Financial consolidation is a key stage in the group financial close process. It brings together financial data from different entities to provide a consolidated view of the group’s performance.

However, many organizations still rely on numerous manual activities for consolidation, including data collection, checks, adjustments, currency conversions, intercompany eliminations and reporting preparation.

As the number of entities increases, these activities can quickly become complex and time-consuming.

Financial consolidation automation directly addresses this challenge. With the right EPM (Enterprise Performance Management) solution, companies can structure their processes, automate recurring tasks and improve data reliability.

So, which stages of financial consolidation can be automated, and how can organizations implement an effective approach ?

Why Automate Financial Consolidation ?

Financial consolidation generally involves multiple stages that must be coordinated across subsidiaries, Finance teams and group Finance management.

When these activities are primarily performed manually, several challenges can arise:

Significant time spent collecting data.
Increasing numbers of Excel files.
Manual adjustments and restatements.
Risk of errors.
Difficulties tracking changes.
Lengthy and repetitive checks.
Limited visibility into financial close progress.
Long delays in producing consolidated financial statements.

Automation reduces manual activities and helps standardize the process.

The objective is not to eliminate human oversight, but to enable Finance teams to focus more on analyzing and validating results.

Which Stages of Financial Consolidation Can Be Automated ?

Not every stage offers the same automation potential. However, a significant part of the process can be structured and automated using an EPM solution.

1. Financial Data Collection

The first step is to collect the data required from the group’s different entities.

In a manual process, subsidiaries may submit their information in different formats, sometimes using Excel files.

This approach can lead to:

Data collection delays.
Formatting issues.
Missing information.
Multiple versions of the same file.
Additional validation work.

An EPM solution can connect different data sources and centralize the information required for consolidation.

Data can then be imported according to predefined rules and formats.

Result a more structured data collection process that relies less on manual exchanges.

2. Data Checks and Validation

Before consolidation begins, the data must be checked.

This may include verifying:

Data consistency.
Relevant accounts.
Reporting periods.
Currencies.
Missing information.
Unusual variances.
Applicable business rules.

An EPM solution can incorporate validation rules directly into the process.

Anomalies can therefore be detected earlier and sent to the relevant teams before consolidation begins.

This helps prevent errors from being discovered too late, after several processing stages have already been completed.

3. Currency Translation

For international groups, currency translation is an important stage of consolidation.

Individual entities may report their financial data in local currencies, while group reporting must be produced in a common consolidation currency.

An EPM solution can automate the application of exchange rates and translation rules defined by the group.

This reduces manual calculations and standardizes the treatment of data across entities.

4. Intercompany Eliminations

Intercompany transactions are often a major source of complexity in consolidation processes.

Transactions between companies within the same group must be identified and eliminated to prevent consolidated revenue, expenses, receivables or liabilities from being overstated.

Automation can help:

Identify intercompany transactions.
Match data between entities.
Detect discrepancies.
Apply elimination rules.
Track exceptions.

Finance teams can then focus on discrepancies that genuinely require further analysis.

5. Consolidation Rules

Groups may apply different rules depending on their organizational structure and accounting frameworks.

An EPM solution allows these rules to be formalized within the consolidation process.

This may include managing:

Consolidation scopes.
Ownership interests.
Consolidation methods.
Eliminations.
Adjustments.
Specific accounting restatements.

The benefit is that processing becomes more systematic and repeatable.

6. Approval Workflows

Consolidation involves more than calculations.

It also requires several approval stages involving subsidiaries, Finance teams and group management.

An EPM workflow can track:

Tasks to be completed.
Assigned owners.
Submitted data.
Approvals.
Anomalies.
Overall process progress.

Teams gain a clearer view of the financial close process and can identify potential bottlenecks more quickly.

7. Reporting Production

Once the data has been consolidated, Finance teams must produce reports for management and other stakeholders.

When reports are prepared manually, teams may need to export, adjust and reformat data.

With an EPM environment, reports can be generated directly from consolidated data.

This helps to:

Reduce manual adjustments.
Accelerate report production.
Use standardized formats.
Improve consistency across reports.

Automation Does Not Mean Eliminating Controls

Financial consolidation automation should not be confused with a lack of oversight.

On the contrary, an automated process should make it possible to strengthen data controls.

Rules can be designed to detect:

Significant variances.
Missing information.
Inconsistencies between entities.
Unusual fluctuations.
Intercompany discrepancies.
Issues with the consolidation scope.

The objective is to evolve the role of Finance teams. Instead of manually checking every data point, they can focus their efforts on exceptions and higher-value analysis.

What Are the Benefits of Financial Consolidation Automation ?

Automating financial consolidation can deliver several benefits.

Reduce Time Spent on Manual Tasks

Teams spend less time collecting, transforming and adjusting data.

Accelerate the Financial Close

Automated processing reduces the time between data collection and the production of consolidated results.

Improve Data Reliability

Validation rules and standardized processes reduce certain risks associated with manual data handling.

Improve Traceability

Automated processes make it easier to track data, processing activities and approvals.

Standardize Processes

Different entities can work with shared rules and workflows.

Free Up Time for Analysis

Finance teams can devote more time to performance analysis and supporting business decisions.

Why Is EPM Well Suited to Financial Consolidation Automation ?

EPM is particularly well suited to consolidation because it brings together several aspects of financial performance management within a single environment.

Depending on the solution selected, an EPM environment may cover:

Financial consolidation.
Financial close.
Reporting.
Planning.
Forecasting.
Workflows.
Controls.
Performance analysis.

This helps avoid managing each process in a separate tool, which can increase the number of interfaces and manual adjustments required.

EPM can therefore act as a performance management layer that complements the ERP.

ERP and EPM: What Is the Role of Each ?

Automating consolidation does not necessarily mean replacing the ERP.

The two environments serve complementary purposes.

ERP

The ERP generally acts as the system of record for operational processes and transactional accounting data.

EPM

EPM focuses more on:

Financial consolidation.
Reporting.
Planning.
Forecasting.
Financial analysis.
Financial close processes.

Effective integration between ERP and EPM allows data to flow automatically between the two environments.

How to Successfully Automate Financial Consolidation

Technology alone is not enough.

Before introducing automation, organizations need a clear understanding of how their current consolidation process works.

1. Map the Existing Process

Identify:

Data sources.
Manual activities.
Controls.
Adjustments and restatements.
Approval stages.
Reports produced.

This mapping helps identify the main sources of complexity.

2. Prioritize Processes for Automation

Not every activity needs to be automated immediately.

It is often best to start with tasks that are:

Repetitive.
Time-consuming.
Heavily dependent on Excel.
Prone to errors.
Easy to standardize.

3. Define Business Rules

Consolidation rules must be clearly documented before they are automated.

This helps ensure greater consistency across the group’s entities.

4. Prepare the Data

Automation requires structured and sufficiently reliable data.

Organizations should therefore review their master data, formats, mappings and data quality rules.

5. Support Users Through the Change

Finance teams should be involved in defining the target processes.

The transformation is not purely technical; it also affects working methods and responsibilities.

Which KPIs Should Be Tracked After Automation ?

Several KPIs can be used to measure the effectiveness of the project.

Examples include:

Total consolidation cycle time.
Financial close duration.
Time spent on adjustments and restatements.
Number of automated controls.
Number of errors detected.
Number of Excel files used.
Number of manual tasks.
Time required to produce reports.
Number of interventions required to correct data.

These indicators help measure the benefits achieved and identify further opportunities for improvement.

Financial Consolidation Automation : A Driver of Finance Transformation

Automation should not be viewed as a standalone IT project.

It can help transform the role of the Finance function.

When teams spend less time collecting and adjusting data, they can focus more on:

Analyzing results.
Identifying trends.
Investigating variances.
Managing performance.
Supporting operational management.
Preparing strategic decisions.

Financial consolidation then becomes less of an administrative sequence of tasks and more of a structured process that supports financial management and decision-making.

The BHI Consulting Approach

BHI Consulting supports companies in their Finance transformation initiatives and EPM implementation projects.

Our approach involves analyzing existing consolidation processes, identifying activities that can be automated and defining a target operating model that meets the group’s needs.

We work with EPM environments such as OneStream and CCH Tagetik, connecting them with ERP systems and other enterprise data sources.

Our objective is to build a consolidation process that is more automated, more reliable and more transparent, while enabling Finance teams to retain control over business rules and validation procedures.

Conclusion

Financial consolidation automation addresses several key challenges: reducing manual work, accelerating the financial close, improving data reliability and strengthening process traceability.

With an EPM solution, companies can automate a significant portion of data collection, validation, currency translation, eliminations, workflows and reporting.

However, success depends above all on understanding existing processes, maintaining high data quality and involving Finance teams throughout the project.

Looking to automate your financial consolidation process? Contact our experts to discuss your project and identify the improvement opportunities best suited to your organization.