Demo Video: Anaplan for Financial Consolidation

With Anaplan, you can speed up intercompany financial reconciliations and period end – with a single platform that connects across your budgeting, planning, and forecasting process, all while complying with IFRS and GAAP standards.

To find out how Anaplan can help, contact us for a personalised demo.

Transcript

Welcome to another Bedford Consulting spotlight video focusing on financial consolidation in Anaplan. This video will give an overview of our pre-built statutory consolidation app in Anaplan. This app can be downloaded and then configured to match your business setup and process. Simply put, it comes with full IFRS statutory consolidation functionality.

Overview: Anaplan’s cloud-native platform is accessed securely on any device and enables you to automate and improve the manual, often spreadsheet-based consolidation process. This app provides landing dashboards for all users based on their security, such as this one that gives a high-level overview of the different steps in the consolidation process and some high-level financials.

What we can see in our dropdown here is a consolidation structure for a global organisation. The group consolidation member we are on is the entire group consolidation that holds many entities, but we can also see other subgroups or sub-consolidations. The subgroups can be consolidated into different currencies. Our group reporting currency for this example is euros, but this can be any currency or multiple currencies. We can also see the period that we are working on; in this example, that’s December 2021. And then finally, we can also see our scenarios or version dimension. Anaplan supports both consolidation for actuals and also any number of planning versions. In this video, I’ll be focusing on actuals.

The steps to complete the process can be tracked at the top of the traffic light system here. We can see that currently there are two reporting units that need to close and submit their ledgers and a consolidation control error. The consolidation process itself is split into two parts: the month-end close of the ledgers of the individual entities, so bringing in their actuals to our plan and then validating them, and then the consolidation itself, the eliminations, your journals, etc., to get to that consolidation.

I’m going to start by looking at the month-end close of the ledgers of the individual entities, bringing in their actuals to Anaplan and then validating the data. Here, we can see all the entities that make up our group consolidation and at what stage in the data collection process or workflow process they are in. We can easily focus in on areas with an error, such as in this case with France and the UK. We can see that the France trial balance has an error where they’ve imported trial balance that does not balance; it’s out by 100 euros. We can easily fix this in our plan by posting an adjustment through a single-sided journal. Anaplan allows us to create new journals through this button here, and each one will have a unique identifier. Here, I’ve pre-filled my journal information targeting the cash and cash equivalent account with a 100 euro credit for France, and I’ve ticked the fact that that’s a single-sided local data correction journal. To post that, I just select the version that I want to post it to, and in real time, that has posted the journal without the need to run any process. This is another key benefit of Anaplan: that all data is linked and flows through in real time, so making any changes to my data, whether it be an import or an adjustment, flows through not only on this dashboard but also flows through the whole consolidation, right the way to our integrated consolidated financial statements.

So, we were able there to overlay journal adjustments in Anaplan. These are categorised separately and can be reported on separately. Each individual entity controller can have their own landing dashboard also. Anaplan uses security so we can restrict users’ access down to just the areas they work on.

Here we can focus on the steps that controller needs to complete in order to be able to finalise their month-end data collection. If I switch to the UK, we can see here that the UK has not imported their actuals into the system for December 2021. There’s lots of ways that we can do this. Most likely would be to have a direct connection to your source system, which can be scheduled to run hourly, daily, etc., or it can be run on demand by the end user. End users can also import data from a flat file to import. We can click on that “Input Actuals” button. We can select our flat file, and we can then run the process very quickly. Our data is in successfully, and controls have been updated to show this. We can see our data has come in on this dashboard.

As the group controller on the process, you can also use Anaplan to email the entity controller directly if you want to ask them why they haven’t loaded their data in yet. They will then be notified via an email with a link to the task.

From the main closed tracking screen, we are alerted to two entities that also have an intercompany error. Here, we have an intercompany matrix which enables us to see any imbalance between our parties in the rows and our counterparties in the columns in a reporting currency of our choice. We have the balance sheet at the top here and the P&L down the bottom. This shows a difference on our P&L of 21 euros between France and the UK, and we can see that in our pie chart on the right-hand side.

Using our dashboards, we can drill into this further down to the individual account codes, and we can see here that this intercompany posting between France and the UK has an error of 21 euros, and it’s the UK that has a posting on the cost of sales. I can fix this in Anaplan by either adding a journal or by posting a manual fix, such as in this case. So, I’m going to put my manual fix against my cost of sales account, which is where we originally posted the UK transaction with France. I can select my partner that I want to post against, which is France, and I can put in my value of 1680, which is 21 euros.

If I go back, let’s fix my intercompany reconciliation matrix, let’s fix my group matrix, and if I come back to my financial close tracking, we see we no longer have any validation issues. That adjustment I made is actually posting a double-sided journal that flows all the way through to the financial consolidated income statement.

On top of the manual adjustments you can make, the consolidation app will also automatically post your automated journals. For example, your intercompany eliminations, elimination of investment costs, fair value, goodwill, non-controlling interest, etc. If I open up my consolidated balance sheet and if I look at France, I can see here the postings that I made earlier to fix the balance sheet. Our local balance column had our import that came in from our ERP, and if I scroll down, we had an imbalance of 100 euros on the balance sheet. I posted my single-sided journal as a cash and cash equivalent account in this column, and that has then balanced our balance sheet with our local balance after restatements.

Our ownership structure is controlled through our investment register. This is a series of investment events that have taken place. If I select our German entity, which is owned by France, we can see the details behind our investment in Germany, such as the ownership percentage, the amount paid, and the goodwill. Down the right-hand side, each of these values can be updated within our plan, and then it will automatically recalculate the values in our consolidation. For instance, if we change the ownership percentage to be 90% and see how it updates our goodwill posting live and in real time. Likewise, if we adjust the amount that we’ve paid to 250,000, I’ve updated both our elimination of investments and our goodwill posting in real time.

In addition to the journals we’ve seen, manual journals can also be imported. Here, we can import manual journals from a CSV file. I’ve imported journal 7 through to 11, and we can see the details behind our journals here. If I go back to my consolidated balance sheet, I can see these journal postings have come through for Germany.

Here, we can also view our FX analysis and our currency translation adjustment via reports. Here, I’m looking at the UK entity, and I can see all of my balance sheet and P&L accounts down the left-hand side. If I scroll down to my P&L, we’re able to see our local currency values here today, our periodic currency year today. We can then see the FX rates that these accounts are converted by, and we can then see how that has been converted, both at a periodic rate and a year-to-date rate, against both an average for the P&L and a closing rate. The difference then is our currency translation adjustment that is automatically calculated by Anaplan. We can also have it calculate for historical rates of the average rate, as it resides within our equity section on our balance sheet.

To finish, reporting in Anaplan is easy through the fully customisable dashboards as shown so far. I can report my consolidated P&L, balance sheet, and cash flow by entity and by journal type, but we can also produce consistently started management report packs and also slide decks for external stakeholders, which can include visualisations and it can include any commentary which we’ve put into our plan models. This means you can report directly within Anaplan and ensures all end users have secure access to one version of the truth and the latest live numbers.

To report, I can either export this as a PDF, or I can present it live as I move through my pages. I have the ability to pivot my data between my entities, by my time periods, and by my different versions. We can also hold local currency statements, also consolidated statements for both P&L, balance sheet, and cash flow.

Thanks for watching. If you want any more information about consolidation in Anaplan or if you’d like a more detailed demonstration, please do speak to us, and we’ll be happy to help. [Music]