It is not uncommon to hear holding company accountants talk about the considerable number of hours they spend executing their financial consolidation processes, as well as the huge effort involved in preparing consolidated financial statements that comply with the regulations they are subjected to.
These complaints have not fallen on deaf ears at Microsoft, which now offers several solutions for financial consolidation through Dynamics 365 Finance. Below we explore some of the main issues facing accountants and the way Dynamics 365 Finance successfully responds.
1. Differences in charter of accounts across sites and countries
Dynamics 365 Finance’s online consolidation allows you to create a consolidation plan that can then be associated to each subsidiary’s charter of accounts.
If you use financial reports as your consolidation option, in the definition of rows, you can easily create the structure of the charter of accounts and then, in each row, indicate the accounting ledgers of the subsidiaries that must be included in the summation of each row.
2. Difference in subsidiary currency and consolidation currency
Dynamics 365 can convert currencies as part of the configuration of your ledger accounts. The system offers the following conversion options: closing exchange rate, average exchange rate or maintaining the transactional exchange rate. Balances will be presented during the execution of financial reports according to these definitions.
3. Differences in presentation structures
The row configurations available in the financial reports module of Dynamics 365 Finance allow you to create presentation structures for reports such as Financial Statements, Profit and Loss Statements, Statements of Changes in Net Equity and Cash Flow Statements.
4. Elimination adjustments
In addition to the classic option of having an adjustment company for eliminations, you can alternatively use the column configuration settings in the financial reports module to set up the transaction adjustments between associated subsidiaries, as well as transactions of minority interest.
5. Not all subsidiaries use Dynamics 365
If some of your subsidiaries’ accounting is not on Dynamics 365 Finance, you can use the Consolidate option to import and load the balances. You can also create that subsidiary as another company in the system and then load the balances of their accounting ledgers.
6. Validation of detailed information of the report balances
During the generation of financial reports, you can assign the level of detail you’d like to employ to review the balances allowing you to drill down from your own balances until you reach a detailed level of information regarding the accounting transactions of each subsidiary.