Are your financial statements being held up by the consolidation process?
Comprehensibility reduces the work and costs involved in the annual audit
Christmas comes but once a year… and then the annual financial statement casts its long shadow. How fortunate, then, that you can simply enter this year’s figures in last year’s Excel file. Lo and behold: out comes your consolidated financial statement, and you can now look forward to your auditor dropping in for coffee at the end of May and waving it through.
Hands up, all those who designed their own Excel template!
Or is that not what happens in your case? Is your Excel template an unknown quantity created by your predecessor’s predecessor? At the thought of all those links to the subsidiary companies’ Excel sheets and to the budget in SAP, do you just cross your fingers and hope for the best?
If you do, don’t worry: you’re not alone!
Well-known problems – less well-known solutions.
The problems are well-known: staff turnover, opaque Excel programming, changes in the consolidation method following further acquisitions or sales, increasing complexity. And of course – without going into too much detail at this point – once your business has reached a certain size, your auditor will no longer accept Excel-based annual financial statements.
What are less well-known are the solutions. How do you search for consolidation software that is intuitive to use, takes care of all the links to back-office systems, previous years and individual companies, and carries out all the calculations as well as the error and plausibility checks?
Having identified corporate performance management software, Business Intelligence or Artificial Intelligence as the answer, people are quick – but wrong – to shy away from what are perceived to be major projects.
Small steps – a huge impact.
It won’t surprise you that there’s no such thing as the one ideal corporate performance management or Business Intelligence solution for all businesses. That’s why the first step should be to conduct a brief analysis of your current situation. How complex is your annual financial statement? What applications and software systems do you use? Which tasks currently require the most work?
The step-by-step approach identifies the starting point at which a solution will simplify the consolidation process for your group most effectively in the short term – and automate and speed up your entire planning, analysis and reporting processes in the long term. This approach will also prepare you in good time for the day when your auditor will only accept your annual financial statements if they have been prepared with a certified software solution.
Comprehensibility as the benchmark
Let’s return to your auditor’s visit. Everybody appreciates a friendly welcome with fruit and drinks. Yet you will probably be pursuing the common goal of getting the audit over and done with as quickly as possible. Whether you succeed in bringing it to a swift conclusion depends chiefly on how easily your reports can be understood.
Do you have explanatory notes and evidence at the ready – perhaps even at the touch of a button – for every balance sheet and P&L item? Can the auditor retrieve the underlying voucher for every accounting entry? Can you generate the list of postings automatically?
The greater the transparency in your documents, the less work and the lower the costs involved in the annual audit, so it’s well worth getting rid of mysterious Excel formulas, accounting entries that don’t tally and opaque previous-year figures.
Put your annual financial statement on the right track now so that your auditor signs it off in record time next spring.
See for yourself how professional software for consolidation can help you. You can arrange a presentation here.