Consolidation

Any business that has grown beyond a single reporting entity needs to consolidate data. Consolidation of lower level entity data is one of the core inbuilt functionalities of TCM.

All TCM models have at least one consolidation structure, providing a total of all the underlying input entities. That one default consolidation structure can have multiple hierarchy levels, providing regional or divisional sub-consolidations.

However, what if you need to consolidate the same base data in two different ways within the same model? This is where TCM's multiple consolidation paths are invaluable. By creating another path, and adding the necessary sub-total and total entities, the original base data can be consolidated in two different ways, and the results of both consolidations are available for all reporting and analysis.

TCM can also be used to consolidate based on a legal structure, geography, or an industry structure. TCM can also create multiple paths that can be used for business reorganisation modelling, enabling you to look at different scenarios, pre or post-acquisition, without impacting your current business consolidation.

Multiple paths, each with its own unique hierarchy, can be built on the same underlying base data. Each of the different hierarchies is reflected in TCM's drill down functionality, enabling analysis right from the very top of the organisation, through all intermediate regions or business groupings, down to the lowest input level data.

In TCM you can include Joint Ventures, appropriate equity adjustments, eliminations and consolidation adjustments. If TCM's Inter Company Balancing module is being used, the consolidation process can take care of all eliminations at both intra-group and inter-group levels.

And TCM's intelligent rules engine can differentiate between input elimination and consolidated entities, so that calculations are always applied correctly.

Because consolidation is integrated into the core functionality of every TCM model, the latest results are always available for reporting and analysis. If an underlying entity's data changes, the consolidation process will pick up those changes, but only recalculate and consolidate those parts of the hierarchy that are affected, making the process very fast and efficient.

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The consolidation challenge

The issue

A leader in global logistics, this client uses TCM for monthly consolidation and reporting for its Central/Eastern Europe Business Unit. The business is organised around numerous contracts across different clients and industry sectors, based out of multiple locations across Germany, Austria, Switzerland, Czech Republic, Slovakia, Poland, Hungary and Romania. In all, there are in excess of 1300 input level entities.

The TCM Solution

Actual data is imported into TCM for each of the input entities from the corporate ERP system. TCM then consolidates that data in six different ways, giving the controllers and analysts at head office the ability to see results by legal entity, by contract, by two different management responsibility structures, by geographic location and by industry sector. TCM calculation rules are used to perform allocations of shared costs to individual contracts, and all foreign currency data is converted to Euros at the appropriate monthly rate during consolidation.

By using TCM, the Business Unit has dramatically increased its ability to analyse performance across a variety of business dimensions. The six different structures give many more consolidation options than are possible in the corporate ERP system, and they are able to quickly drill down from any consolidated number to get to the underlying values in a way that simply would not be possible using Excel spreadsheets.

consolidation / reporting / budgeting / forecasting / strategic planning