In Focus Resource Center > Insights

Finance in the Middle Market

Digital Transformation - Finance Consolidation Process

By Carlos Catalan .

Digital Transformation – Finance Consolidation Process

Executives and managers are taking charge and researching technology vendors to determine how consolidation technology solutions can help them roll up their financial results to prepare and produce monthly financials. As they search, it soon becomes apparent that these technology solutions start to look alike, making it hard for a middle-market business to successfully select and move forward to an implementation phase.

When researching technology solutions, it is important to remember that every business is unique— each has different business units, legal entities, a chart of accounts, currency rates, and intercompany transactions. Not all technology solutions will be able to meet your business requirements, so be sure to ask this important question: How much value will a technology solution bring to my business?

Having a thorough framework and a good structure while going through the vendor selection phase will help you select the consolidation technology solution that can bring the most value to your business. Being able to define your business requirements and prioritize them accordingly is key for a successful implementation.

What is the Consolidation Process?

The finance consolidation process focuses on the parent company combining the financial results of different business units, or subsidiary companies, into one set of financial results.

Typically, the consolidation process starts after you have reconciled and performed flux analyses on your balance sheet accounts. At this point in the process, you have a trial balance per business unit. The consolidation process starts by reviewing the records of items such as intercompany loans, charges to the corporate overhead, charge payables, payroll and payroll expenses, any adjusting entries, intercompany transactions, and closing subsidiary/parent books. This process becomes complicated, especially when you have multiple companies that have a different chart of accounts and/or currencies, or different databases or ERP systems where the transactional information is stored. Drilling down to the details and then rolling them up to the consolidated financials is extremely tedious work, especially when you are doing most of the work in Excel.

How to select a consolidation solution

Before you start evaluating different technology solutions, you should assess your consolidation process, define your business requirements, and document the structure of your business (for example, which P&Ls roll up to other P&Ls). Business requirements vary from business to business, and determine what the system needs to support your team. An example of key business requirements includes defining chart of account segments across different general ledger data sources and establishing how this data will roll up to your consolidated financial statements.

Once you have well-defined business requirements, you will need to prioritize those business requirements into must have, nice to have, and critical categories. This documentation will help you to set the right level of expectations for each technology vendor that you will be assessing during your selection process. This process is helpful both for you and for technology vendors so they can see how they can meet your business requirements, especially the ones that you labeled as critical.

Initially, you will ask multiple vendors to perform a demonstration of the software. After these meetings, you will be able to select which vendors will be appropriate for your business. In some cases, multiple vendors’ consolidation systems will be similar in functionality. In these situations, you will want to develop specific use cases or examples of how vendors plan to accommodate your most critical business requirements. These tailored use cases or examples will help you identify which technology vendor will be more suitable for your business.

The last step of the vendor selection process is the development of the product pricing structure and timeline implementation/setup. There are different parameters that will be key in terms of how quickly you can implement these types of solutions. For example, the number of ERP systems you have, the number of users who will be using the software, and how available your internal resources are to work on the implementation, among others, all of which are key indicators for how quickly you can implement the investment you are making into creating business value.

How to Get Started

At Citrin Cooperman, we provide a System Selection & Implementation process as part of our Digital Transformation Practice offering. We look at your financial systems ecosystem, as well as how you would optimally generate financial reporting for your business, to help select the right technology for your business. It starts with an evaluation of your current state processes, systems, and financial structure, and it helps you determine what a tailored future state process can bring to your business. After working with you on business requirements, reporting structure, and your specific use cases, we can use our strong relationships with top consolidation vendor solutions to bring value at a reasonable price.

Citrin Cooperman is the optimal partner in business consolidation. By utilizing the above process, we help our clients pick the systems that will positively affect their business, with confidence that they explored all options and made the right selection.

Please visit our Digital Transformation Practice website by clicking this link


Our specialists are here to help.

Get in touch with a specialist in your industry today.

* Required

* I understand and agree to Citrin Cooperman’s Privacy Notice, which governs how Citrin Cooperman collects, uses, and shares my personal information. This includes my right to unsubscribe from marketing emails and further manage my Privacy Choices at any time. If you are a California Resident, please refer to our California Notice at Collection. If you have questions regarding our use of your personal data/information, please send an e-mail to