Preparation of the final consolidated financial statements is a task that cannot be compromised. It is a recurring and necessary task that must be completed while complying with many accounting principles to be legally correct and informative. For companies with multiple subsidiaries and associated companies, and perhaps even complex ownership structures, the task is not simple and can quickly become a time-consuming manual exercise. When keeping track of internal transactions, minority interests in the group, and especially the effect of changing exchange rates, then it is easy to lose track and traceability of data.

Challenges often begin when collecting trial balances from subsidiary companies, where different source systems can make the task highly manual. The format in which data is provided may vary, and the data content may be more or less synchronized with group standards, such as the chart of accounts.

After the initial validations of input, there is often a task of ensuring that there is consistency between all parties involved in the calculation of internal purchases and sales - a reconciliation and coordinating role that often falls to the controller who must complete the financial statements. For all activities in the process, the lack of system support and challenges with data discipline makes it difficult to maintain an overview and create transparency between input and output. As a deadline approaches, time is limited, and the process is simultaneously handled manually, the risk of errors increases. And errors are not a viable option in external financial reporting.

Make financial consolidation automatic

There are several areas where the manual process can be streamlined and the quality can be improved. By letting data inputs (trial balances) meet in a common solution, it is possible to gradually or completely automate data capture, and in this process, there are many opportunities to perform data validation and, not least, archiving multiple consolidation runs in the same period. The consolidation task itself can be managed through dedicated solutions where all stakeholders can analyze and reconcile each step in the consolidation towards the final result. Finally, the right solution can ensure that historical financial statements remain archived and readily available for analysis of the company's development over time.

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