Au secours ! Encore une consolidation tenue sur Excel !

Bannerswebsite 25 716x311

Force est de constater qu’un certain nombre de consolideurs se « débrouillent » avec Excel. Si cet outil n’est pas à proprement parler un outil de consolidation, il est évident qu’il peut rendre quelques services en la matière et accompagner le consolideur dans certaines de ses tâches. Cependant, ses limites dans ce domaine sont rapidement flagrantes.

Réaliser les calculs de consolidation avec un tableur

Tout d’abord, l’ensemble des calculs, opérations et transactions se fera manuellement. Bien entendu, certains liens ou automatismes peuvent être mis en place. Ces liens et automatismes aboutissent par ailleurs très vite à de multiples feuilles de calcul, toutes liées les unes aux autres, ce qui année après année constituera un document illisible, très peu flexible et à risques tant les liens sont multiples, sans véritables validations et « retouchables » manuellement. C’est certainement le paradoxe « Excel » puisqu’au départ, cet outil est utilisé pour son côté convivial, flexible, facile à mettre en place et peu coûteux.

Si nous nous attardons quelques instants sur les calculs de pourcentages de contrôle et d’intérêt qui sont préalables à tout processus de consolidation, il est aisé de comprendre que même pour des groupes restreints, ces calculs peuvent devenir assez rapidement laborieux et sources de multiples erreurs possibles s’ils sont obtenus « manuellement » aux travers de feuilles Excel.Pourquoi se passer du confort proposé par les outils de consolidation ? Outre le fait que le logiciel réalisera les calculs et définira les méthodes de consolidation à votre place, la mise en place de diverses simulations au sein du périmètre mais également les corrections d’éventuelles erreurs au niveau de ce dernier s’en trouveront réellement facilité et surtout sécurisé !

2) What is consolidation?

Many “beginners” see consolidation information as being part of a matrix organisation (companies x accounts) and, therefore, as excellent candidates for entry in a spreadsheet. This idea is wrong. Consolidation information is based on a transactional structure, not a positional one which implies at least four different dimensions: the company, the account, adjustments, flows and, sometimes, analytical aspects. This information isn’t part of a matrix, but of a hypercube, thus the need to use a database. In order to be able to work effectively with these multiple aspects of consolidation, it is necessary to use appropriate software that will allow its users to understand this multidimensional process as well as possible.

3) Consolidation calculations with a spreadsheet

All calculations, operations and transactions necessary for your consolidation process are done manually with a spreadsheet. Of course, some links and automated processes can be set up. These links and automated processes quickly turn into multiple worksheets, all linked together. Year after year, all these sheets and data will constitute a huge unreadable document, very inflexible and risky because of the many links, without real validation and manually "re-touchable".

This is what we could call the "Excel paradox". Initially, this tool was used for its user-friendly and flexible side. Easy to set up and inexpensive, it appeared to be the best tool to realize your processes. Nowadays, Excel's strength becomes the main risk of your consolidation. Dedicated software will mitigate these risks, while still offering great flexibility and easy data handling.

Moreover, a spreadsheet doesn’t allow for consolidation package automation.

Control and interest percentage calculations

Control and interest percentage calculations carried out before the consolidation process can quickly become laborious and the source of many errors, even for small groups, if they are obtained “manually” via worksheets.

There is a clear benefit to using specialised software in this case. The software will do all of the work for you and will, importantly, guarantee the reliability of the data: calculations, definition of the consolidation methods, implementation of various simulations within the scope, and the correction of any errors occurring in the latter.

4) Application of consolidation methods

The application of consolidation methods using a spreadsheet is done manually, by definition, and is therefore very time consuming and can’t guarantee reliable results. In fact, the conversion of corporate data into the consolidation currency and the calculations required for minority shareholders and consolidation reserves are fertile ground for errors.

By automating all of these tasks, consolidation software enables productivity gains and makes it possible to quickly obtain reliable results.

5) Minority shareholders and translation adjustments

Many consolidations done using a spreadsheet omit minority shareholders in the equity or proportionate approach. With this method, it’s also common to forget to allocate to minority shareholders their share in the value of a holding held through another subsidiary that isn’t 100% owned by the parent company.

As for translation adjustments, consolidation reserves and minority shareholders, their reconstitutions and justifications often result in an unbelievable loss of time because they must be reconstituted outside of accounting, starting with the corporate situation of each subsidiary.

If we go a little deeper into the consolidation process, we may still be faced with the problem of managing consolidation entries, the concept of flow, and the creation of restitution reports or financial statements, as well as of cash flow and tax proof tables. All these problems can be overcome with the right consolidation software. Actually, our tool allows a global and reliable data approach, which limits the risk of error or oblivion and saves precious time for the different actors. In addition, thanks to its intuitive interface and its numerous functionalities, it facilitates the realization of each step, from data collection to closing the process.

6) Management of consolidation entries

A system for consolidation entries can be set up under Excel. However, ensuring its longevity is another matter. With each new consolidation/period/year, it will be important to review the entries from the previous year to determine if they have to be carried over or not, and if yes, how?

In addition to the fact that this recurring exercise will be very time consuming, other items, such as sales and de-consolidation, must be taken into account which will, no doubt, require that consolidators working with Excel deal with the painful problem of isolating the entries by company. The latter point requires working with linked accounts within each company, which is rarely the case under Excel which provides the “flexibility” needed to post entries from company to company and, consequently, compromises any possibility of obtaining the contributions by company! By choosing consolidation software that has been specifically designed for your sector, you acquire a tool that is able to remedy all of these problems and provide the appropriate solutions.

7) Manual updates vs updates using software

Using a spreadsheet to do a consolidation creates difficulties and risks related to updates. If the chart of accounts is deployed using one worksheet per company and the chart of accounts has to be modified, updates must be done for each worksheet (which is tedious), not to mention the risk of using the wrong lines (inconsistency).

With consolidation software, you avoid the bias of using an Excel spreadsheet: updates are automated and reading the results is simplified. You save precious time and reduce the risk of error, which is inherent in manual work.

8) Consolidation software for different variants

Again, a spreadsheet isn’t the best tool for producing consolidation variants from the same set of data: IFRS consolidation, followed by a version in local GAAP, creation of a sub-group, production of segmented data (IFRS), etc. However, suitable software can handle this wide variety of data. It allows you to retrieve the desired information and gives you the tools necessary to process it. Your analyses will therefore be based on correct and usable data, regardless of the complexity of the consolidation variants.

9) The concept of flow

The concept of contribution isn't the only one that causes problems for Excel consolidations. In fact, most consolidations processed using a spreadsheet are done with balances. The notion of flow is usually totally absent. The implementation of a cash flow statement in Excel is always very laborious. It is created by trial and error, without any guarantee of quality despite the time spent, by drawing on information in the financial statements of the various companies in the scope. Thanks to the right software, you can guarantee the same quality for each implementation of your consolidation processes. In addition to the cash flow, the concept of flow is essential to automating the creation of restitution reports and other required or compulsory reports.

10) Intra-group (or interco) transactions

At some point in the consolidation process, the consolidator must check the status of interco positions between subsidiaries one last time, even if a prior exchange procedure was carried out. In practice, this means checking that the interco position of A with B for a certain account actually reflects interco position B with A for another account. This linking can take on combinatorial proportions that are difficult to manage in a spreadsheet. Interco relationships are not account to account but, rather, accounts to accounts relationships. There is no doubt about the complexity of intra-group relations between the various subsidiaries. This is why the use of suitable consolidation software is essential. It is the best way to access these data and analyse their combinations, significantly reducing the risk of error or approximation.

11) The audit phase

The auditors we have spoken with are clear: they are more confident when they have to audit a consolidation that was done with professional software. It’s a guarantee of quality in their eyes. Consolidation software makes all of the processes secure. In addition, the best performing consolidation software provides detailed audit trails that enable auditors to access the reasons for each entry. The result is a quick and efficient audit. The reliability of this type of tool makes your collaboration with auditors long-lasting and reliable, while giving you credibility with all stakeholders.

It's also very likely that the new European standards imposed on audit companies will lead them to recommend the use of dedicated professional tools to their clients in order to guarantee the quality of the consolidated accounts production process.

12) Sharing of know-how

Lastly, the spreadsheets used and the overall file are generally well understood by the “creator of the model”, but what happens if that person leaves the group? It becomes a matter of the continuity and security of the group’s consolidation. If you need to produce reliable data quickly, save time, and gain credibility during the audit phase, we recommend that you invest in consolidation software. It’s a matter of your time and the quality of information created and provided to your internal and external clients.

12 good reasons to choose our consolidation software

It’s obvious that a certain number of consolidators are able to manage their consolidation with Excel, until the group grows and spreadsheets become unreliable and difficult to handle. As the limitations of Excel become rapidly apparent, this article presents 12 good reasons to choose a consolidation software that is entirely dedicated to your processes.

Did you recognize yourself in the aspects discussed above? Perhaps you realized that your group had evolved and that the use of an Excel chart was no longer appropriate for your needs. If this is the case for you, we will be happy to discuss our consolidation software with you to find the best way to optimize your processes, according to your specific needs.

12 good reasons to choose our consolidation software

It’s obvious that a certain number of consolidators are able to manage their consolidation with Excel, until the group grows and spreadsheets become unreliable and difficult to handle. As the limitations of Excel become rapidly apparent, this article presents 12 good reasons to choose a consolidation software that is entirely dedicated to your processes.

Did you recognize yourself in the aspects discussed above? Perhaps you realized that your group had evolved and that the use of an Excel chart was no longer appropriate for your needs. If this is the case for you, we will be happy to discuss our consolidation software with you to find the best way to optimize your processes, according to your specific needs.