eBooks
Issue link: https://read.uberflip.com/i/999413
Next Generation Financial Consolidations for SaaS Companies 5 The traditional approach to consolidation, still used by many SaaS companies, is a blend of human capital, formalized, and in many cases manual, processes, and different technologies to bring the data and information together to form the basis for consolidation. The financial consolidation process in many of these organizations would follow a pa ern along the lines outlined in Figure 1. Figure 1: The Consolidation Process The close process is initiated with a detailed close calendar that sets target dates for each business unit to close their books and submit results to the corporate accounting group� It's common to see business units needing a week or more to close their books, which means that the corporate accounting group isn't able to start the consolidated close until a week or more a er the period ending date� The corporate accounting group will receive the results of the business unit, o en through offline mechanisms such as an email� Such submissions o en require a degree of manual manipulation to align the results of the various business units using harmonized accounting policies and account grouping structures—a painstaking process for the corporate accounting group� Some corporate accounting groups set up a consolidation entity inside the financial reporting system to separately house the consolidation and elimination journal entries. However, many others continue to rely on a simple spreadsheet tool for this purpose� Whether it's journal entries or separate columns and/or rows, the intercompany activities get eliminated, and the books for any acquisition related balances (e.g. goodwill) adjusted. The consolidated accounts are manipulated to put them into a financial reporting framework. This is o en the beginning of the "last mile of financial reporting." 4 1 2 3