Your consolidation software: which model should you use for data collection?
Your consolidation and reporting software offers you multiple modes for collecting data from your entities.
Possible data entry modes include:
- Automatic interfaces (with an ERP or import of files from Excel / *.csv)
- Off-line data entry
- Online data entry
Which mode of collection is most suited to your group?
Your choice will depend on several parameters:
- Do you use your application only to perform a statutory consolidation or for management reporting?
- Is your organisation highly centralised or does it have an ERP shared by all of the entities?
- Or is it highly decentralised, with multiple systems used within the group?
- Is the accounting for your entities outsourced? Or do you have local accounting teams? What skills are available within your entities?
- Do your entities have easy access to the Internet? This may not necessarily be the case for construction and public works groups whose entities are based at difficult-to-access worksites, for example.
Let’s take a look at the different possible methods for data entry and the situations in which they are most appropriate.
We recommend importing the data that is already available in the accounts into the consolidation software. In the case of a centralised organisation which has an ERP, the import can be automated or performed directly by the consolidation department. A table will be automatically updated or a file created with the data for all of the entities, which is imported all at once.
However, if your group does not have an ERP, importing files from Excel or *.csv may be delegated to the entities. By giving entities access to the software, they can enter the structure of the Excel / *.csv file generated by their accounts and create tables that correlate the local account with the group account.
Technically, all of the data can be imported via the interface. However, if you use your consolidation software for statutory purposes, you will be aware that the concept of flux, which is crucial for consolidation, is generally absent from the accounting data. On the other hand, if you only carry out consolidation at the level of the income statement, in order to generate management reporting, the interfacing will be much simpler.
Online data entry
Do you want your entities to have access to the software for data entry or not? If some of your entities are only sales offices, for example, with accounting outsourced to an agency, online data entry could pose problems. In this case it would be better to opt for off-line entry, which will be discussed below.
What are the advantages of online data entry? In the first place, this method of entry is intuitive and easy to learn. Entering comments on each cell makes it easy to guide the users in the entity. Furthermore, in terms of maintenance, updates are easier with online entry. Each new account created within the application will be automatically included in the online package whereas they would have to be manually created in the case of off-line entry. Therefore, if you use your application to generate management reports, with numerous changes in the accounts, we recommend choosing online data entry. Finally, using online data entry allows your entities to view their intercompany position compared to their counterparts in real-time, in their own currency.
Off-line entry: features and advantages
Local accounting teams, who are often familiar with Excel, appreciate this method of entry. If they have ‘end-user’ access, they can download the package themselves, complete it and put it into the system. If the group prefers a highly centralised organisation, off-line entry makes it possible for the consolidator to create the package, and send it to the entities (by e-mail …), who then complete it, and send it back to the consolidator. The consolidator then imports the packages into the application. This system requires more work at the level of the head office.
Off-line entry is also the recommended option if your entities do not have an Internet connection (activities which take place on plantations, worksites and difficult-to-access zones, etc). Or for which the accounting is outsourced to an accounting agency. Off-line entry in Excel also allows users to insert much more text than is allowed in the online version. Finally, as soon as the off-line package has been imported by the consolidation team, it becomes available on the server and can be consulted at any time by the consolidation managers.
What are the disadvantages of off-line data entry?
It offers less flexibility than online data entry and also requires more maintenance. In other words, each item added to the account within the application requires manual updates in the off-line packages.
Likewise, for creating management reports, online data entry is preferable due to the ease with which it can be updated. Basically, creating a complex off-line package in order to generate monthly reports, budget reports… is a time-consuming job: developing macros, establishing validation systems… In this case, choosing online data entry offers greater speed and flexibility.
In conclusion, off-line or online data entry… The best solution for your group depends on your organisation and the type of consolidated reporting that you wish to generate. Also bear in mind that the different data entry methods can be combined with in your group as well.