October 22, 2024
Consolidating financial data across multiple entities can feel like navigating a maze of spreadsheets, formulas, and endless tabs. For many accountants, the familiarity of Excel can be comforting, but it can also lead to frustration and inefficiencies. While there's satisfaction in cracking complex formulas and building a functional consolidation model, it's often time-consuming and error-prone.
That's where tools like Fathom come in handy. In this guide, we'll explore five key ways to simplify and improve your consolidation process, helping you save time, reduce errors, and gain deeper insights from your data.
If you're ready to rescue your consolidations from the chaos of spreadsheets, read on!
Consolidations can be a serious time sink. The process often requires hours of tedious work, from input files to formatting profit and loss statements, balance sheets, and cash flows. If you've ever built a consolidation model, you know the pain of updating it repeatedly for each month or quarter. This cycle can quickly become time-consuming, especially if you're dealing with multiple currencies and formats from different systems.
Instead of struggling with manual inputs and recalculations, consider automating these tasks. Fathom simplifies the process by importing data from various source systems and mapping each account to the correct category in your financial statements. Fathom automates everything from currency conversions to balance sheet reconciliations, so you can spend less time fixing spreadsheets and focusing more on what matters—delivering valuable insights.
Spreadsheets are notorious for errors. Mistakes are inevitable when working with dozens of tabs, hundreds of formulas, and thousands of numbers. Finding and fixing these errors can take hours, especially if you go on to follow a trail of broken formulas across multiple tabs. Worse still, if you didn't create the spreadsheet in the first place, navigating someone else's model can feel like trying to find a needle in a haystack.
Automating your consolidation process with Fathom reduces the risk of human error. The software consolidates accounts automatically, and if something is out of balance, it alerts you before the problem escalates. You can say goodbye to complex spreadsheet formulas and let Fathom handle the calculations with its built-in formula builder, which requires no advanced knowledge.
One of the biggest challenges in consolidations is aligning your chart of accounts, especially if you're working with different source systems. Account names and codes can vary across departments, subsidiaries, or legacy systems, leading to discrepancies in your consolidation. For instance, you might have accounts like "cookie revenue" and "cookies revenue" that must be grouped together for analysis.
Fathom simplifies this by letting you harmonize your chart of accounts using customizable headers. You can group accounts under unified categories, making consolidations cleaner and more aligned without needing extra mapping tabs or complex formulas. This feature helps you visualize your financial data better and maintain consistency across reports.
Posting eliminations can be a daunting part of the consolidation process. Intercompany transactions must be removed to avoid double counting, and errors here can throw off your entire balance sheet.
Fathom's adjustment feature simplifies eliminations by auto-balancing them. Whether you're removing intercompany sales or eliminating investments between subsidiaries, Fathom ensures that your eliminations are accurate and hassle-free.
After putting in all the effort to consolidate your financial data, the next step is to use it. Too often, consolidations end with a static P&L or balance sheet, but there's so much more you can gain from the data.
Fathom offers dynamic reporting tools that allow you to analyze your consolidated data meaningfully. With just a few clicks, you can drill down into specific accounts, explore trends, and generate insightful reports that help drive better decision-making. Fathom's user-friendly interface makes sure that you're not just producing numbers but gaining actionable insights.
Consolidating your financial statements doesn't have to be an endless cycle of manual work, errors, and frustration. By automating the process, aligning your accounts, and gaining valuable insights from your data, you can transform your consolidations from a nightmare into a streamlined, efficient process.
Watch the full episode below.
Rescue your consolidations today. Explore more of Fathom's consolidated reporting feature or sign up for a 14-day trial to test it for yourself.
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Ellie is a campaign marketing manager at Fathom, with a degree in branding and marketing. With a background in campaign strategy and creation, Ellie is passionate about showcasing how Fathom can make a real difference to finance professionals and businesses.
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