A Case of Financial Consolidation

The Curious Case of Financial Consolidation
By frank.buytendijk on September 9, 2009 2:51 AM

One of the goals of a data warehouse is to provide a single source of the truth, as the basis of management information across the organization. Data is collected from various transactional systems, is integrated and aggregated, and made available through business intelligence tools and performance management applications. According to analyst firm Gartner, performance management comprises financial consolidation, financial reporting, scorecards, planning and budgeting, and profitability management.
However, many finance professionals question the need for a data warehouse as the source for their financial consolidation process, instead of linking financial consolidation directly to their general ledgers. They are right. I'll discuss why, from an architectural, procedural and practical perspective.

Architecture
Although financial consolidation is generally accepted to be an important, if not crucial, part of performance management, financial consolidation has some characteristics fundamentally different from other a management processes. In fact, as a management process it looks more like transactional process. Most management processes, such as plan-to-act or analyze-to-adjust are iterative of nature, and very hands-on. Users take an explorative view on the data, where one question leads to another. Financial consolidation, as part of record-to-report, in contrast, behaves more like transactional process, such as order-to-cash or procure-to-pay. Financial consolidation should be linear of nature, and as hands-off as possible. The level of automation and standardization should be as high as possible, to secure a reliable, auditable and repeatable process. As a consequence, for financial consolidation purposes there is no added value for adding the data warehouse as an intermediate storage stage in a further transactional process.


Procedural
Financial data has specific requirements regarding the chain of custody. It needs to be 100% accounted for, auditable and every step needs to be retraceable. Based on Sarbanex-Oxley regulations both the CFO and CEO need to personally sign for the accuracy of the information. Routing the financial data from the general ledger through the data warehouse before feeding it to the financial consolidation system is not only an unnecessary step, but it endangers the chain of custody. It introduces governance issues, as the data warehouse processes and houses many types of information owned by multiple business domains.

Practical
Due to US GAAP and IFRS regulations, financial data transformations are highly standardized. Although the ETL (extract-transform-load) or data integration tool used by the data warehouse may functionally be able to deal with the complexity of financial data transformation and integration, there is no point in reinventing the wheel, if this logic exists prebuilt in standard financial consolidation packages. Best-of-breed prebuilt functionality allows finance professionals to make allows finance professionals to make ledger-to-headquarters mapping decisions directly, and see the impact on the balance sheet balances, financial ratios and accounts. These requirements, particularly in multiledger environments, can live at odds with IT-managed complex ETL processes that should be focused on maximum control and stability.

Does this mean that the Finance department should be excluded from the data warehouse? Not at all. The majority of finance run processes, and a large part of finance-related information are managerial of nature. Operational management needs to have insight in the financial consequences of their operational decisions, and require financial management information. Financial management, in return, needs to be able to access operational management information, to gain insight in the business' value drivers, and as such improve and maintain financial predictability. Also from a planning perspective, operations and finance need to be integrated. Financial and operational information both belong in the data warehouse, in an integrated manner.
Once it is understood that financial consolidation is fundamentally not a management process, but an operational process, the architectural issue disappears. The financial consolidation system, like any other transactional system, should be seen as a source to the data warehouse. This might raise the issue of timeliness. Financial consolidation takes time, and other types of data might be routed into the data warehouse sooner or with a higher periodicity. That problem can be solved like with any other source system; distinguishing between preliminary and final data loads.

Keeping financial consolidation outside the data warehouse architecture is not an 'exception to the rule', but a matter of architectural soundness, combined with an understanding of governance issues and simply a practical solution. Key to keeping the architecture 'clean' is the understanding that financial consolidation is not a management process, but transactional of nature.

Source: By frank.buytendijk

financial consolidation

Hyperion Financial Management- Demo

This is a 30 minute demonstration of the Consolidation solution - Hyperion Financial Management.

Demo: Oracle Hyperion HFM

Source: Pureapps

IBM Cognos 8 Controller - Whitepaper

IBM Cognos 8 Controller provides Finance organizations with unmatched capabilities for managing the close, consolidation, and reporting process. An automated, menu-driven application that is owned and managed by Finance, IBM Cognos 8 Controller can consolidate diverse ledgers representing thousands of operating units and accounts into a common chart-of-accounts structure

IBM Cognos 8 Controller - White paper

Source:
www.oraclehyperion.co.uk

Cognos 8 Controller - Brochure

Cognos Controller 8-Brochure


Consolidate thousands of operating units and accounts into a common chart-of-accounts structure.

Overview

IBM® Cognos® 8 Controller helps your finance organization manage the close, consolidation and reporting process.Automate your entire close process, from data collection to financial consolidation to output. Reduce close cycle times, assure data integrity and gain the transparency that is essential for sustained compliance with Sarbanes-Oxley and IFRS.

•Reduce consolidation, close and reporting cycles by days or weeks—with a single version of the facts and automated validation.

•Consolidate multiple ledgers with thousands of operating units and accounts into a common chart-of-accounts structure.

•Create reports rapidly to facilitate compliance with IFRS (International Financial Reporting Standards) and Sarbanes-Oxley Section 404.

•Evaluate financial results with confidence and accuracy across multiple countries, currencies and legal entities, each with their own accounting policies intact.

•Support better planning and forecasting with reliable consolidated management data, based on a clear link between statutory and management consolidation.

Product Highlights

•Sophisticated, global consolidation functionality —to handle multiple reporting and consolidation standards such as IAS and US-based GAAP; inter-company elimination and reconciliation; multicurrency translation; complex ownership calculations and financial consolidation rules.

•Fully aligned with Microsoft Excel —users can log in to Controller for data collection or distribution from any location at any time though a familiar Excel interface , accessing financial information as their security levels allow .

•Adaptable to your unique requirements —in addition to management and statutory dimensions, Cognos 8 Controller provides user-defined dimensionality that supports data collection and reporting on all levels including cost center, product, and customer.

•Deployable by finance with IT appeal — Controller can be configured and maintained by financial professionals with minimal IT support. Using the most advanced and scaleable Web and relational data storage, users can input, consolidate and access data quickly and securely.

•Add other capabilities as your needs require —The industry's most comprehensive and award-winning planning, scorecarding, reporting, and analysis solutions from Cognos integrate seamlessly with Controller to help you manage your performance even more effectively.


Cognos Controller 8-Brochure

Business Object Finance - An Overview

Technology can be used to achieve both quick and big wins, and understanding the options is a critical part of fast close project planning. It’s vital to align the use of technology with the organization’s resources and needs, focusing on what can be achieved in a defined time frame. For example, the combination of implementing a standard chart of accounts (SCOA) in a new single instance enterprise resource planning (ERP)/general ledger (GL) may be far too time-consuming and expensive for even the largest and most technology-rich companies. However, the benefits of making improvements to an existing consolidation engine or implementing a new functional and high-performance consolidation engine, to collect and consolidate results, are still achievable within the time frame of a fast close project.

Consolidation engines like BusinessObjects™ Finance, part of the BusinessObjects EPM XI suite, can offer significant advantages and make numerous quick wins possible.

BusinessObjects Finance is the world’s fastest statutory consolidation and management reporting solution, providing the office of the CFO with the processing power, agility and breadth of analysis needed to complete financial consolidation and reporting cycles faster. It delivers full process control and data transparency, allowing users to simulate unlimited scenarios to address all performance management reporting requirements.

They have identified five key focal points to help speed the closing cycles. These can be achieved through improvements to current applications as quick wins, or by defining what you may need from future investment in a performance management suite.

Peer-to-Peer Intercompany Reconciliation
Applications like BusinessObjects Intercompany are now available as standalone solutions or as part of integrated suites to facilitate online peer-to-peer intercompany reconciliation. They can often be implemented alongside existing consolidation applications and, due to the centralized nature of their deployment, can be implemented very quickly and at relatively low cost, resulting in dramatic reductions in the close time and generating significant ROI.

Integration With Source Systems
Systems like BusinessObjects Finance—which can intelligently cope with multiple reporting channels, differing charts of accounts, account flows, and analysis dimensions over time—offer significant advantages. By retaining past reporting frameworks within the system, finance professionals
can safely adapt to changing needs without having to rebuild or destroy previous
reporting scenarios.

Data Entry and Validation
By leveraging functionality in consolidation applications like BusinessObjects Finance, it’s possible to ensure data quality at every level of a corporate reporting cycle and guarantee that the incoming information not only respects the timing and expected format, but also that it makes sense,
is consistent, complete, commented appropriately, and goes through the right
auditable approval process. This leads to greater quality and a “right first time”
approach to the closing cycle—which reduces the need for late adjustments and
additional data submissions and speeds the review and variance analysis process
by ensuring narrative is provided where required. Consolidation systems such as
BusinessObjects Finance, which offer this data entry and validation capability, also
enable you to monitor and record the performance of the various contributors to
the close process. It’s long been said that what gets measured, gets managed—
and that is just as true for the close process as for any other activity.

High Performance Consolidation Application
As the adoption of web-based consolidation applications has increased over the past five years, so has the importance of their performance in the closing cycle. BusinessObjects Finance that allow and perform simultaneous consolidation processing on the database rather than the application server, and which don’t compromise the audit trail, users can experience consolidation times that are up to five-times faster than competing products and run fewer iterations.

Process Automation
BusinessObjects Finance, however, take automation to the next level, introducing built-in financial intelligence to further speed the close cycle. BusinessObjects Finance has built-in rules logic that automates consolidation entries. Currency translation adjustments, minority interest and equity calculations, intercompany reconciliations, and automatic cash flows are easily set up through a standard user interface and intuitive wizards that don’t require Visual Basic programming skills. Because the applications also understand the life and challenges of finance departments, they can handle multiple reporting channels with different charts of accounts, and different account flows or analysis dimensions over time. It’s also possible to manage the retention of past reporting frameworks so finance professionals can safely adapt to ever-changing financial needs without having to copy and paste, rebuild, or destroy their previous reporting scenarios.

Source: Business Objects

IBM Cognos 8 Controller - An Overview

IBM Cognos 8 Controller provides Finance organizations with unmatched capabilities for managing the close, consolidation, and reporting process. An automated, menu-driven application that is owned and managed by Finance, IBM Cognos 8 Controller can consolidate diverse ledgers representing thousands of operating units and accounts into a common chart-of-accounts structure.

IBM Cognos 8 Controller reduces close cycle times and gives you the transparency that is essential for sustained compliance with Sarbanes-Oxley and IFRS. It supports local, regional, or global requirements, and enables you to adapt to business and regulatory changes in real time.

What IBM Cognos 8 Controller Offers to Finance Leaders
IBM Cognos 8 Controller offers critical benefits for the key members of your finance team—and for the CIO, who needs to ensure compatibility with existing IT investments:

For Corporate Controllers:
IBM Cognos 8 Controller enables the corporate controller to automate the entire close process, from data collection to financial consolidation to output. Close cycle times are reduced while data integrity is assured.

For the CFO:
IBM Cognos 8 Controller reduces risk and provides the CFO with an enterprise view of key financial ratios and results. Greater visibility improves strategic decision making across the organization, while the high quality of financial results eases external reporting and compliance.

For the CIO:
IBM Cognos 8 Controller allows the CIO to leverage current IT investments while ensuring that centralized systems meet the demand for secure and reliable data. And it offers the opportunity for performance management standardization from a single vendor, with enterprise planning and business intelligence across a single architecture and platform.

Source: COGNOS

IBM Cognos 8 Controller - DEMO

IBM Cognos 8 Controller is the only solution that includes more than 200 pre-configured, standard reports to satisfy the demands of management and regulators. All the reports required at key stages of the close process are available automatically—no custom report creation is needed.

Cognos Controller DEMO

IBM Cognos Controller

IBM Cognos 8 Controller provides built-in financial intelligence and advanced analysis capabilities to deliver on today’s consolidation requirements. The Web-based platform provides centralized, synchronous financial consolidation. It compresses the time to close, ensures accuracy, and ensures that the business controls directly impacting your corporate reporting process are effective.

You gain true and reliable consolidated financial data, based on a clear link between statutory and management consolidation, which provides a solid foundation for your operational and strategic decisions. IBM Cognos 8 Controller gives you a many-fold advantage in addressing compliance needs:
• Automates the consolidation process.
• Compresses closing times.
• Accelerates reporting times.
• Significantly reduces the risk of financial reporting errors.
• Minimizes compliance costs.

The multi-dimensionality of Controller offers enormous potential. It provides us with excellent support for our extensive management reporting. All necessary eliminations and adjustments can be performed at an operative level as well as at an organizational level to reflect the current structure.

Key Features of Cognos Controller

Application approach
Directly managed by finance, not by IT, for rapid implementation. Eliminates extensive development and programming that adds complexity. Simplifies and automates the definition, structure, and rules of the consolidation process.

Single, accurate, corporate view of key information
Consolidates multiple, diverse ledgers with thousands of operating units and accounts into a single, common, chart-of-accounts structure.

Sophisticated, global consolidation functionality
Provides inter-company elimination and reconciliation, multi-currency translation, complex ownership calculations, and financial consolidation rules to handle multiple reporting and consolidation standards.

Leverages existing assets
Integrates data from existing ERP, transactional, and desktop systems.

Provides reporting and analysis on controls and transparency into information
Mitigates risk and delivers accurate information to support compliance requirements

Built-in finance consolidation intelligence
Includes pre-defined consolidation functionality and reports that incorporate best practices for managing the consolidation of financial information and delivering external management and corporate reporting.

Adaptable to unique requirements
In addition to statutory dimensions, Cognos Controller provides user-defined dimensionality to support collection and reporting at all levels including cost center, product, and customer.

Real-time adjustment to meet new business, environment, or legislation changes
Easily and rapidly accommodates changes such as mergers and acquisitions as well as reorganizations.

Infor PM Financial Consolidation

Infor PM Financial Consolidation helps you streamline the process for closing the books, while providing transparency and business value to your organization. You can confidently address both local and global reporting standards and regulations such as IFRS, IAS, GAAP, and the Sarbanes-Oxley Act.

You can learn more about Infor’s Performance Management solutions by viewing these 5-minute demos. For more information about any of these products, click on the link at the end of the demo to contact

DEMO at:
Infor PM Financial Consolidation

Financial Consolidation- Infor

FDC- from infor
Source: www.infor.in


Powerful Consolidation Application

Extensity is now part of Infor.

Visit the Infor site to learn how Infor software will make a difference in business today.

Infor recognize that different organizations require different consolidation solutions, depending on their financial and IT structures. In addition to performance management financial consolidation functionality, built on a centralized architecture, Infor offer FDC, a powerful consolidation application designed for businesses that have autonomous reporting units and/or subsidiaries. FDC uses a distributed application architecture in which each reporting site has its own database, for local data ownership and maximum flexibility. Each unit within the organization can perform sub-consolidations and produce their own financial statements in different GAAP formats, according to local requirements.

FDC streamlines consolidation and reporting so that managers have more time spend on analysis and strategic planning. It automates consolidation from multiple locations, in multiple general ledgers and charts of account, and in multiple currencies.

FDC has been architected to deliver all your reporting requirements. This includes management, legal, statutory, and regulatory reporting requirements from a local and global perspective, incorporating support for International Accounting Standards (IAS), US GAAP, Canadian GAAP, UK GAAP, FASB, and more.

With FDC you can:
 Collect data quickly from multiple general ledgers and multiple charts of account
 Allow remote sites to extend the application for local reporting without impacting the group application
 Support local and multiple base currency reporting
 Consolidate multiple hierarchies (legal, management, etc.) and multiple versions of the same structure
 Match intercompany account activity at the appropriate rate and report discrepancies
 Carry out automated adjustments including minority, inter-company, recurring, and miscellaneous
 Keep a complete audit trail of all adjustments and journal entries which can be interrogated by the pre-built reports

Architecture and Technology:

FDC is a distributed solution in which each remote site maintains its own Pervasive SQL 2000 Server database. Within each site, all data is stored in a secure, central relational database, eliminating errors due to data duplication and transfer. FDC was created specially for finance professionals and requires only minimal IT involvement to implement and maintain. A code-free web interface simplifies data entry, so finance staff can add and delete accounts, change organizational structure and perform ad hoc analysis as required. The application is completely menu and form driven, eliminating the need to create complex macros or assemble logic files. FDC can be delivered across an entire organization through either a LAN or the web.

Three optional modules are available to enhance the value of FDC:
 Planning - For carrying out 'What If" analyses, evaluating financial plans, and setting top-down targets
 FDC Web Workstation - For delivering end user reports and analyses via a web browser. This module allows end-users to create and save their own analyses without the need of IT/Finance staff support.
 Production Reporting - For automatic production and delivery of formal reports to users in a variety of formats.

System Requirements:



More at :
FDC- from infor