Today's enterprises do not have a simple structure with multiple business entities at multiple geographies, large number of joint vetures, subsidiaries, acquisitions, de mergers etc. and all this is adding to complexities of financial reporting. Add to this, different currencies, legal requirements, ever changing leadership formats of reporting and you have a substantial challenge in front of you.
A typical structure of a large transnational organization will have parent organization with multiple subsidiaries and some of these subsidiaries would have acquired few other companies which might have their own subsidiaries in few countries. Then there will be different business lines or verticals which operate independently or have joint ventures. Now, consolidating the financial data from all these entities is a challange and most of the time your transactional system or ERP will not be able to help in this specially if more than one system is being used in these entities. Another important point is that the business intelligence tools will also not be able to help in giving the correct information as data is available in piece meal and the real picture is not captured.
While deploying a business intelligence solution, it is imperative that our data is first consolidated with the help of either a financial consolidation tool or the module of the Enterprise Performance Management tool you have deployed. The major benefits of data consolidation will be:
- Get a single source of truth: These Provide a single version of the truth to support financial management and statutory reporting
- Accelerate reporting cycles: Substantially reduce the period closing cycles and deliver more timely results to internal and external stakeholders across the globe
- Improve transparency and compliance: Helps reduce the cost of compliance (as stipulated by the Sarbanes-Oxley Act, IFRS, electronic filing, and other regulatory requirements) and support disclosure requirements, such as sustainability reporting
- Perform strategic analysis: You will spend less time on processing and more time on value-added analysis
- Aigning the enterprise with its KPIs
- Assist leadership take faster and fact based decisions
- Simulation of scenarios and doing what if analysis
- Allocation and re-allocation of costs and overheads across entities without distrubing the transactional system entries
- No need to look at multiple sources of data