As organisations grow through acquisition, restructuring or international expansion, their financial structures often become increasingly complex.

What may begin as a relatively straightforward group structure can develop into multiple subsidiaries, ownership vehicles, business units, currencies and reporting requirements, often supported by different finance systems and processes.

For group finance teams, this complexity can make financial consolidation significantly more challenging. Data needs to be collected from across the organisation, intercompany balances reconciled, currencies translated and adjustments made before accurate consolidated results can be produced.

When these processes rely heavily on spreadsheets and manual intervention, the financial close can quickly become time-consuming and difficult to control.

For organisations managing increasingly complex group structures, having the right processes and financial consolidation technology in place can make a significant difference.

Why complex group structures make financial reporting harder

Every additional entity introduces another source of financial information that needs to be incorporated into group reporting.

Different entities may operate different ERP or accounting systems, use different charts of accounts or follow slightly different reporting processes. International groups may also need to manage multiple currencies and local reporting requirements.

Over time, finance teams can find themselves maintaining increasingly complicated processes simply to bring this information together.

Spreadsheets often play an important role in bridging the gaps between systems. While they can provide flexibility and familiar look and feel, the reliance on manual exports, formulas and adjustments can make consolidation harder to manage as the organisation grows.

Finance teams may spend significant portions of the close collecting information, checking data and resolving inconsistencies rather than reviewing performance and providing insight to the wider organisation.

Creating consistency across financial data

One of the fundamental challenges of group consolidation is creating consistency across information originating from different parts of the organisation.

Subsidiaries may have different charts of accounts or use different terminology and classifications. Before information can be consolidated, these differences need to be mapped into a common group reporting structure.

This becomes particularly important following acquisitions.

A newly acquired business may operate an entirely different finance system and reporting structure. Replacing those systems immediately may be neither practical nor necessary, but group finance still needs a reliable way of incorporating the organisation's financial information into consolidated reporting at pace.

A purpose-built consolidation platform can provide a central layer between these different source systems and group reporting.

Rather than requiring every entity to operate identical systems, data can be mapped into a consistent structure, allowing group finance to establish greater control over how information is consolidated and reported.

Managing intercompany reconciliation and eliminations

Intercompany activity is another major source of complexity for multi-entity organisations.

Transactions between group companies need to be identified, matched and eliminated correctly during consolidation. Differences can arise for several reasons, including timing, currency movements, inconsistent coding or transactions being recorded differently by each entity.

When this process is managed manually, finance teams can spend considerable time investigating discrepancies between entities.

Purpose-built consolidation software can help automate elements of this process.

Intercompany balances can be matched systematically, with differences highlighted for investigation before the final consolidation takes place. Elimination rules can also be incorporated into the consolidation process, reducing the number of manual adjustments required.

Instead of searching through spreadsheets to identify where balances differ, finance teams can focus their attention on exceptions that genuinely require investigation.

Handling multiple currencies

For international groups, currency translation introduces another layer of complexity.

Different balances may need to be translated using closing, average or historical exchange rates depending on the nature of the account and the applicable accounting requirements.

Trying to manage these calculations across multiple entities through spreadsheets can create a significant administrative burden.

Financial consolidation platforms can automate currency translation according to predefined rules, helping ensure that exchange rates and translation methods are applied consistently across the group.

As the number of entities and currencies increases, this automation becomes increasingly valuable.

Improving control and auditability

Financial consolidation is not simply about producing a final set of numbers. Finance teams also need to understand how those numbers were produced.

When consolidation involves numerous spreadsheets, manual journals and offline adjustments, establishing a clear audit trail can become difficult.

Questions that should be straightforward can require significant investigation:

Where did this figure originate? What adjustment was made? Who made it? Why was it changed?

A centralised consolidation system can provide greater visibility over the process, including data submissions, adjustments, approvals and consolidation entries.

This creates a clearer path from the source information through to the consolidated result, supporting internal review processes and making it easier to respond to queries from auditors and other stakeholders.

Supporting evolving reporting requirements

Group reporting requirements rarely remain static.

Organisations acquire and dispose of businesses, reporting structures change and accounting standards evolve. Management may also want to analyse performance differently from the organisation's legal entity structure.

Finance systems therefore need to provide enough flexibility to accommodate change without requiring the reporting process to be rebuilt each time.

IFRS 18 is a current example.

Effective for annual reporting periods beginning on or after 1 January 2027, IFRS 18 introduces changes to the presentation and disclosure of information within financial statements.

For affected organisations, implementing the standard can require changes to reporting structures, classifications and comparative information.

While the accounting standard itself determines what needs to be reported, financial consolidation technology can help organisations implement those changes consistently within their reporting processes.

What should organisations look for in financial consolidation software?

Moving away from spreadsheet-led consolidation does not mean every organisation needs the same solution.

The right approach will depend on the complexity of the group, existing systems, reporting requirements and the challenges finance is trying to address.

However, there are several important areas to consider.

Organisations should look at how effectively a solution can integrate information from different source systems and map differing charts of accounts into a consistent group structure.

They should also consider capabilities around intercompany reconciliation, automated eliminations, currency translation and journal management.

Auditability is equally important. Finance teams should be able to understand where information originated and trace adjustments throughout the consolidation process.

Finally, organisations should consider their future requirements rather than evaluating a solution solely against today's reporting process.

A consolidation platform should be capable of supporting organisational growth, acquisitions, changes to reporting structures and evolving regulatory requirements without creating another layer of manual work.

Technology is only part of the answer

Implementing consolidation software is not simply a technology project.

Organisations also need to consider how financial information moves through the business, who owns different stages of the process and where existing inefficiencies originate.

Simply recreating an existing spreadsheet process within a new platform is unlikely to deliver the full benefit of the investment.

Implementation provides an opportunity to review processes, standardise reporting structures, improve controls and identify areas where manual activity can be reduced.

Training and knowledge transfer are also important. Finance teams need to understand not only how to operate the new system, but how the redesigned consolidation process works and where responsibilities sit.

The objective should be to create a consolidation process that is easier to manage today while providing a stronger foundation for future reporting requirements.

How HAYNE Solutions can help

HAYNE Solutions works with finance teams to improve financial consolidation, reporting and Corporate Performance Management processes.

Our consultants combine finance expertise with extensive experience implementing and supporting financial consolidation technology, including IBM Controller and CCH Tagetik.

We can help organisations review existing consolidation and reporting processes, understand where technology can reduce manual intervention and implement solutions designed around their specific requirements.

Our support continues beyond implementation, with consultancy, training, application support and managed services helping organisations maximise the long-term value of their Corporate Performance Management investment.

Whether your organisation is managing increasing entity complexity, replacing spreadsheet-based consolidation or reviewing whether its existing financial reporting environment remains fit for purpose, the right combination of technology, process and expertise can create a faster, more controlled and more scalable approach to group financial reporting.