Why Automate Financial Consolidation?
Traditional financial consolidation methods involve:
- Collecting trial balances from multiple entities
- Performing manual adjustments, eliminations, and inter-company reconciliations
- Generating consolidated reports and disclosures
Challenges with this method:
- Time-consuming closing cycles
- High risk of human error
- Lack of audit trails and data lineage
- Limited visibility for stakeholders
Automation paired with analytics solves these problems by streamlining data flow, standardizing calculations, enabling dynamic reporting, and ensuring compliance.
Automation Opportunities in Financial Consolidation
✅ Data Collection: Use SAP Data Services, SAP Datasphere, or RPA tools to automate data ingestion from subsidiaries, both SAP and non-SAP.
✅ Inter-company Eliminations: Pre-configure rules for eliminations (revenues, expenses, payables/receivables) in SAP Group Reporting or BPC to eliminate manual work.
✅ Currency Translation: Set-up automated FX conversion rates and translation logic for accurate financial reporting.
✅ Journal Adjustments and Validations: Use predefined rules and workflow approvals to automate validation of adjustment entries.
✅ Consolidated Reporting: Leverage SAC or SAP Fiori dashboards to deliver real-time reports and visualizations across group companies.
Real-World Example: Automated Consolidation in SAP
Let’s take an example of a diversified holding company with 12 subsidiaries across 4 countries.
- Before Automation:
- After Automation with SAP Group Reporting
The Verdict?
Automating financial consolidation is not just a technology upgrade — it’s a strategic transformation. By combining the power of SAP’s robust ERP and consolidation tools with modern analytics, organizations can close faster, report smarter, and plan better.
If your finance team is still chasing spreadsheets or spending weeks closing the books, it’s time to consider automation powered by SAP + Data Analytics.
