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How to Automate Financial Consolidations for Faster, Easier Reporting

automate financial consolidations
By Drazen Vujovic. Reviewed by: James Rose. Last Updated November 22, 2024

Summary:

This blog is based on Tyler Caskey’s session on Automating Consolidations from the recent AI & Automation Summit. In his presentation, Tyler shared practical strategies for using automation tools to simplify financial consolidations and reduce manual errors.

Here, we break down the key takeaways from his session and explore how automation tools can help streamline your consolidation processes.

Financial consolidations don’t have to be time-consuming or complicated. With the right tools, you can automate the process, cut out manual work, and save hours of time. This guide breaks down how tools like Xero, Fathom, Mayday, Joiin, Dashboard Insights and Datasights can help you streamline consolidations and reduce headaches.

We could list all the reasons why automating financial consolidations is a must, but you’re probably already feeling the pain if you're handling it manually. 

Let’s skip the long intro and talk about how automating consolidations can change the way you work. Whether you're dealing with multiple entities or just one complex business, you’ve probably spent hours pulling together financial reports, balancing intercompany loans, and handling eliminations manually. Sound familiar?

Now imagine you could automate all of that. No more spreadsheets. No more manual adjusting. Just smooth, fast, and accurate consolidations every time. Let’s dive into how you can make that happen.


Why Automate Financial Consolidations?

If you’re still consolidating manually, you’re not just losing time—you’re setting yourself up for errors. Combining multiple trial balances, handling eliminations, and balancing intercompany loans by hand can lead to mistakes, especially if you're using Excel.

Automation tools save you from all of that. They take care of the heavy lifting, pulling in data automatically and handling repetitive tasks. You’ll be faster, more accurate, and ready to scale as your business grows.


The 4-Step Strategy for Automating Consolidations

A clear, step-by-step process can help finance teams automate consolidations efficiently. This approach ensures a smooth transition from manual processes to automation:

  1. Simplify:
    Evaluate every report and process. Ask yourself: “Do we need this report? Are there unnecessary transactions making the process more complex?” By simplifying reporting, consolidation becomes faster and more manageable.
  2. Automate:
    The key to this approach is automation. Instead of relying on manual entries in Excel, leverage systems like Xero, MYOB, QuickBooks, or Joiin to automate repetitive tasks, such as balancing intercompany loans or consolidating profit and loss statements.
  3. Delegate:
    Once the processes are simplified and automated, delegate them. A CFO’s role should focus on strategic oversight, not on creating detailed reports from scratch each month. Automation allows your team to handle consolidations while you focus on high-level financial management.
  4. Eradicate:
    Look for any processes that can be removed altogether. Streamlining workflows this way allows teams to focus on what truly matters.

The Tools of the Trade: Xero, Fathom, and Mayday

Now that you know the basics, let’s look at some of the top tools for automating financial consolidations:

1. Xero

Xero is one of the most popular accounting tools for good reason. It integrates easily with third-party apps, meaning you can sync it with other tools to manage multiple entities without any headaches. Xero handles the day-to-day accounting tasks while working with other apps to handle consolidations.

2. Fathom

Fathom is a powerful tool that makes financial consolidations easy. With Fathom, you can consolidate multiple entities, eliminate intercompany loans, and create clean financial reports. It’s perfect for businesses that need fast, accurate results without manual work.

3. Mayday

Mayday is excellent for ensuring your intercompany loans are balanced and working properly across multiple entities. It's a must-have if you need to streamline intercompany transactions. Using Mayday’s automation, you can drastically cut the time spent on manual balancing.

4. Joiin
Joiin is a cost-effective option for basic profit and loss (P&L) reporting and simpler consolidation needs. While it doesn't offer the same level of features as Fathom or Mayday, it’s a solid choice for businesses just starting their automation journey.

5. Dashboard Insights & Datasights
These tools are newer players in the market but are quickly making a name for themselves. Dashboard Insights has robust reporting capabilities, allowing for advanced financial insights across multiple entities. Datasights, on the other hand, excels at pulling data into visual reports and integrating with platforms like Power BI for large-scale data analysis.


Best Practices for Setting Up Automation

When you start automating, here are a few things to keep in mind:

Separate Internal and External Transactions:
When consolidating multiple entities, it’s important to separate internal transactions (like intercompany sales) from external ones. You only want to report what matters to the outside world. Internal transactions can be eliminated to keep your reports clean and accurate.

Use Consistent Naming Conventions:
Naming consistency is key. Make sure all your entities use the same structure for things like intercompany loans. It’ll make it easier to match transactions between companies and ensure that everything balances.

Leverage Visual Dashboards:
A good reporting tool doesn't just provide accurate data—it presents it in a way that’s easy to digest. Tools like Fathom and Dashboard Insights allow you to create strong visuals, which are crucial for making reports more engaging and understandable for stakeholders.

Don’t Stress About Identical Charts of Accounts:
While it’s helpful to have identical charts of accounts across your entities, it’s not necessary. Tools like Xero and Fathom can work with different account names and numbers. As long as your accounts are clearly labelled, you’ll be fine.


Automating Consolidations in 10 Minutes

Thanks to tools like Xero, Fathom, and Mayday, what used to take hours can now be done in just 10 minutes. Here’s how you can get it done:

  • Use Xero to pull in financial data from multiple entities and manage your day-to-day accounting processes.
  • Let Mayday handle intercompany loan balances and ensure transactions between entities are balanced automatically.
  • Use Fathom to eliminate intercompany transactions and generate clean, consolidated financial reports in minutes.
  • For simpler profit and loss reporting, Joiin can be a quick, effective option for businesses that need basic but reliable automation.
  • Use Dashboard Insights to create clear, visual dashboards and reports, making it easier for stakeholders to understand the consolidated data.
  • If you have large datasets or need to integrate data into advanced analytics tools like Power BI, Datasights can pull and visualise your financial data effortlessly.

With these tools in place, you’ll have smooth, accurate consolidations without spending hours in Excel. Learn how to automate consolidations in 10 minutes.


Final Thoughts: The Future of Financial Consolidation

Automating financial consolidations is the future for businesses looking to save time and reduce errors. With tools like Fathom, Mayday, Dashboard Insights, and Datasights, you’ll spend less time on manual work and more time on strategic financial management.


Ready to Automate Your Financial Consolidations?

If you’re ready to make financial consolidations faster and easier, start with Fathom, Mayday, and Content Snare. While Fathom and Mayday handle the heavy lifting of consolidating data and balancing intercompany loans, Content Snare simplifies the process of gathering all the documents you need.

Instead of chasing down reports, financial statements, or any other key documents from your team, Content Snare collects them for you automatically. This means fewer delays, less back-and-forth, and everything you need in one place—right when you need it.

By using these tools together, you’ll spend less time on manual work and more time focusing on growing your business.

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Drazen Vujovic

Dražen Vujović is a journalist and content writer. More importantly, he is a father of two and a long-distance runner.

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