Small suggestion to facilitate (external) Consolidation of Businesses

I presently have 7 different business entities (in various countries, with various base currencies etc etc) that I need to consolidate. I do realise there is presently not a consolidation feature in Manager and I need to do that “manually” in a spreadsheet software or similar.

As a first step, such external consolidation would be easier if the Chart of Accounts (CoA) had a similar structure in all entities.

The process of synchronising the CoA across these entities would be greatly simplified if I could “export” the Chart of Account for each company. I could then easily see where I should update the CoA of certain business in order to get a more consistent layout before I export the reports to be (externally) consolidated.

I think this should be a quite simple feature to implement in the software and, at least in my view, it would be a good step towards simplifying consolidation.

Obviously, this can in later steps be improved further, by e.g.;

  1. Allowing a “batch import” of a Chart of account" (from spreadsheet) when creating a “New Business”

  2. Maybe be able to have a simple “Code” for each Business (if you have a multi business implementation) that indicate if this Business is part of a “Group of Businesses”. This feature could then give several nice possibilities, such as;

  • If the CoA of one of the entities in a “Group” is updated (like adding a new account or changing the name or account code of an account) the user may be allowed to “tick” a box to decide if this update should be propagated to all Business entities of the Group

  • Even though proper “Group Consolidation”, would still need to be done externally (to take care of “Inter-company balances” etc) it should be fairly easy to implement a “Draft Management Consolidation Report” of the the whole Group. Such a report could for example be done as follows;

  • When the report is created, the “consolidation currency” is selected together with the date/period for the report
  • The report (typically P&L or Balance Sheet) list two columns for each Business entity (base currency and consolidated currency) together with a Simple “Group Total” as the right most column (in consolidated currency).
  • This report can be exported to spreadsheet, where the manual adjustment for inter-company entries etc would now be greatly simplified…!

This is by no means a complete and full consolidation function (which i agree would be very complex to implement), but I believe this “Consolidation Support” function would solve 95% of the work required for consolidating a Group of Businesses. Some manual work would still be required “externally” for a proper consolidation, but all the necessary data is exported to a neat and well structured spreadsheet (assuming the Chart of Accounts are neat and tidy of course).

Also, in the “day by day” operation, the Group management will be able to follow performance of the Group for all key items that are not effected by “consolidation adjustments”, like e.g. “External Sales”.)

Read this topic of a previous discussion Need help with consolidation and intercompany transfers

Yes, I have read all and I know I need to do this externally. Read my post and you’ll see that it is just a proposal for how relative minor updates could greatly simplify such external consolidation (as I do realise a complete support of consolidated accounts is very complex).