Why the need for financial consolidation?

The needs and requirements for an “Integrated end-to-end Financial Close and Reporting Solution” are ever increasing. According to the US GAAP, an enterprise is required to consolidate all the subsidiaries for which the parents control over 50% of the voting interest.  The parent and its subsidiaries are treated as one management and one economic entity for financial reporting purpose. Per SFAS 94, this includes domestic, foreign, similar, and dissimilar subsidiaries.

Streamlining Financial Consolidation in BPC

Madiba Inc. solution for Financial Consolidation automates and streamlines financial consolidation activities to support a faster close while providing improved regulatory compliance.

The SAP Business Planning and Consolidation solution (BPC) is a critical component of SAP’s EPM (Enterprise Performance Management) portfolio enabling enterprises to consolidate financial information based on the respective accounting standards such as US GAAP, IFRS, etc. This allows the enterprise to report its financial data accurately, timely and consistently.

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Business benefits for BPC Legal Consolidations model

Standardized consolidation process across the entire organization which is spread throughout all subsidiaries
Enhanced collaboration through the application of business process flows for a controlled consolidation
Improved analytical and decision-making capabilities through dynamic reporting along with drill down
Provide a single interface for the collection of data and information, the reporting & analysis of that data, and the distribution of the information to the appropriate people
Real time results of the consolidated financial statement
Move employee knowledge into centralized system
A single tool to manage and train users on a common legal consolidation process
Increased transparency and standardized formula’s through distributed input templates and logic files
Analysts can create ad-hoc reports to drill further into data
Reduces risk of manual and spread sheet errors

What happens after Legal Consolidation?

Once the Legal Consolidation (LC) process is completed, the LC data (i.e. “Single Truth” concept) will form the baseline for the Management Reporting (MR) model for further and in-depth market and product categorization and analysis.

Our objectives

Present financial results by site on a management basis
Adjusts revenue and COGS to reflect third party results
Allows for segment and market allocation if needed
Record Non-GAAP adjustments
Balance sheet allocations

Process

The process commences with journal completion and allocation in the Management Reporting (MR) model. Upon completion of Journals and Allocations in the Management Reporting (MR) model, the results can be locked and released for analysis and reporting purposes by both corporate and local legal entities. As the MR model and data are based on validated Legal Consolidation results, data accuracy and consistency in analysis and reporting is ensured.

Moving from financial consolidation to MR

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