It wasn’t all that long ago that only the only companies that invested time and money into consolidating their financials were the larger corporations. As a rule, their interests were so spread out that it would’ve been impossible to operate them without consolidation.

However, since the expansion of the Internet and e-commerce, markets for smaller companies have gone global making consolidation more necessary than it used to be. Also, many midsized businesses are today involved in acquisitions, buyouts and mergers.

These developments have created a need for companies to be able to collect a wide range of financial data that is easy to access from different sources. It was this change in the business landscape that led to the evolution of financial reporting software like Qvinci which automates the and generates insightful reporting.

What is financial consolidation?

Suppose you have a parent company and three subsidiaries. It is important to understand how each subsidiary is doing at all times and you need a way to compare performance. This requires a great deal of financial data that must be consolidated before you can do anything useful with it. This is where financial consolidation software can be hugely beneficial.

Problems with creating reports manually

Manually creating reports is a massive time such. To start with, you need to gather all of the relevant financial information (e.g. P&L) from each of your business’ unique entities. One entity at a time, that information then has to go into spreadsheets and formulas need to be created to get the reports you want.

The more entities your business has, the longer this process takes. And that’s only the beginning. You then have to take all of those reports and combine them to create consolidated reports. It’s an expensive process that can take days, weeks or even months depending on the size of your organization.

How are financial reports created?

To give you an idea why it can be so time-consuming, let’s look at little closer at the process:

  • Map general ledgers to one common chart of accounts
  • Import data from all the different entities involved. This may include changing file extensions
  • Assess data
  • Make necessary adjustments to the consolidated data
  • Produce consolidated financial reports

International concerns about financial consolidation reporting

If your organization has outlets or branches in other countries, this can present additional problems with data consolidation. All figures may need to be in one currency and there may be different requirements and regulations involved which can further complicate the process.

What can financial consolidation software do?

If you have software like Qvinci for Franchises, the entire process is of consolidating financials is automated and simplified, including currency conversions. It is designed to work with all versions of QuickBooks plus Xero and Excel and it features automatic file synching, benchmarking, ranking reports and more.

No longer is up-to-date financial reporting only for large corporations. Today’s technology has made it something that any multi-entity business can have.