Once the prerequisites are in place, we are also happy to help with the implementation of suitable consolidation systems. Our solutions in Group Accounting focus on the market leaders of the system providers, for which we have developed our own expertise over the last 20 years.
Consolidation systems: Integrated structures and clear governance with modern CPM platforms
In an increasingly complex business landscape, efficient consolidation systems are essential for accurate financial reporting and strategic management. Consolidation systems enable companies to seamlessly integrate financial data from different business areas and reliably meet legal requirements. In view of increasing regulatory requirements and growing corporate complexity, efficient consolidation systems are becoming even more important.
Challenges
Complexity drivers in consolidation
The consolidation of financial data in large corporations is a challenging process that is made even more complex by various factors. The most important complexity drivers include
- Corporate management: the internal responsibility structure, such as profit centers and business units, increases complexity due to additional management levels.
- Functions: The integration of internal and external reporting functions, including planning and forecasting, requires comprehensive functionalities in the corporate performance management (CPM) system.
- Structures: Different accounting and reporting systems require standardized structures that consistently map large volumes of data and replace manual processes.
- Dynamic organizations: Heterogeneous ERP systems and inorganic changes, such as acquisitions, require flexible data integration.
- Networking with other CPM processes: Interlinking with processes such as tax provisioning, ESG reporting and lease accounting increases the demands on the system and promotes the use of powerful platforms.
These factors make it clear that the complexity of consolidation is not limited to the consolidation process itself, but is increased by company-wide requirements for corporate performance management and networking.
The Solution
What problems do consolidation systems solve?
Consolidation systems address several key challenges that arise in financial reporting and management:
1. Complexity of Financial Structures:
Many companies have complex legal and organizational structures that make consolidation difficult. Consolidation systems provide the necessary support to manage this complexity.
2. Data integration:
Different ERP systems and data sources often lead to inconsistencies and additional interface problems. Consolidation systems ensure seamless integration and harmonization of data.
3. Compliance and Transparency:
In an era of excessive regulatory requirements, companies need to ensure that their financial reports are transparent and compliant. Consolidation systems provide the tools to meet these requirements and increase transparency at the same time.
Success Factors
Methodical stringency
Organizational stringency
Technical interoperability
Methodical stringency in the recording and maintenance of business transactions in the ERP is essential to ensure consistent and accurate financial reporting.
- Standardized chart of accounts: Uniform structure and definition of accounting standards throughout the Group.
- Precise master data maintenance: Clear identification of debtors, creditors and business partners.
- Real-time consolidation: Creation of the technical prerequisites for transferring closing entries for individual companies completely back to the ERP.
- Intra- and intercompany reconciliation: Ensuring consistent postings for transactions between Group units as early as the IC billing process.
Organizational stringency also plays a central role:
- Enforcement of guidelines: Implementation of binding policies for all units.
- Standardized processes for intercompany invoices: Regular reconciliation and timely posting of all intercompany transactions.
- Decentralized freedoms: Clear rules of the game in the commercial area support the operational business without compromising local flexibility.
- Clear assignment of roles: Defined responsibilities in the consolidation process to avoid misunderstandings and conflicts.
- Transparency in the structure: Promotion of a clear organization and internal responsibilities to avoid duplication of processes.
Modern consolidation systems offer extensive technical support to manage the complexity of financial structures. This includes the integration of different ERP systems, the automation of consolidation processes and the provision of clear and comprehensible reports.
- Flexible interface management: Seamless integration into different ERP systems to minimize data disruptions.
- Centralized data pools: Consistent data source for all units, creating a reliable basis for consolidation.
- Automated data transfer: Reduction of manual intervention through automated processes for data integration.
- Adaptability: Ability of the system to respond to future business changes and growing requirements.
Our Approach
1. Needs analysis: identification of the company's specific requirements in order to derive the relevant consolidation requirements.
2. Process optimization and methodology development: optimization of existing processes and definition of a standardized chart of accounts.
3. Implementation: Implementation of the consolidation system and ensuring seamless integration into the existing ERP landscape.
4. Support and change management: communicating the system requirements to all stakeholders and training users to increase efficiency.
We support your Transformation.
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Why 4C?
As an experienced management consultancy, we offer comprehensive expertise in the implementation and optimization of consolidation systems. With our proven approach and deep understanding of your individual challenges, we help you to master complexity and improve your financial processes sustainably. Contact us to find out more about how we can help you optimize your consolidation processes.
4C Solutions
4C Insights
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4C Checklist - Framework Parameters for the perfect Consolidation Tool
Get a summary of typical criteria for selecting a consolidation system in our checklist.
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4C Use Case Grohe: Group Consolidation
The automation and harmonization of complex processes and structures for efficient corporate reporting are facilitated through the transition to IFRS up to the integration of J-GAAP.
