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Consolidations

This training content is for advanced users


Reportance enables you to consolidate the data from more than one dataset into a single consolidated dataset.


This can be used when dealing with multiple entities, and grouping data in order to produce consolidated reports for managing, or even for producing formal consolidation financial statements for financial reporting statements.


It can also be used in simpler cases where you have a single entity, but accounting information for different divisions or business units is run through independent accounting files that need to be aggregated to build the full picture for the entity.


This article talks firstly about how to manage the data for these common scenarios, and then talks about the process of handling eliminations, either manually or using automation through a well set up chart of accounts.



Managing Data within a Single Entity


When working with a single entity, you create all the necessary datasets in a single file for that entity for the period. Once ready, you can then click New consolidated dataset.



In the new consolidated dataset, click Add Datasets and select the relevant datasets (noting you can select more than one at a time) before saving.




Managing Data for Multiple Entities


Reportance offers two approaches for managing the underlying data for multiple entities. The most suitable approach depends upon your preference for flexibility or streamlining data entry. 


1. Individual Entity File Approach:


Create a File for each individual entity, and manage the Datasets in those individual entities. A separate Consolidated File will then create additional Datasets to import data from each of those individual entities as required, in addition to hosting the consolidated datasets.


Why choose this approach?

Having data maintained in each individual Entity file enables you to have a bespoke chart of accounts for each individual entity, which can differ from the chart used in the consolidated file. Also, this approach works if you have previously done work for this client in individual entities, and subsequently want to create a consolidated file without duplicating the work done in each individual entity.


2. Single Consolidated File Approach:


Maintain a single Consolidated File for the entire group. Entities will be linked to the consolidated file and Datasets with working data will exist only in the consolidated file. You will continue to be able to do functionality such as reporting or workpapers for individual entities inside of this consolidated file.


Why choose this approach?

You want to optimise your work by maintaining only a single Source of data and one chart of accounts.


We will now look at how to create a Consolidated Dataset using each approach.



1. Individual Entity File Approach


First, set up a file for each entity and add data as you would for any normal standalone entity.


Next, to create the consolidated group, navigate to the relevant client group and click on the + Add consolidated file button.



A dialogue will open which will enable you to name the consolidated file. You then will be taken to the Dataset screen. Here you can link the relevant entities for the consolidation. 



From the Datasets screen within the Consolidated File add Datasets to each entity (see knowledge article - Datasets - Manage Sources).



Note: Do not import the original data from the client accounting file again. Ensure that you import the Dataset that you have previously been working on by selecting Reportance as your Source.



Once all Datasets have been imported return to the Head Entity to create the Consolidated Dataset by clicking on the New consolidated dataset button.



From here you will be able to name the Dataset, give it a date range and link all the relevant datasets you have just created. Click the Create Dataset button to finalise the process.



With the Consolidated File created you can now proceed to the Accounts tab to manage the Master Chart of Accounts (see knowledge article: Accounts) by linking accounts (see Linking Accounts below).




2. Single Consolidated File Approach


From the Client screen, begin by creating new entities for all those that you want to consolidate under the relevant Client Group (see knowledge article: Adding and Editing Client Groups and Entities). As you do not need to have a file for each entity (you will just be using the single consolidated file), untick the Create a new file for this entity option at the bottom of the create entity window prior to saving.



After all entities have been created, select the +Add Consolidated File button.



A dialogue will open which will enable you to name the consolidated file. You then will be taken to the Dataset screen. Here you can link the relevant entities for the consolidation. 



You can now begin to add data for each entity directly by clicking on the entity on the left-hand side menu. This shows the datasets for that entity only, from which you can click New dataset (see knowledge article - Datasets - Manage Sources).



Note: If importing data from Excel, ensure that you select the correct file to import the data in to, I.e. the Dataset within the Consolidated File as shown below. You may need to use the search bar to find the right file.



Once all Datasets have been imported return to the Head Entity to create the Consolidated Dataset by clicking on the New consolidated dataset button.



From here you will be able to name the Dataset, give it a date range and link all the relevant datasets you have just created. Click the Create Dataset button to finalise the process.



With the Consolidate File created you can now proceed to linking accounts in the chart of accounts (see below).



Linking Accounts


In Reportance, an Account is actually a grouping of individual Client Accounting System Accounts, so that one Account can have multiple Client Accounting System Accounts, as shown in the following diagram:



For a more in depth look at this, review the information on the Master Chart of Accounts in the knowledge article - Accounts. Because of the Account Hierarchy, Reportance can easily determine which accounts from different systems are equivalent to each other.


Accounts can be linked in the Accounts screen by dragging and dropping one Account on top of another so that a blue box is drawn over it.



Alternatively, select one Account by left clicking and then right click on the Account you want to combine with. This will bring up a menu that will allow you to 'Combine Selected Accounts'.



Once the Master Chart of Accounts is linked together correctly, you can now run consolidated reports.



Reporting


Once a consolidated Dataset has been created, it can be selected from any drop-down menu in the report.



Consolidated Datasets have an extra field to configure in the column, the Consolidation Mode. Selecting 'None' will simply report as the sum total of all linked datasets. The other two modes, Consolidated Balances and Elimination Entries are used when performing automated eliminations, refer to the relevant section below.


When working with multiple entities, you can include detailed datasets in a single report. To do this, select the primary or head entity in the Entity field, and then tick Include Other Entities to enable you to select datasets from multiple entities in the single report.





Eliminations


In order to perform eliminations, two approaches are provided. The Streamlined Approach automates eliminations based on tagging accounts, while the Classic Approach enables you to perform elimination journals. The two approaches are documented below.



The Streamlined Approach


In the streamlined approach, specific accounts are tagged as being 'consolidated' accounts, and Reportance then determines the elimination entries. This approach is by far the simplest, but requires two things:


  • That all inter-entity transactions exist in accounts which exclusively contain inter-entity transactions.
  • That the balances of all of these accounts across each consolidated dataset balance to zero. Note that individual accounts need not balance to zero, but the sum of all consolidated accounts across all consolidates datasets must balance.


If these rules are met, consolidation can be performed as follows:


1. Nominate Consolidated Accounts


If there are no inter-entity or intra-entity transactions to be eliminated, you can proceed straight to the next step.


In the Accounts screen of your Consolidated File, find each account which contains inter-entity transactions, click on the Edit icon on the right and within the edit screen select the Consolidated checkbox as shown below. 



2. Configure the Reports


Now you are ready to report. In the Reports tab, prepare a new Report Template to work with. 


In each column, you can add any Consolidated Dataset or Group Dataset to the report by selecting them from the Dataset drop-down menu. These datasets provide a special Consolidation Mode property that lets you choose what you wish to display:


  • None: will show the summation of all accounts inside the Consolidated or Group Dataset, without applying any eliminations
  • Elimination Entries: will show just the elimination entries
  • Consolidated Balances: will show the summation of all accounts after taking into account elimination entries

Note: In many cases, you will show the Consolidated or Group Dataset twice, once showing the 'Eliminations' view, and once showing the 'Consolidated Balances' view.


The way in which the data is displayed can be customised. For a conventional consolidation report which shows each entity, an eliminations column and the total consolidated balance, you would have a column configuration that looks something like the following:




The Classic Approach


The classic approach allows you to create consolidation journals which serve to calculate the eliminations. This approach is both more flexible and more time consuming, so the Streamlined Approach is preferred wherever possible.


In the classic approach, consolidations can be performed as follows:


1. Perform the Eliminations


To do this, create a dedicated Dataset to house the elimination journals. For the Source, select one of the existing Sources which contain the most common accounts that you will journal to/from. Alternatively, create a new Excel source and call it 'Eliminations' if you prefer to keep all elimination accounts separate.


Next, navigate to the Journals tab in the Dataset tab where you can enter the consolidation journal entries.


Once done, add this 'Eliminations' dataset to the Group Dataset or Consolidated Dataset as the case may be.


Review the Accounts screen to ensure any accounts introduced by the journalling process are correctly linked to Reportance Accounts.


2. Reporting


As with the Streamlined Approach, you can now add the Consolidated or Grouped Dataset as a column. However, this time set the Consolidation Mode to 'None', which, given it includes the eliminations dataset, will automatically show the full consolidated balances. If you wish to show a separate eliminations column, you can create a column and use the 'Eliminations' Dataset you created earlier.






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