How JustPerform simplifies & automates consolidation process

       
  • Financial Close
  • Shameek Bhushan

How JustPerform simplifies & automates consolidation process

How JustPerform simplifies & automates consolidation process

More and more enterprises are operating globally. They set up subsidiaries abroad to open new markets and to satisfy the needs of local customers. While being a global enterprise provides a lot of benefits, it has complexities too. One such complexity involved in global or large enterprises is the ‘Financial Consolidation process.’

Before going further, let us first understand

What is Financial Consolidation?

Financial Consolidation is the method of integrating financial data within an entity, typically for reporting purposes, from various departments or business organizations. This process involves importing data, translating general ledgers into a single chart of accounts, standardizing consolidated data and generating reports called consolidated financial statements.

In other words, it is the process of generating a group’s consolidated financial statements for the internal and external stakeholders.

It is more of a statutory requirement for large companies to perform financial Consolidation and produce their consolidated statements. The financial consolidation process is one of the most complex and cumbersome CPM processes in an organization.

In this blog, we will understand more about,

The major challenges involved in Financial Consolidation Processes and

How JustPerform’s five pillars of Financial Consolidation help in overcoming them?

Challenges in Financial Consolidation Processes

Some of the major challenges that companies face in the financial consolidation processes are as follows:

 

Evolving statutory requirements

Enterprises have to follow the various accounting rules and guidelines while preparing the consolidated financial statements. These include international financial reporting standards (IFRS), GAAP, and other country-specific governing bodies like security and exchange commission.

The entire financial consolidation process needs to be more stringent to comply with this ever-evolving requirements.

 

Data Collection

Data collection can be a tedious task in the financial consolidation process. This process requires parent company to gather data from its group of companies to present consolidated results.

This activity gets difficult when companies in the group use multiple ERP systems as their transactional systems with no real integrations. So, data being the core part of any financial close process, its collection should be made seamless and smooth.

 

Adjustments

The financial consolidation process involves a series of adjustments. These adjustments get complex when all the individual companies in a group operate it in different currencies.

These adjustments typically include journal entry adjustments like intercompany eliminations, currency conversions and carryforwards. A manual approach to all these adjustments is error-prone and ineffective.

 

Quality of Data

Quality of data plays a crucial role in providing accurate financial position of an enterprise. Since this process requires data from multiple sources, the quality of it may get affected. So, having a uniform set of standards to collect and maintain data is essential in the financial consolidation process.

 

These are some of the significant challenges involved in the financial consolidation process. Moreover, having a streamlined process flow for a financial consolidation process can itself be a difficult task.

Companies have to undergo most of these challenges even if they are using any financial consolidation software. This is because all these challenges are associated with creating a financial close process while the current software addresses its execution.

Hence, irrespective of the system/software you have in place, the first and foremost step is to have a robust and scalable financial consolidation process in place.

Is there a way to simplify and automate the financial consolidation process?

A simple answer to this question is JustPerform.

So, what is JustPerform?

JustPerform is a new generation, intelligent Corporate Performance Management (CPM) cloud platform. It guides enterprises and organisations in business planning, consolidation, and performance monitoring. It helps them analyse the results that matter, discover insights, and plan for success. Unlike other vendors, JustPerform focuses on letting business users at all levels drive CPM activities, empowering them with an intuitive interface and industry-best practices.

How JustPerform solves these challenges of the Financial Consolidation Process?

JustPerform simplifies and automates the entire financial close process definition and execution with its five pillars of Financial Consolidation.

It, therefore, helps in building a seamless and effective Financial Consolidation process.

JustPerform’s 5 Pillars of Financial Consolidation are as follows:

Scenarios

JustPerform provides a comprehensive set of scenarios applicable as per widely accepted accounting standards. The company performing financial Consolidation can choose the scenarios relevant to them and start defining their process.

With its exhaustive list of scenarios based on IFRS, GAAP, and other accounting rules, JustPerform takes care of complying with the evolving statutory requirements.

Enterprise Structure

The enterprise structure defines the various organizational units that are present in business according to a hierarchy. Enterprise Structure is the building block for the consolidation process. This is the most critical component for consolidation and forms the basis for data submissions, Rules and Reporting.

JustPerform allows users to define their existing enterprise structure with modifications depending on the consolidation requirements.

Its Enterprise Structure functionality guides the users to define and create the dimensions seamlessly and to maintain the master data either manually or through integration with a source system.

This, in turn, makes the entire data collection process organized and smooth.

Data Enrichment

Data enrichment leads to a better quality of data, thereby better results.

JustPerform’s data enrichment maps the source system to the target system with ease. It helps to define and maintain the transformation and conversion rules for seamless integration of the data from the source system to the target system.

It even automates the major part of the data enrichment process for better quality data.

Business Rules for Automation

Business rules in JustPerform automate the entire adjustments required for Financial Consolidation.

Business users can easily define the business rules to auto-generate the adjustments required for accurate consolidated results.

This simplifies the complex adjustments involved in financial consolidation.

Orchestrating Process Flow

Once an organization goes through all the above stages, the final step is to identify a systematic financial consolidation process flow.

In this context, JustPerform provides an easy-to-follow business process flow for Financial Consolidation.

In conclusion, Financial Consolidation is definitely one of the most complex processes involved in an organization. But JustPerform with its 5 pillars, simplifies and automates this cumbersome process of Financial Consolidation.

Summary

5 pillars of financial consolidation

  • Scenarios
  • Enterprise Structure
  • Data Enrichment
  • Business Rules for Automation
  • Orchestrating Process Flow

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