1st in the series, Consolidation Design in Microsoft Dynamics GP and Management Reporter
The Mid-Market is expanding through new start-ups and acquisitions and is facing the same consolidation accounting challenges, (multiple company databases, foreign currency, eliminations, transfer pricing, and various lines of business), as the large multinational Corporations often face but with more limited resources.
When a business is operated as a parent company with subsidiaries, separate accounting records are kept for each corporation. Running multiple companies in various industries, Lines-of-Business, and currencies can present a challenge to a manual or Excel based consolidation process. Bringing it all together in one set of financial statements requires a well-thought-out consolidation design.
Given the many challenges, you can successfully leverage an investment in Dynamics GP to facilitate the Consolidation Accounting process!
The complexity of producing consolidated financial statements and management reports often pushes Excel to any one person’s manageable limits. Organizations looking for a better solution find that Consolidation Software is expensive. However, if an organization develops a logical consolidation account code design, they can often eliminate the need for Consolidation Software and use Dynamics GP and Management Reporter to manage the consolidation process.
The process of consolidating the financial statements of a corporation across all entities requires a common set of reporting accounts. This process benefits from a well-thought-out corporate chart of accounts logic used by all organizations. There are no shortcuts around this requirement because, at some point, you are required to map all entities Chart-of-Accounts to the consolidation accounts. This can be done at the time of consolidation or moved downstream to each reporting entity.
There are many challenges to overcome when consolidating multiple companies:
- How do I manage separate accounting systems?
- What to do with different Chart-of-Accounts logic and segments?
- Do you have the option of starting from Scratch on your Chart-of-Accounts?
- Is redesigning an existing Chart-of-Accounts an option?
- Do you have the option of migrating existing companies to Dynamics GP?
- Can you use Excel for consolidation reporting?
- Are your consolidation processes SOX compliance?
- Do you consolidate by organization structures, lines-of-business, or departments?
- Do you have Statutory reporting requirements by country?
- Are your functional currencies different from your reporting currencies?
- Do you provide budget to actual analysis at the consolidation level?
- How do you document and manage eliminations?
No matter the size of the organization, at the end of each accounting period the results of all companies need to be consolidated. The purpose of our “Consolidation Design in Microsoft Dynamics GP and Management Reporter” White Paper is to provide successful design concepts for performing Consolidation Accounting using Microsoft Dynamics GP and Management Reporter.
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