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

19 responses to “6 Ways Consolidation Functionality Can Transform Planning”

  1. Jean Dane says:

    If you are looking at replacing both your consolidations and planning system it would make sense to purchase one that can do both . Than there is no need to duplicate your allocations, eliminating entries etc in both systems.

  2. David Cannon says:

    We don’t currently use consolidations but this article is making me reconsider our stance.

  3. Janet Golla says:

    Our current consolidation process is clunky and Excel-based. This sounds like the perfect solution.

  4. Cindy says:

    I definitely agree that if your organization needs consolidation, it should be in the same tool that you budget. It makes all processes more efficient and centralized.

  5. andrea says:

    I think consolidation would help streamline a lot of processes and better establish a single source of truth.

  6. Kate Sedam says:

    we don’t use consolidation, but sounds helpful

  7. Jarrod says:

    I’m all for anything that shortens the reporting cycle and reduces the risk of errors.

  8. Nikola O says:

    Currently improving our consolidation process. We intend to reach out to teams who used Host to acomplish automation.

  9. courtney says:

    Our current consolidation involves the use of multiple systems which is time consuming as you are often duplicating work in more than one place. To replace both consolidations and planning systems it would make sense to purchase one that can do both, but you also run into issues in that most systems do not provide all functionality needed.

  10. Nicole says:

    I agree that this approach shortens the reporting cycle and reduces the risk of errors.

  11. Nikita says:

    Interesting article. Might be a good opportunity to explore here more.

  12. Jamie says:

    I think i may be convinced on using consolidations now. Seems like a great idea

  13. Rahul says:

    Consolidation is a key part of planning

  14. Lauren Mazzone says:

    We utilize this functionality for our cash flow and net working capital reporting.

  15. Jeremy Zhao says:

    Having the EPM take care of all aspects of consolidation is very useful. There’s one place to go to troubleshoot or make adjustments.

  16. Pam says:

    A unified solution would greatly reduce the amount of back and forth that we currently struggle with working with multiple systems. Having data in the same format would streamline the process and significantly reduce time.

  17. Monica Erin says:

    having all of our information solely in Host definitely helps collaboration across various teams

  18. Zach says:

    “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.” – couldn’t agree more

  19. Hunter Scrivner says:

    Having the ability of our full team to work on a forecast concurrently saves us a ton of time.

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