6 Ways Consolidation Functionality Can Transform Planning

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For many organizations, the budgeting and planning process is the initial driver for adopting packaged enterprise performance management (EPM) applications. 

Purpose-built EPM applications for budgeting and planning include workflow, process management, and other pre-built functionality designed to streamline budgeting, planning, and forecasting. 

And for many organizations, financial consolidation is often viewed as a separate process and system  that may be required when the reporting requirements become more complex.  This can include consolidating financial results from multiple systems or subsidiaries, expanding internationally, growing via acquisition, or preparing for an IPO.  But there are often instances where financial consolidation functionality is needed to support the budgeting and planning process. 

Using Consolidation Functionality in Budgeting and Planning

A recent white paper written by BPM Partners highlights the need for financial consolidation functionality in the budgeting and planning process.  The white paper cites 6 specific cases where the FP&A team would benefit from robust financial consolidation functionality:

  1. Intercompany eliminations
  2. Alternate rollups and hierarchies
  3. Complex allocations
  4. Currency conversion scenarios
  5. Journal entries on budgets
  6. Auditability of budgets and forecasts

In the white paper, BPM Partners states, “Financial consolidation functionality can play a key role in making corporate budgets more accurate, faster, and easier to create.  If consolidation capabilities such as intercompany eliminations and alternate rollups are not available in their budgeting and planning solution, companies usually resort to work-around methods or make do with rudimentary capabilities that can be tedious and promote errors.  In such instances, it can be difficult to create an accurate corporate budget that supports the organization’s structure and its reporting requirements in different jurisdictions.”

The Value of a Unified Solution

bigstock-Two-men-discussing-laptop-pres-84887885.jpgBPM Partners then goes on to highlight the advantages of having robust financial consolidation and budgeting functionality in a single, unified system.  These advantages include the ability to address the requirements highlighted earlier, as well as being able to streamline performance reporting.  Having the actual and budget data in the same system, in the same format (e.g., accounts, currency, scale, etc.), makes actual vs. budget reporting much easier than if they’re in separate systems. 

Overall, this approach shortens the reporting cycle and reduces the risk of errors, especially when there are consolidation adjustments or eliminations to be made during the process.

In its final conclusions, BPM Partners states, “Organizations that require these capabilities should select a vendor that has depth of experience in financial consolidations, and a CPM platform that combines planning and budgeting with mature, detailed consolidation functionality.  The result will usually be a faster, more accurate budgeting and planning process.  In addition, the performance management roadmap for the company may require actuals consolidation.  It makes economic sense to purchase a budgeting solution that has the potential to easily expand into consolidation as the needs of your company grow.

Host Analytics, a Leader in Financial and Strategic CPM

Host Analytics fully embraces the ideal of providing a unified solution for budgeting and planning, as well as financial consolidation and reporting.  Our cloud EPM platform was designed in this fashion, and hundreds of our customers are taking full advantage of this breadth of functionality. 

Further evidence of this is the recent recognition we received from Gartner as a leader in both of its Magic Quadrant reports for cloud strategic and financial corporate performance management solutions.  So not only do we provide complete coverage across budgeting and planning, as well as financial consolidation – we provide market-leading functionality in both areas.

Learn More 

To learn more about the advantages of using financial consolidation functionality in budgeting and planning, download and read the BPM Partners white paper

Download the White Paper

Posted by on August 3, 2017
Topics: Budgeting
John O'Rourke

John O’Rourke is Vice President of Strategic Marketing at Host Analytics. With a background in accounting and finance, John has over 30 years of experience in the software industry and 20 years of experience in EPM product marketing at Hyperion Solutions, Oracle and Host Analytics. He has worked with many customers and partners on financial reporting and planning initiatives and has spoken and written on many topics in EPM. John has also held positions in strategic marketing and product marketing at Dun & Bradstreet Software, Kenan Systems, and Decisyon. John has a BS degree in accounting from Bentley University and an MBA from Boston College.

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