FlexSystem Consolidation with Notes

Overview – Management & Statutory Consolidations

March 19, 2021

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Consolidations including the monthly close are labour intensive processes where today ultra-granular transformational capability x-subsystem is very limited, and not at all tightly integrated across applications. This is particularly apparent at the consolidated or sub-consol levels where corporates have to look very carefully at the many specific and detailed Financial data attributes that originate across different vendor systems, including the handling of operational segments, currencies, year-end dates, % ownerships, acquisition & disposal dates, intercompany balances, eliminations, currency translations etc etc. With so much detail under consideration in such limited time the resulting confidence in submitted numbers is often not as high as one would like it to be in the Office of the CFO.

 

Technology is now able to address the two root causes that lead to these frictional issues, namely practical compute power to drive ultra-granular transformations, thereby enabling your existing accounting systems to be automated iteratively in such a way that tags and descriptions allow you to fully understand both the nature of the computation and its original location source throughout the whole consolidation and note preparation process. Freeing up time for management reviews leads to increased confidence in financial reporting submissions and additionally, as processes are auditable and repetitive in every operational unit, it is a leading area where automation can be further extended to free up more time. A powerful differentiator made even stronger over time as these systems are optimised for management accounting.

 

Overview

  • A scalable single, multi cloud, on-premise or hybrid solution that can be used by domain end users for all consolidations and sub consolidations at trial balance, transaction or journal level, including journal adjustments
  • Depending on the size and structure of the company it can be used in isolation as a consolidation system or a broader modern system for actuals and budgeting, all with segregation of duty throughout its single year or multiyear lifecycle
  • FlexSystem provides comprehensive Financial and consolidation solution sets as needed to different sizes of entity, from 1 in 10 of the Global Forbes 2000, 25% of the HKEX and SME’s meaning that we have a broad understanding of the issues faced by corporates across various sectors
  • Facilitates reduced IT involvement for reporting across multi-vendor subsystems
  • Comprehensive reporting with formatting and output document type options
  • Rolling comparisons x-entity, x-dates and all optimised for management accounting with built in formulae and smaller detailed operational points that come from competitive reviews ie all GL codes in numerical order or free text search options
  • Tight controls and segregation of duties ensures full sign off pre-statutory filing of submissions
  • Drill down into underlying reported numbers gives additional confidence on submissions ie fixed assets to source data
  • Allows simultaneous postings to different control accounts and related subsidiary ledgers for assets, bonds eg Green Bonds + Sustainability Bonds etc, properties, financial + operating leases etc
  • Highly flexible for purposes of change management whether internally or externally driven
  • Optimised for domain end-users to define and automate consolidation processes x-systems from 1) data collection 2) through all required transformational flows to 3) reporting @anywhere with optionally integrated capabilities for Continual Monitoring, Stress Testing and Business Portfolio Simulations, noting that all of these discrete stages can be tackled by your teams sequentially, or in parallel.
  • Processes are fully auditable for trace back to original source data and are repeatable on-demand with full segregation of duties. This enables all aspects of consolidated processing to be tackled including reporting @constant currency, instant FX movement analysis, reconciliation between GAAP and IFRS submissions and calculation of weighted average FX rates. Supports opening rate, closing rate, average rate, historical rate and composite rates
  • Options for period end closing to be disabled for closed periods
  • Processes are not constrained meaning that more complex areas and segments are easier to handle through the system being optimised for management accounting; for example capex planning, full balance sheet movements for currencies & reserves, reconciliations between GAAP and IFRS, measurement and recognition of actual performance of contracts & committed terms, cash flows by direct and indirect methods. All can be rolling if required and relevant to task
  • Provides for highly flexible ultra-granular data handling for both complex tasks and complex accounting processes;
    1. Examples of the former might be lease management; auto data mappings between local and consolidated chart of accounts by segment; scalable elimination mapping at group, sub-group and detailed level; allocations; closed loop intercompany transactions across a group of companies and elimination of them at group level; inventory valuations etc at local and consolidated level. Easier maintainability of % shareholding, non-controlling interest hierarchy. Handling some detailed aspects of the enterprise not normally catered for in enterprise systems including such areas as diverse portfolio and total liability management
    2. The latter complex processes being the more pervasive budget flows and their related management across departments and entities
  • Enables detailed tags to be added @anytime to help with tracing the source and calculation method behind data
  • For larger deployments management can also be kept fully informed as to the progress against the consolidation timetable, or non-progress as the case might be. In fact collection of initial numbers etc can be done with optional auto-chase & auto pre-validation capabilities, the latter that might be used for example for checking adherence to any top down driven key KPI’s at the HQ level
  • Breakdown of balance sheet accounts to identify any unsettled or over settled item
  • Process management for budgets and consolidated actuals can use the same methodology to pinpoint areas of interest and to subsequently fine tune models
  • What If scenarios capabilities can be deployed that leverage the current state of latest technologies for simultaneous rankings of goals based on the variables in play

 

Design Principle

  • Domain end user driven for agile design with Smart WorkSpaces
  • Secure with standard or advanced encryption options depending on business sector
  • For execution at a technical level the small resultant operating program data size, when combined with latest compression technologies and additionally leveraged through the multi cores and threads within today’s processors, give a practical “High Speed Compute” capability to drive any deep ultra-granular transformational processes in a timely manner
  • Process Flow Engine allows ultra-complex dependent, parallel and sequential steps to be executed in one go or in as many steps required by the process owner. This enables further iterative simplification of any complex task or process which will continue to be repeatable and auditable
  • Handles multiple data view combinations for detailed review assessments and comparisons. Multi-Dimensional Reporting is timely therefore avoiding many cut off and timing issues often seen with legacy systems
  • Ultra-complex processes can have progress stages displayed on the screen to provide feedback as to the ongoing status of the task to stakeholders or interested parties ie Transforming Company 1 of 400, or Producing FX Reserves Reconciliation, or Completing GAAP cf IFRS Reconciliation
  • End User Domain Skills + End User Empowered Process = Agile Organisation

 

The above serves as an introduction to some of the options available within our Financial and Consolidation platform that enables you not only to drive value creation across the enterprise to release time for further innovation, but also allows you tighten overall control within the enterprise with accountability. It can be used in isolation or as part of a broader operational platform for both actuals and budgeting.

 

FlexSystem is a business software vendor to 1 in 10 Forbes Global 2000 (May 2020) and 1 in 5 Global Fortune 500 (August 2020), operating at the intersection of new process and payment technologies to provide you with iterative opportunities for value creation with or without AI at both gross and net margin levels.

 

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