Consolidated Financial Statements

Producing consolidated financial statements is a vital corporate process – aggregating results within a group on a monthly, half-yearly or annual basis, to give internal and external audiences the overall picture – but one that can be filled with challenges.

A group may have operations in different countries, use various currencies, have multiple ownership structures or have transactions between group constituents, which all impact on the consolidated statements and need addressing.

It may sound daunting, but the good news is that the SAP Business Planning and Consolidation (BPC) system significantly reduces or eliminates these challenges altogether by automating the creation, administration and end-to-end delivery of many processes that previously needed to be done manually.

SAP BPC is the world’s most advanced enterprise performance management software and allows business and finance professionals to collect, transform, report and analyse data, without the need to create and maintain the complex, time-consuming and error-prone throwbacks known to historians as spreadsheets.

Consolidated financial statements

Overall there are ten major benefits of using SAP BPC for consolidated financial statements: 

  1. Speed: The SAP BPC system can be planned, installed and begin operating rapidly – integrating easily with users’ source systems – whether these contain SAP or other data. SAP BPC then allows companies to close and disclose – shut the books and report – fast.
  2. Productivity: By reducing reporting time, the solution enables users to concentrate on matters such as strategy and analysing how and why events in their consolidated statements happened. It also allows more focus on doing the day-to-day work that keeps their businesses trading and allows them to expand.
  3. Efficiency: The source accounts will often contain transactions between group constituents and the consolidated statements must reflect only those with external parties. SAP BPC automates and streamlines consolidation processes, such as reconciliation and elimination, while maintaining strict controls.
  4. Accuracy: The process of producing consolidated statements often contains multiple stages – preparing data, collecting data, consolidating and reporting – and therefore numerous opportunities for things to go wrong if traditional means are used. The SAP BPC system reduces errors, including by vastly lowering the amount of human input required. The solution also allows businesses to alter data with ease, where necessary.
  5. Capacity: SAP BPC comfortably handles high volumes of financial information, across large organisations, such as multinational networks. The system also grows with companies’ evolving needs, absorbing figures from merged and acquired businesses easily and allowing users to add functionality without fuss.
  6. Consistency: There may be multiple ownership structures, including total parent company possession or one subsidiary having partly acquired another, which need to be reflected in the consolidated statements. SAP BPC provides single versions of the truth across entire organisations, avoiding the conflicting figures and resulting confusion common with manual methods.
  7. Real-time reporting: SAP BPC makes possible real-time reporting on data, in conjunction with SAP HANA, the world’s leading in-memory database management system.
  8. Currency conversion: A group may have operations in different countries, using various currencies and accounting standards, and some perhaps complex translating will be needed, as the consolidated statements must incorporate a single, overall group choice. SAP BPC readily translates values from multiple currencies in which entities such as group subsidiaries or segments may record results.
  9. Compliance: The solution adjusts straightforwardly to ever-changing management and regulatory requirements. It also provides compliance with complex, evolving accounting conventions, such as International Financial Reporting Standards and local Generally Accepted Accounting Principles, while permitting reporting in accordance with the XBRL global framework for exchanging business information.
  10. Transparency: SAP BPC allows organisations to strengthen investor relations, by maintaining transparent consolidation data and audit trails.

Perhaps the key advantage businesses secure from SAP BPC is the ability to make more effective decisions on areas such as cost management or reaction to market changes – which can be vital for their survival and prosperity – based on the data it provides.

It enables perceptive forecasting, through aids such as easily updated “what if?” analyses, predictive models and scenario planning. It also allows organisations to use collaborative tools, so they can secure advantages such as improving accountability and planning, plus better aligning plans with strategic goals.

SAP BPC guides users and permits dynamic analysis, using common reporting interfaces, such as Word, Excel, PowerPoint and the web. It facilitates hybrid development – plus enhanced visualisation, planning and predictive capabilities – with SAP Analytics Cloud.

The system is available as a service in the Opal Wave BPC Cloud, on which clients can literally Go Live in a Day™. This innovation makes the solution affordable by all sizes of enterprise, irrespective of sector. It is an alternative to the traditional on-premise option, requiring hardware and installation, which we also provide, versions of which are available for platforms including SAP NetWeaver and Microsoft.

We’ve worked with many household-name organisations on installing or upgrading SAP BPC, assisting them with intricate production of consolidated financial statements, and you can read some of these case studies including feedback from clients such as Scapa Group, a leading global manufacturer of bonding products and adhesive components for the healthcare and industrial markets.

Get in touch today to find more about how our team can help you with your consolidated financial statements or any other area of business planning and consolidation.