Five Tips for a Successful Consolidation Process

Ensure controls around source data – we all know and love the old adage ‘rubbish in rubbish out’. That’s definitely true when it comes to the data we use for consolidation. Whichever system is used to hold the transactional data, ensure that the controls are in place to ensure good quality data. Most systems will ensure that the trial balance balances (always a solid starting point) but what about ensuring that the correct chart of account combinations is being used? If certain accounts should contain additional analysis codes (maybe for intercompany) add controls to ensure these are filled in at the source. As always, when integrating data into Anaplan, it should be as ‘clean’ as possible to avoid any reworking data away from the source (a big no-no!)

Checks and balances at every step – the data in your consolidation process will go on a journey through from source to its final position in the consolidated trial balance and reports. It’s important to ensure that all sensible checks are performed all the way through this journey so that it’s easy to identify where any issues may be occurring. Typically, that journey in Anaplan involves:

1. Source system > Anaplan Data Hub
2. Data Hub > Consolidation Model local currency (LC) view
3. LC View > Translated View (including translation of LC journals)
4. Translated view to final TB (including group currency journals)

As a minimum, ensure that everything is balancing through every step of this journey. Then, add the control checks that make sense to your group, which will help give early warning signals. The Anaplan platform makes it simple to add in these checks without weeks of coding.

Collaboration in the consolidation process – up until the point where Group Finance are adding group-only adjustments to the data, make the local controllers responsible to reviewing and signing off their consolidation. How often has Group started to review local data only for that local data to change, as the local controllers hadn’t closed their transactions off within the required deadlines? This is largely about having a clearly defined process with the appropriate roles and responsibilities assigned. With Anaplan being in the cloud, it’s easier than ever to share a single version of the consolidation process with both group and local controllers.

Consolidate monthly and year-end will be a breeze – with good quality source data, the right controls and a slick process with devolved accountability it should be possible to run an efficient monthly consolidation process. Whilst not a statutory requirement, if this approach can be adopted then it saves a lot of work at year-end. Being able to catch any issues early in the year reaps significant time savings at that horrendous time of year when you are trying to get the accounts finalised.

Adding value to the process – having streamlined the consolidation process, look for opportunities where value can be added. For instance:

1. Do you have additional segments in the chart of accounts that can be used to create different cuts of your consolidated data?
2. Maybe a consolidated revenue report by customer or product.
3. Are there reports that can be created specifically for the local entities that would add value to their businesses (not necessarily to Group)?

The point is, having designed a great consolidation process; now is the time to think about what other benefits can be extracted from that process.