Why You Need A Financial Consolidation System
Manually consolidating multi-agency finances can be time-consuming, expensive, and prone to errors. Thankfully, integrated financial planning and consolidation software, such as Corporate Planner, can help to ease the burden. Here is a quick guide to the differences a financial consolidation system can make.
A Complex Process
Whether the organisation comprises a single group company with wholly owned subsidiaries, or more complex structure with sub groups, joint ventures, minority interests, consolidation can often feel like a full-time job. Accounting is time-consuming, often difficult, and requires specialist skills. Because of the labour involved, many organisations can only manage to conduct their consolidation quarterly, or – more worryingly – at the end of the financial year.
The right consolidation software automates the process, simplifying it and speeding it up. For organisations, this means being able to keep an eye on accounts while eliminating the headache of manual data gathering.
A Minefield Of Risks
Tackling consolidation manually invites a host of risks. Spreadsheets are notoriously prone to errors, and these can have devastating results. JP Morgan’s $6 billion “London Whale” incident in 2012 is one of the better known, although the collection of horror stories is regularly topped-up. Even the smallest errors can leave organisations at a significant disadvantage in terms of their strategic planning, agility, and forecasting. When consolidation is carried out without frequency, these risks can grow into real threats.
Automated software collects, analyses, and disseminates data automatically. As such, organisations and their stakeholders can approach their figures with confidence, infusing companies with extra layers of protection, flexibility, and awareness.
The process of consolidating multiple business accounts can be prohibitively expensive. It often requires input from multiple employees and can distract people from critical tasks. Back-and-forth emails can be a drain on time, and everybody losing focus to get the consolidation achieved on schedule can dent productivity. There are also hidden costs, such as missed business opportunities, inaccurate planning, and a general lack of organisational agility.
By ensuring that accounts are handled accurately and effortlessly, software can reduce the financial burden of financial consolidation. These savings can quickly add up over time as organisational clarity improves and more time is made available for critical tasks.
A Question Of Confidence
Confidence is always a worrying area when subsidiaries and joint ventures are involved. Directors and shareholders share the burden equally, with trust being hard to win and harder to maintain. Question marks regarding numbers are a primary area for disputes, not least because inaccuracies – whether deliberate or accidental – can put the entire organisation at risk. Without the right figures, no segment of the company can make decisions with confidence, and this often injects jittery unease into multi-agency businesses.
Financial consolidation software gives 360o visibility so that performance can be viewed with complete transparency. By giving every stakeholder proof of trust, organisations can have faith in their decision-making.
At Account-Ability, we don’t believe that all business risks are inevitable. The Corporate Planner software platform has been designed to comprehensively tackle the pitfalls of consolidated accounting to offer a simple, smart, user-friendly solution. For more information, please get in touch today by calling 01242 578966.
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