Taming the Core Challenges is Vital
The process of completing a financial consolidation is a recurring event that is often met with frustration, very long days, and mental exhaustion by those who are accountable for its successful execution. Many organizations still leverage manual processes and tools that were developed over a decade ago, or worse, have failed to find suitable solutions to reduce the friction in the consolidation process and still leverage piles of data in error-prone spreadsheets.
Unfortunately, financial consolidation is not an exact science and contains differences in implementation across global reporting jurisdictions. Speaking from my experience, I was able to appreciate the complexities of the process after being embedded as a consultant to the consolidation team. It’s what truly made me respect the patience and attention to detail that is required for completing a financial consolidation.
As financial consolidation is such a broad topic, it is not possible to create a neat checklist of product requirements because it literally would be a never ending piece of string. There is no solution that can meet every single requirement. Those that claim to be able to often require extensive customizations involving additional programming or long consulting engagements. The best alternative is to find a solution that resolves your key pain points today while being flexible enough to expand with your organization over time, as needed.
At Prophix, our CPM software solution has been solving the financial consolidation challenges of global customers of varying sizes since 2008 focusing on the most commonly reported pain points:
- Data collection from subsidiaries with multiple charts of accounts account and/or multiple calendars with mapping capabilities
- Currency translation using multiple rates and keeping track of resulting cumulative translation adjustments across multiple accounts, entities, and time periods
- Keeping track of detailed adjustments to consolidated data through journals
- Managing partial ownership and minority interest calculations
- Automating intercompany eliminations
Prophix provides a solution with an application that has been crafted for ownership by financial consolidation teams. The recent update to Prophix software enhances the user experience for financial consolidation even further by providing more user configurable options to boost cumulative translation adjustment visibility, manage different accounting rules, and handle multiple ownerships.
Although taming the core challenges is vital, resolving these issues alone does not guarantee a successful consolidation process. Equally important is the ability to take the results of the financial consolidation to create actionable management reports without the complex manual intervention of exchange of data between multiple applications. As a result, when seeking solutions to streamline financial consolidation, always evaluate your requirements within the context of your organization’s overall processes, and not just focus on the technical of financial consolidation. Performing a holistic review of overall processes will help ensure the solution you implement drives the desired user experience and returns to your organization.