AccountsIQ has published a guide on the pitfalls to avoid when creating consolidated accounts.
Many mid-sized organisations chose to consolidate group accounts using spreadsheets, the cloud software developer notes. This can save money, but is a false economy when time and control issues are taken into account.
The accountsIQ guide explores some of the problems spreadsheet consolidations run into in more detail:
- Hidden formulae can make it difficult to spot problems on spreadsheets
- Spreadsheets struggle with the partial ownership issues such as minority interests and groups within groups that are common in group companies
- Accuracy issues may arise around spreadsheets used to track multi-currency trading because of the need to ensure every subsidiary is using a common daily exchange rate
- Apportioning shared costs across a group structure is complicated and entering journals throughout the group can be time consuming.
According to accoundsIQ UK managing director Darren Cran, cloud accounting software can replace consolidation spreadsheets by putting a permanent structure in place to collect group financial results. Changing the process in this way can save up to a full week for finance managers, he claimed.
As well as highlighting the most common issues around spreadsheet use, the guide sets out the ways cloud accounting can support consolidation processes:
- Managers can access final consolidated reports in real time, avoiding mistakes and security risks caused by multi-user editing of spreadsheets
- Faster inter-company transactions and apportionment of shared costs: inter-company transactions can be completed in minutes
- Real-time data collection to enhance the analysis process and speed up decision-making.
Download the full accountsIQ guide to find out more about how cloud systems can improve group accounts consolidation processes.