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Multi-Company Consolidation: Ensuring efficiency, accuracy and timeliness.

In the absence of more modestly priced software solutions (most of the offerings in this area are very expensive indeed), most monthly multi-company accounts consolidation is still conducted using off-line (i.e. outside the accounts application system itself) Excel spreadsheets, which is both time consuming, can be highly prone to error, and inevitably results in excessive delay.  Indeed, many of these spreadsheet consolidation procedures do not even handle the process correctly and merely “amalgamate” accounts as opposed to conducting “true consolidation”.  Using Excel also limits the ability to report and analyse the consolidated accounts in a consistent manner with little or no investigative or interrogative facilities, since the spreadsheet results are “external” to the original application.

No matter what size company you are, if you have more than one entity then you will likely be required /wish to report /analyse consolidated accounts. The various requirements for consolidated reporting are set out in IFRS10 and IAS 27 and it’s not our intention get into a technical discussion of these here. However, more information can be found at

There are many key aspects to consolidating Company accounts;  One is that they must take into account partial ownership, i.e. an ability to handle not just the minority holding, but also dates of purchase/sale or change of ownership.  In addition to minority interests, you may also have a subsidiary entity which is itself a Group Company with its own group of subsidiaries, some of whom, again may be partially owned.  This calls for multi-tier consolidations.  And then, to complicate matters even further, what about consolidating at the Company sub-structure level?  By this I refer to the instance where the Companies have Divisions, or Branches, or Departments within each Company and which you want to see these results consolidated at the Group Company level.

And to top it all, you may well have multi-currency trading whereby any single entity may operate in numerous currencies and have multiple bank accounts in different currencies.  In addition, some of these subsidiaries may well have a base currency that differs from that of the holding company. This creates further complication in revaluing P&L accounts using ‘average period rates’ and Balance Sheet accounts using ‘period end rates’, and further ensuring every subsidiary is using common (centrally imposed) daily exchange rates throughout the period.

By now your spreadsheet is bursting at the seams and becoming an unmanageable nightmare – and even if you can manage the complexity, it’s now very likely that it will be highly error prone, since the Excel formulae will have very little by way of checks and balances to ensure compliance back to all the original consolidation entities. Never mind the time consumed extracting the relevant information from the completed month end accounts and the consequent inefficiencies involved. However, if you have managed to complete the month/period end accounts (accurately) then all you need to do is close the month/period and produce the management reports, right?  Ah, but what about those pesky last minute postings, adjustments and accruals?  All of which require yet require another re-run.  You know the drill, you’ve been through it many times before!   And then there’s the inevitable structural changes to be made every few months because of the Group’s growth and expansion.

The good news is that a modestly priced solution which incorporates all of the foregoing features does exist within a comprehensive suite of Accountancy Applications specifically designed for medium sized enterprises such as yours (which is why I assume you’re reading this article in the first place).  Using the accountsIQ consolidation engine alongside its fully featured set of accounting applications ensures that the periodic consolidation process is simple, straightforward and accurate.  In summary;

It also consolidates Budgets and Revised Budgets up to the Group level (and to any “Parent” Companies in a multi-tiered consolidation).   You can produce reports using budgets, revised budgets, actuals and variances rolled up from subsidiary level with drill down capabilities.  There is also the ability to consolidate Sales and Purchasing data and report at group level, again with the ability to drill down to subsidiary level.  In addition, you can post inter-company transactions within the group, or adjustments at group level to eliminate inter-company profits. Doesn’t that sound better than Excel? Make life in 2016 easier for yourself and your finance team, and get the accounts accurate – your accounts are the life blood of your business.

Summary of accountsIQ Consolidation software:

Consolidation of Multiple Subsidiaries (Incl. Sub Groups):

  • Engineered to manage the consolidation of a large number of subsidiaries’ datasets with ease. Also handles sub-groups where the consolidated entity itself becomes a subsidiary of a large group consolidation. Ideal for complex corporate structures.
  • Manage Complex Ownership Arrangements:
  • Consolidation automatically recognise Minority Interests liability if the ownership interest is greater than 50% but less than 100% and creates the relevant postings in the consolidation entity.
  • Handle Foreign Currency Consolidations with ease:
  • Subsidiaries can operate in their own base currency and results are translated into the base currency of the consolidation entity, based on stored exchange rates for each reporting period. P&L accounts are correctly translated using average period rates and Balance Sheet accounts at period end rates.
  • Centrally Control Exchange Rates: No need to waste time maintaining average and period end exchange rates in multiple subsidiaries. Central Currency Management enables you to maintain rates in one central table.  The updates automatically propagate to all related subsidiaries using triangulation of the group stored rates.
  • Report on actuals vs Budgets by BI Analysis structure at Group Level:
  • Budgets, revised budgets, actuals and variances are rolled up from subsidiary companies making it easier to view overall performance and trends across the group at any time, including BI Analysis coding as well as GL Chart of Accounts enabling group level BI reporting.
  • Simplify the posting of Inter-company Charges:
  • Raise inter-company Sales Invoices that automatically create Purchase Invoices in the receiving company. Purchase invoices remain “unposted” until approved and coded in the receiving company. Ensures that inter-company accounts remain balanced for elimination at group level, even if balances are in different currencies.
  • Month End Currency Revaluations:
  • Provide your team with the tools to simplify the revaluation of foreign currency bank, debtor and creditor accounts at subsidiary level based on centrally maintained exchange rates. Unrealised gains (losses) are automatically posted and base currency value of assets and liabilities adjusted prior to consolidation, facilitating elimination of intercompany balances at group level.
  • Group Sales & Purchase Analysis:
  • Consolidated Sales & Purchase Analysis to allow group-wide reporting and benchmarking where common products/services involved.
  • Post Consolidation Adjustments:Make adjustments at group level to eliminate inter-company profits etc. at group level without affecting the subsidiary figures.
  • accountsIQ is a SaaS Cloud based accountancy system for Group companies with consolidation, multi-currency accounting and enhanced business analytics requirements. The scalable solution enables the system to be used by any group company, from the smallest to the largest. The system is currently used by 15,000 users in 42 countries, with 33 different currencies in use in 25 tax jurisdictions. For more information please email or visit this page.Pages of interest:




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