If you manage multiple companies in Business Central, creating a consolidated company (by using the the Consolidation functionality on the Accountant Role Centre) is an excellent way to get an overview of the financial health of your overall business. This information equally applies to NAV users who haven’t yet upgraded to Business Central.
The Consolidated Trial Balance report combines general ledger entries from each of your companies in a new company that you create to contain the consolidated data. This new “consolidated company” is a shell or container company for the consolidated data and does not include any live business data. The companies that you have included in your consolidated company then become Business Units in the resulting report.
Once consolidated, you can run any financial reports as well as account schedules to report and analyse your entire business.
What are the benefits of consolidation for your business?
Using Consolidation in Business Central can be extremely beneficial for your business. It provides you with a holistic view of your entire business’s structure and reporting hierarchy. It also gives you the ability to analyse the performance of different sections of your business, providing you with an overview across your whole business to help keep you connected and make smarter decisions.
What types of companies can you consolidate in Business Central?
Consolidation in Business Central is extremely flexible. It allows you to consolidate:
- Across companies that have different charts of accounts.
- Companies that use different financial years and different currencies.
- Either the full amount or a percentage of a company’s financial information (for partially owned companies).
- Using different currency exchange rates in individual G/L accounts.
- Companies on different versions of Business Central and/or NAV, even hosted on different servers.
Top tips when creating a consolidation company
Although Consolidation is very adaptable in Business Central, it is important to take the following into consideration when setting up and running a consolidation.
- Do the companies that you are consolidating transact with each other? If so, you should set up Intercompany transactions into company accounts before you start thinking about doing consolidation.
- Although the Charts of Accounts for the companies that you are consolidating don’t have to be the same, it will make your life easier if they are identical. You should, therefore, consider synchronising all of those companies to have the same chart of accounts. If this is not possible, you must prepare all your general ledger accounts for consolidation.
- If one of your companies uses a different currency than the consolidated company, you must specify exchange rate methods for each account before you consolidate.
- Testing the consolidation during set up is key. It will allow you to identify any errors such as a GL Account that hasn’t been mapped.
- If data for one or more of your companies is in another database, you must manually export the data to a file (use the Export Consolidation function) before you can include it in the consolidation.
Your key takeaways to consider regarding Consolidation
- Preparation – Before you start your consolidation, it is important that you take the time to understand your reporting hierarchy.
- Alignment – Try to align your consolidation with your KPI reporting.
- Ownership – Have someone own the process and set up and be responsible for maintaining it.
- Regular review – Review your reporting hierarchy regularly so that you can make timely required changes.
- Help is at hand – If you would like help with setting up Consolidation, contact TVision.
Further information about consolidation including a demo can be found in our webinar, Top 5 things you need to know about Consolidation.