Today's enterprises do not have
a simple structure with multiple business entities at multiple geographies,
large number of joint ventures, subsidiaries, acquisitions, de mergers etc. and
all this is adding to complexities of financial reporting. Add to this,
different currencies, legal requirements, ever changing leadership formats of
reporting and you have a substantial challenge in front of you.
A typical structure of a large
transnational organization will have parent organization with multiple
subsidiaries and some of these subsidiaries would have acquired few other
companies which might have their own subsidiaries in few countries. Then there
will be different business lines or verticals which operate independently or
have joint ventures. Now, consolidating the financial data from all these
entities is a challange and most of the time your transactional system or ERP
will not be able to help in this specially if more than one system is being used
in these entities. Another important point is that the business intelligence
tools will also not be able to help in giving the correct information as data is
available in piece meal and the real picture is not captured.
While deploying a business
intelligence solution, it is imperative that our data is first consolidated with
the help of either a financial consolidation tool or the module of the
Enterprise Performance Management tool you have deployed. The major benefits of
data consolidation will be:
-
Get a single source of truth: These provide a single version of the truth to support financial management and statutory reporting
-
Accelerate reporting cycles: Substantially reduce the period closing cycles and deliver more timely results to internal and external stakeholders across the globe
-
Improve transparency and compliance: Helps reduce the cost of compliance (as stipulated by the Sarbanes-Oxley Act, IFRS, electronic filing, and other regulatory requirements) and support disclosure requirements, such as sustainability reporting
-
Perform strategic analysis: You will spend less time on processing and more time on value-added analysis
- Aligning the enterprise with its KPIs
- Assist leadership take faster and fact based decisions
- Simulation of scenarios and doing what if analysis
- Allocation and re-allocation of costs and overheads across entities without distrubing the transactional system entries
- No need to look at multiple sources of data
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