assets, liabilities, equity, income and cash flows. The data from the various entities is correlated and aggregated to present an overall picture of the financial status of a group of companies.
At the end of every financial year results are either published or, in the case of larger companies, a presentation is given at an annual general meeting for shareholders and the public.
Even though it may seem that this data magically appears out of nowhere, with a high-ranking company official presenting results, in reality there is a team of people in every group of companies that painstakingly crunches the numbers and compiles data to extrapolate something that a 'non-finance' audience can comprehend.
Consolidation Reports in Excel
Traditionally, the tool used for this function was a good old-fashioned Microsoft Excel sheet. Excel has stood the test of time, and still is one of the most functional tools out there for businesses. However, while Excel is still a fantastic tool, it is not intuitive or interactive, relying on the skill of users to input data correctly and to enter the correct formulas for tabulation and presentation purposes.
For the purpose of consolidation reports, Excel is labour-intensive and prone to errors. In fact, Microsoft has launched Dynamics 365 for businesses, which is a complete, automated package aimed at cutting out the manual labour cost of using traditional platforms, such as standalone Excel.
Faster Consolidation Reports
So, what is the answer? Business nowadays is driven by a plethora of cloud-apps that allows you to make informed decisions by consulting data-driven, real-time reports. Such software is used for workflow, deliveries, accounting, cash flow, and pretty much every business activity one can possibly imagine.
Most software can seamlessly plug into existing systems to allow for aggregated reporting. By linking such software, you can have real time reports compiled and delivered to your inbox once a month, weekly or even daily.
The best thing about using data-driven reporting of cloud-based apps is that they scrape the data for you and update existing figures, so that this does not have to be done manually.
Put simply, modern intuitive reporting programmes do the groundwork, so you don’t need to have a person crunching numbers and putting them into Excel. There are hundreds of programmes out there that can help you do this, but only a few will be a good fit for your business.
Human Input - Automated Reports
Excel will always be a handy tool for any business, no matter how large or small. However, to stay ahead of the game, businesses should really start to look at automated, data-driven reporting software where consolidation reports are drafted and compiled semi-automatically.