3 steps to run your management consolidation efficiently

3 steps to run an efficient management consolidation and steer your group's performance.

Management consolidation is an essential process for optimizing the financial performance of a group of companies. Consolidation gives you an overall picture of the activity, results and position of a group of companies, covering not only the consolidating parent company but also the subsidiaries that make up the group.

Before you start your management consolidation, careful preparation is essential to make it effective. Here are the key steps in this phase.

1. How do you prepare your data for consolidation?

A. Collecting financial data

The first step is to gather all the relevant financial data from your entities. This includes income statements and balance sheets. To simplify this often time-consuming collection process, automated solutions can bring data from different systems into a single reporting platform. With the EMASPHERE financial reporting platform, for example, you can easily centralize this data and make it easier to collect. EMASPHERE also lets you bring in the analytical dimensions from your cost accounting so you can take your management reporting analysis further. If your analytical dimensions differ from one entity to another, you can also standardize them within the platform through mapping.

B. Harmonizing charts of accounts

It is crucial to harmonize the charts of accounts used by your entities to make consolidation easier. Make sure your accounting policies are consistent and identify any differences that could affect the consolidation process. EMASPHERE lets you, for example, identify structural or chart of accounts differences between your entities and any corrections that need to be made.

C. Defining consolidation rules

Clearly defining your consolidation rules is essential. This covers, in particular, the treatment of intragroup transactions, shareholdings, intercompany differences, and so on. EMASPHERE lets you define the intercompany accounts to eliminate and analyzes intercompany differences for you. With adjusting entries, you can correct any reconciliation issues between your different companies.

2. How do you consolidate your data?

Once the preparation phase is complete, you can move on to the consolidation itself. Here are the key steps in this stage.

A. Importing data

Use the EMASPHERE platform to easily import the financial data you collected earlier. Whether you work with Excel files or accounting systems, importing data is simple.

B. Automating consolidation

With EMASPHERE, a large part of the consolidation process can be automated. The platform performs the necessary calculations, suggests intragroup transactions, reconciles intercompany differences and generates clear, accurate consolidated reports. You can also post the consolidation entries needed to get the most accurate view of your consolidated accounts.

3. Analyze your consolidated financial reporting

Once your data is consolidated, you can move on to analysis and reporting to gain relevant insights into your group's financial performance. Here is what you can do.

A. Analyzing consolidated results (P&L, cash and balance sheet)

Use the analysis features of the EMASPHERE platform to examine all your consolidated results in depth, whether at the level of the income statement, cash or balance sheet, for example. Identify trends, significant variances and opportunities for improvement. Consolidated analysis doesn't stop at the general ledger accounts: it can go down to the analytical level based on the analysis dimensions specific to your business and your group, so you can really dig into the details of your consolidated analysis (by product type, by BU, by department, …).

B. Generating customized reports

EMASPHERE lets you create customized reports based on your specific needs. You can highlight key performance indicators and share essential information with the relevant stakeholders.

C. Making informed decisions

With access to reliable consolidated data and relevant reports, you are in a position to make informed decisions that improve your group's overall performance. With EMASPHERE, the consolidation process is simplified through automation, so you can update your consolidated reports regularly.