Financial Consolidation Tools for Microsoft Dynamics GP

This article will discuss the necessity of powerful financial consolidation tools for Microsoft Dynamics GP customers who manage parent company portfolios, while exploring key features and functionalities. Plenty of Microsoft Dynamics GP customers are managing the financials of a parent company, with multiple subsidiaries. Combining organizational information from more than one company, sometimes with diverse currencies, can be tedious without a modern financial report writer and consolidations solution. Data continues to grow in size – and in significance, regarding decision-making for the future of a company. Executive teams are thus shopping around for an easy-to-use tool for the regular hurdle of aggregating data into unified financial statements. If you’re a Dynamics GP user who is charged with consolidating subsidiary company data, this article will highlight the few options you have that combine power, modernity, and business user friendliness. First things first, let’s define the term. Financial consolidation means that transactional data from subsidiary companies are combined and reconciled into a singular set of financial statements for the parent company. These statements consolidate the subsidiaries’ information that comprise the overall health of the parent company in a straightforward report. Consolidations include currency conversions when diverse monies are involved, eliminations for transactions between subsidiaries, and any additional adjustments that need to be made manually without today’s financial consolidations solutions in order to get a comprehensive picture of the parent company. This might be a good time to shop for a modern consolidation tool for several reasons, but a couple stick out to me. Your finance team might be in the market for a modern, automated consolidation solution for lots of reasons. Some are eager to retire their older consolidation tools that have proven too simple for today’s business demands, like Enterprise Reporting or FRx. Others would like to get rid of the more mature software that is too difficult for non-IT professionals to operate, like Cognos or Hyperion. I recently met a controller who uses Dynamics GP to manage multiple subsidiaries around the world for a multi-national parent company. This controller is responsible for meeting national and international requirements, as well as currency conversions, like the International Financial Reporting Standards (IFRS) to Generally Accepted Accounting Principles adjustments (GAAP), also known as IFRS to GAAP. Some consolidation solutions offer flexible, sub-ledger analytics and are positioned within a full Business Intelligence (BI) suite, fully integrated with other modules like ad-hoc reporting, budgeting, forecasting, modeling, data visualizations, and BI data storage modules. I’m going to do a little drill down on the details of financial consolidations for Dynamics GP, including what it is that you should know when shopping for the right solution for your company. I have written about data integration options, but you can choose to consolidate live from GP with potentially sluggish real-time analytics, depending on the number of users and the size of the query on the GP server – OR you can integrate at a higher performance with a BI data store, but it entails data replication to an online analytical processing (OLAP) cube or a data warehouse. Organizations with few subsidiaries to aggregate, with light or no currency conversions required, and/or without the worry of slowing down the GP server with larger data queries would likely thrive with a live integration. Also, if you aren’t planning to utilize other data sources, don’t have to post elimination entries or additional adjustments beyond what GP can do, you might as well stick with Dynamics. However, several data warehouses and OLAP cubes do host consolidations by pulling GL data directly from GP, so this is a beneficial option for corporations with different needs. You can replicate information to a fully built data warehouse or an OLAP cube with routine, scheduled refreshes or with a manual push. Data from GP will replicate, usually via Microsoft SQL Server Integration Services (SSIS), to the BI data store, and consolidations can be run at higher performance levels due to the strength of a data warehouse or an OLAP cube. If you have to perform more complicated currency conversions, are concerned about the speed of GP with your typical data querying, and/or if you have a large amount of company information to aggregate, a BI data store will benefit you the most. You should also be assessing which modern consolidation functions are necessary to meet your specific business needs. First up: intercompany eliminations. From time to time, one subsidiary might buy or sell products or services to another entity, which then cancels out the line items for both subsidiaries. Intercompany eliminations remove these cancelled out transaction from the P&L and balance sheet because it is a simple resource re-allocation, which can be processed within Dynamics GP or a BI data store, through the solution you implement. Some BI tools even have fully configurable Excel input forms that you can utilize to manually eliminate or adjust transaction in business user friendly ways. More modern functionalities: currency conversion and consolidation adjustments. Currency conversion allows multi-national organizations to combine their transactional information into a singular company report with one currency through this function. Consolidation adjustments include (IFRS to GAAP) are made to meet domestic and worldwide accounting regulations, updating inventory, or temporary correction of incomplete subsidiary data, amongst others. These are simply functionalities that aid you in the process of submitting statutory statements. And the consumer-driven features don’t stop there. Allocations, reconciliations, and modeling organizational changes are additional significant elements involved in financial consolidations. Some companies choose to allocate specific expenses or revenues to a department, a division, and/or a particular subsidiary. You can run these allocations within GP, while loading the information to a BI solution, or sometimes, you can build allocation reports of varying complexities within a data warehouse or OLAP cube. If you decide that the BI data store route is your best bet, lots of companies like to have either parent company or subsidiary personnel reconcile the data to ensure everything is accurate, which can be done with GP, a BI front-end tool, or in the BI data store. Finally, if you want to see the effects of divestitures, acquisitions, or reorganizations, some data sources empower you to do some modelling by copying and changing however many company trees or hierarchies you need. With this function, you can envision how specific changes can affect the subsidiary portfolio. There’s lot to consider in your shopping process, given the complex nature of consolidations. Solver, Inc. is happy to answer questions and generally review BI360’s easy-to-use, Excel-powered consolidation tool for Microsoft Dynamics GP with both real-time or data warehouse integrated analysis, comprehensive reporting and collaboration as a way to accelerate company performance management.

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