Consolidate, Online Strategy [Steps 0-4]

#Miscrosoft #D365 #D365F #D365FSC #Consolidaions #ConsolidateOnline #Process #BusinessProcess #Strategy #Simplification

We discussed Consolidations in earlier blogs. Today I want to talk about strategy for processing consolidations.

Assumption: You have read the earlier blogs.

Assumption: You have foreign currency transactions in you child companies.

(if not, you can skip step 0 and skip step 4; just use steps 1,2,&3)

Links to earlier blogs

• Automated Accounting, D365 Online Consolidation (365financearchitect.com)

• https://www.365financearchitect.com/post/consolidate-different-chart-of-accounts-no-problem-for-d365

• https://www.365financearchitect.com/post/where-did-those-numbers-come-from-d365fo-consolidation-trick

• Automated Accounting Part 10, Foreign Currency Translation & Reval in a Consolidation Company (365financearchitect.com)

Strategy Overview

If I am performing month end accounting, I find that one of the best places to see a preliminary view of the entire company is to look at the consolidated trial balance in a consolidation company. I usually iteratively consolidate and then view this trial balance, or related Financial Reporter reports as I complete my month end tasks.

While performing iterative reviews and posting normal or correcting journals, I am not concerned about Eliminations until I get near to completing my month end accounting.

I want to minimized repetitive eliminations. Although mathematically accurate, I desire to see a minimal number of lines due to Elimination Journals.

Example: Math Accuracy for repetitive Elimination Journals

Step Process

0 = Complete Foreign Currency Revaluation in child Legal Entities [LE].

1 - Perform Consolidation, Online in a parent LE (omit running Eliminations).

2 - Post Elimination Journals in an elimination LE.

3 - Repeat step 1

4 - Complete Foreign Currency Revaluation in parent LE.

Strategy Details - Step 0

This step will get the child LE foreign currencies up to date in preparation for Currency Translation Adjustment [CTA] in step 1 &3.

In each child Legal Entity, Perform the periodic tasks for Foreign Currency Revaluation

• Cash and Bank

• Accounts Receivable

• Accounts Payable

• General Ledger (last)

Strategy Details - Step 1

In this step, we leave the Elimination tab in Consolidate, Online empty.

This minimizes level of effort making parameter edits during iterative consolidations, as the Elimination tab does not need to be edited.

DO include the Elimination LE on the "Legal Entities" tab.

DO include parameters on the "Currency Translation" tab

This step populates the Consolidated Trial Balance, providing data for step 2.

In the Consolidation LE Perform a Consolidate, Online with Elimination rules not populated.

Consolidation LE \ Consolidate > Consolidate, Online

Strategy Details - Step 2

In the Elimination LE, process all of your Elimination Proposals and Post.

Elimination LE \ Consolidate > Elimination Journal

Strategy Details - Step 3

Repeat step 1.

This will include Eliminations posted via step 2.

Example: abbreviated Consolidated Trial Balance without repetitive Elimination Journals

Strategy Details - Step 4

If you validate your consolidated trial balance (in accounting currency) resulting from step 3, you may find some values that do not validate. Step 4 fixes this issue,

There are no sub ledgers in a consolidation LE.

In consolidation Legal Entity, perform the periodic tasks for Foreign Currency Revaluation

• General Ledger

Summary

If you have several consolidation LE's, repeat the above steps 0-4.

The above step 0-4 strategy is completely optional.

You may desire to populate and use the "elimination" tab within Consolidate, Online.

I believe you will find the step 0-4 strategy simplified for:

process comprehension,

level of effort (iterative editing of elimination rules inside Consolidate, Online), and

legibility (minimized # of lines for eliminations).