Why consolidating your group’s financials is so critical (and why most groups battle to get it done)
Most companies have a fairly good grip on analysing monthly reporting packs of their various businesses. What doesn’t happen quite so regularly and properly is preparation and review of the group’s financial position and performance. After all, the whole point of managing a group of companies is to unlock value in the group and not to simply manage the individual entities.
Most group companies tend to have homogenous entities where stock and other assets can get relatively freely transferred to where they’re needed. Banks also take security on a group basis where possible and institute covenants at an individual and group level. So if you’re not analysing your group numbers you’ve probably got a massive blindspot in your business.
So why not just do it?
Well considering that your average group is probably made up of between 5 and 10 companies, an operation or two in a foreign denominated currency and the possibility of a joint venture or partly held subsidiary and you start getting an idea of how things start getting cumbersome and technically difficult to prepare. Throw in an under resourced accounting department and a really bad tool for financial reporting (think MS Excel here) and you have a complete non starter from a reporting perspective. There are a large number of groups out there that we’ve come across that only report consolidated numbers quarterly or semi annually or just not at all.
Tools currently available are either extremely difficult to implement or cost and arm and a leg. Quick Consols solves both these problems with a fixed monthly subscription per company and an easy to set up interface that doesn’t require a PHD in rocket science. Check it out and try it for free for yourself. www.quickconsols.com