Top 7 Financial Consolidation Software Guide: The Best of 2024

The consolidation process is essential for ensuring reliable and effective financial reporting within an organization. Whether the organization is private or publicly held, financial consolidation software must enable accurate, timely, and compliant reporting to meet the requirements of external stakeholders and adhere to US GAAP, IFRS, or other local regulations. This accuracy is vital for tax-related financial statements, statutory reporting, or filings with regulatory bodies. This blog post explores the top 7 financial consolidation software offerings for 2024.

Table of Contents

• What Is Financial Consolidation Software?
• How to Do the Financial Consolidation Process
• What Is the Difference Between Financial Consolidation and Financial Close?
• Benefits of Financial Consolidation Software
• 7 Best Financial Consolidation Software
• Simplify the Financial Consolidation Process With OneStream Unified Platform
• Learn More About Financial Consolidation
• FAQs About Financial Consolidation Software

What Is Financial Consolidation Software?

Financial consolidation software allows organizations to automate and streamline combining, summarizing, and transforming data from multiple business units, subsidiaries, or departments. This complex process ensures the completeness and accuracy of the data to comply with relevant accounting standards and regulatory authorities.

Common features across financial consolidation tool options include the following capabilities:

• Advanced foreign currency translation.
• Powerful, automated intercompany eliminations.
• Flexible organizational ownership structures.
• Audit trails.
• Drill-through analysis.

By leveraging these features and others, organizations can streamline their consolidation process, minimize errors, and report confidently.

How to Do the Financial Consolidation Process

The financial consolidation process combines financial data from various subsidiaries or divisions within an organization to produce a unified set of financial statements. Here’s a step-by-step guide to the financial consolidation process:

1. Data Collection

• Gather Financial Data: Collect financial statements (balance sheets, income statements, cash flow statements) from all organization sectors.
• Ensure Consistency: Ensure that all divisions report their data in a consistent format and use the same accounting standards.

2. Data Standardization

• Harmonize Accounting Policies: Ensure all departments follow the same accounting policies (e.g., depreciation methods, inventory valuation).
• Currency Conversion: For multinational corporations, convert financial statements from foreign subsidiaries into the parent company’s reporting currency using the appropriate exchange rates.

3. Intercompany Eliminations

• Identify Intercompany Transactions: Detect and list all intercompany transactions, such as sales, purchases, loans, and dividends between parts of the organization.
• Eliminate Intercompany Balances: Remove intercompany transactions and balances to avoid double counting. This step ensures that only external transactions are reflected in the consolidated financial statements.

4. Adjustments and Reclassifications

• Make Necessary Adjustments: Adjust for any timing differences, reclassifications, or other necessary journal entries to align the financial statements.
• Account for Non-Controlling Interests: If there are subsidiaries where the parent does not own 100%, calculate and adjust for the non-controlling (minority) interests.

5. Aggregation of Data

• Combine Financial Statements: Aggregate each department’s adjusted and standardized financial statements into a single consolidated financial statement. This includes summing up revenues, expenses, assets, and liabilities.

6. Preparation of Consolidated Financial Statements

• Prepare Consolidated Statements: Compile the data into consolidated financial statements, including the consolidated balance sheet, income statement, cash flow statement, and equity statement.
• Verify and Review: Ensure the consolidated financial statements are accurate, balanced, and reflect the true financial position of the organization. Perform checks and balances to verify the correctness of the data.

7. Final Review and Reporting

• Conduct a Final Review: Review the consolidated financial statements for accuracy and compliance with relevant accounting standards and regulations.
• Disclose Necessary Notes: Add necessary disclosures, notes, and explanations for the consolidated financial statements to provide context and transparency to the stakeholders.
• Submit and Report: Present the consolidated financial statements to the relevant stakeholders, including management, auditors, and regulatory bodies.

8. Audit and Compliance

• Prepare for Audits: Ensure that all steps in the consolidation process are well-documented and transparent to facilitate external audits.
• Ensure Regulatory Compliance: Confirm that the consolidated financial statements comply with all applicable regulatory standards (e.g., GAAP, IFRS).

9. Automation and Continuous Improvement

• Leverage Technology: Use financial consolidation tools to automate and streamline the process, reducing manual errors and improving efficiency.

Continuous Improvement: Regularly review and improve the consolidation process, incorporating feedback and adapting to accounting standards or business structure changes.

What Is the Difference Between Financial Consolidation and Financial Close?

Understanding the distinction between financial consolidation and financial close is essential for organizations looking to maintain accurate and compliant financial reporting. While both processes are integral to managing a company's financial health, they serve different purposes and involve different steps.

Financial Consolidation

Financial consolidation refers to combining the financial statements of various departments or subsidiaries within a company into a single set of financial statements. This process is crucial for organizations with multiple entities to present a unified view of their financial performance and position. Key activities involved in financial consolidation include:

• Aggregating financial data from different divisions.
• Eliminating intercompany transactions to avoid double counting.
• Standardizing accounting practices.
• Handling multi-currency translations for global operations.
• Preparing consolidated financial statements such as balance sheets, income statements, and cash flow statements.

Financial Close

Financial close is the broader process of finalizing all financial records for a specific period (e.g., monthly, quarterly, annually) and preparing the financial statements for reporting. This process ensures that all financial transactions are accurately recorded, reconciled, and reported within a specified time frame. The financial close includes:

• Recording all financial transactions for the period.
• Reconciling accounts such as bank statements, accounts receivable, and payable.
• Adjusting journal entries to reflect accruals, deferrals, and other necessary adjustments.
• Reviewing financial statements to ensure accuracy.
• Finalizing and reporting the financial statements to internal and external stakeholders.

Key Differences

• Scope: Financial consolidation is a specific step within the broader financial close process. It focuses on aggregating and integrating financial data across entities, while the financial close encompasses the entire process of finalizing financial records for a period.
• Application: Financial consolidation is relevant for organizations with multiple divisions that must present a consolidated view of their finances. Financial close applies to all organizations; the books are closed for a specific period.

Benefits of Financial Consolidation Software

Financial consolidation software has become an essential tool for organizations seeking to streamline their financial reporting processes and improve the accuracy of their consolidated financial statements. Here are some of the key benefits:

1. Improved Accuracy and Efficiency

Financial consolidation software automates many manual processes in consolidating financial statements, such as data collection, intercompany eliminations, and currency conversions. This automation reduces the risk of human error and speeds up the consolidation process, leading to more accurate financial reporting. By minimizing manual intervention, organizations can ensure their financial data is reliable and free from discrepancies, allowing for more confident decision-making.

2. Enhanced Compliance and Reporting

Compliance with financial regulations and accounting standards (such as GAAP or IFRS) is critical for organizations, especially those operating in multiple jurisdictions. Financial statement consolidation software helps ensure consolidated financial statements comply with these standards by automatically applying the appropriate rules and guidelines. Additionally, the software often includes built-in templates and reporting tools that make generating and submitting regulatory reports easier, reducing the burden on finance teams and ensuring timely compliance.

3. Real-Time Financial Insights

One of the significant advantages of financial consolidation software is its ability to provide real-time financial insights. By integrating with various financial systems and continuously updating data, the software allows organizations to access up-to-date financial information at any time. This real-time visibility into financial performance enables quicker and more informed decision-making, allowing organizations to respond swiftly to market changes or operational challenges.

4. Scalability and Flexibility

As organizations grow, their financial consolidation needs become more complex. Financial consolidation software is designed to be scalable, accommodating the increasing number of entities, transactions, and data points that come with organizational growth. The software can easily handle the addition of new subsidiaries, changes in corporate structure, or variations in accounting practices across different regions, making it a flexible solution for evolving businesses.

5. Streamlined Intercompany Eliminations

Intercompany transactions must be eliminated during consolidation to avoid double counting and ensure accurate financial reporting. Financial consolidation software streamlines this process by automatically identifying and eliminating intercompany transactions, significantly reducing the time and effort required to perform these eliminations manually. This feature ensures that the consolidated financial statements present a true and fair view of the organization’s financial position.

6. Audit Trail and Transparency

Financial consolidation software provides a clear audit trail, documenting every step of the consolidation process. This transparency is crucial for internal and external audits, allowing auditors to trace transactions, adjustments, and eliminations back to their source. A robust audit trail helps organizations demonstrate compliance, resolve discrepancies, and enhance overall trust in their financial reporting.

7. Cost and Time Savings

Organizations can achieve significant cost and time savings by automating and streamlining the financial consolidation process. Reducing manual work allows finance teams to focus on more strategic tasks, such as financial analysis and planning, rather than spending time on routine consolidation activities. The faster consolidation process also leads to quicker financial close cycles, freeing up resources and reducing overall operational costs.

The Best Financial Consolidation Software

This comparative analysis explores the features and functionalities of 7 leading financial consolidation solutions: OneStream, Oracle EPM Cloud, Wolters Kluwer CCH Tagetik, Fluence Technologies, Vena Solutions, Datarails, and Centage. The best consolidation software for 2024.

1. OneStream

Who We Are: OneStream is the leading solution for complex financial consolidations due to its unified platform, advanced features, real-time insights, streamlined data integration, regulatory compliance support, scalability, user-friendly interface, collaboration tools and cost-effectiveness. As organizations continue to navigate the complexities of the global business landscape, OneStream stands as a reliable partner in achieving efficient, accurate financial consolidations.

Pros:

• Capability to handle the most complex global consolidations thanks to Extensible Dimensionality, guided workflow and out-of-the-box advanced financial intelligence capabilities.
• Seamless integrations with ERP systems through a variety of data load options, ensuring data consistency and accuracy.
• Complete audit trails and drill-through/drill-down capabilities for maximum visibility into any number.

Cons:

• OneStream's tailored implementation process may require additional configuration time to meet customers' unique business requirements.
• Pricing may be prohibitive for smaller businesses.

OneStream may have a smaller but growing market presence compared to other alternatives – despite growing popularity and having 1,300+ customers across the globe.

2. Oracle EPM

Who They Are: Oracle EPM is a suite of business applications designed for end-to-end management of enterprise-wide consolidation, close, the financial planning process and forecasting, and performance reporting. According to Oracle with their Financial Consolidation and Close end-to-end solution, organizations can effectively and efficiently manage the consolidation and close process. Organizations can leverage out-of-box financial consolidations with pre-built cash flow, balance sheet and income statement – accelerating the close.

Pros:

• A large customer base and global network ensure access to a pool of skilled professionals, services, partners and domain expertise.
• Integration with Oracle solutions (ERP, HCM, CRM, etc.) and databases, and a robust solution for master data management, data integration and data quality.
• Some pre-built functionality and out-of-box content may speed up implementations.

Cons:

• Lack of parity in Consolidation & Close solution for consolidation capabilities exists compared to Oracle's legacy Hyperion HFM solution.
• Fragmented, multiple solutions require multiple complex integrations across solutions to reconcile actuals with plans and to bring in financial and operational data to support the end-to-end consolidation, close, financial and operational planning, and reporting processes.
• Limited live references and few peer reviews/insights are available for the cloud EPM solutions.

3. Wolters Kluwer CCH Tagetik

Who They Are: CCH Tagetik was originally developed in 2005 to deliver trusted, comprehensive and scalable CPM solutions globally and was acquired by Wolters Kluwer in 2017. As an end-to-end financial close and consolidation solution, CCH Tagetik is marketed to group and entity controllers. The software comprises multiple solutions for financial consolidation and close, account reconciliation and transaction matching, financial and management reporting, disclosure management (via a partnership with CoreFiling), and ESG and sustainability performance management. Plus, the solution is available both on-premises and via the cloud.

Pros:

• Platform approach that differs from multi-solution approaches (e.g., SAP and Oracle).
• Prebuilt connectors for some ERPs and a data integration engine to integrate with ERPs and other data sources, both financial and operational.
• Ability to combine balance and transactional data in one platform.

Cons:

• Limited to one cube/model per application, affecting performance/scalability; most implementations require creating multiple applications to support processes.
• Limitations on data quality, assurance and drill back result in additional steps, time and manual processes to resolve data issues – with no transparency to drill back to the source.
• Customer base is strongest in Europe but lacks the North American footprint of the other Top 5 vendors.

4. Fluence Technologies

Who They Are: Fluence Technologies is a global software company that provides cloud-based financial consolidation, close and reporting solutions marketed as helping Finance teams close faster, report with confidence and do more with less. More specifically, Fluence Technologies markets a no-code midmarket financial consolidation solution purpose-built to be easily owned and maintained by Finance.

Pros:

• Singular focus on consolidation and close.
• Heritage with legacy solutions (BPC/OutlookSoft, Cognos Controller and Longview).
• Excel front-end that provides a familiar environment for Finance and Accounting.

Cons:

• Siloed solution architecture in that the product combines home-grown, acquired and third-party solutions.
• Solution isn't a complete CPM offering – no planning, no ESG, no tax, inconsistent AI/ML message.
• Data Integration is a user-reported weakness – limited data quality.

5. Board

Who They Are: Board offers a single solution, Board Group Consolidation and Reporting (GCR). Based in Chiasso, Switzerland, where it was founded in 1994, and Boston, Massachusetts, Board markets its product as integrated business intelligence reporting and analytics with enterprise scalability. Board is a private company with customers worldwide, the highest percentage in Europe.

Pros:

• Prebuilt integrators with ERPs and over 270 APIs to multiple source systems that import GL and transactional information.
• Strong base of reference customers in EMEA region.
• Visually appealing UI with tight connection between presentation layer and the back end.

Cons:

• Board requires a tremendous amount of maintenance as everything must be built, meaning there's little pre-built functionality.
• Limited out of the box financial intelligence means critical calculations and formulas must be designed and configured for each customer.
• Financial consolidation is a separate module – essentially a pre-built point solution consisting of dashboards and a pre-defined model.

6. Datarails

Who They Are: Datarails is a financial planning and analysis (FP&A) software company that specializes in helping organizations streamline and automate their financial reporting, budgeting, and forecasting processes. Their platform is designed to enhance Excel-based workflows by integrating data from various sources into a centralized system, thereby improving accuracy, efficiency, and real-time insights for finance teams.

Pros:

• Datarails integrates seamlessly with Excel, allowing users to leverage familiar tools while enhancing data management and automation.
• The platform provides real-time financial insights by consolidating data from multiple sources, improving the accuracy and timeliness of reports.
• Datarails automates manual tasks like data aggregation and error checking, saving time and reducing the risk of mistakes.

Cons:

• Datarails may lack deep customization options found in more comprehensive enterprise-grade financial systems.
• Despite its Excel foundation, users might face a learning curve when adapting to the platform's advanced features.
• The cost of Datarails could be a concern for smaller organizations with tighter budgets, as it targets mid-sized to large enterprises.

7. Centage

Who They Are: Cenage provides cloud-based financial planning and analysis software that helps businesses streamline budgeting, forecasting, and reporting. Their platform offers advanced analytics and real-time insights, enabling more efficient financial management and better decision-making.

Pros:

• Cenage offers powerful automation tools that significantly reduce manual data entry and errors.
• The platform provides real-time financial insights, enhancing decision-making and strategic planning.
• Its intuitive interface is user-friendly, facilitating easier adoption and use across teams.

Cons:

• Cenage’s cloud-based model may pose concerns for organizations with strict data security requirements.
• Some users may find the cost of the software to be higher compared to other financial planning tools.
• The platform's advanced features may have a steep learning curve for those unfamiliar with financial software.

Simplify the Financial Consolidation Process With OneStream Unified Platform

Selecting the right financial consolidation platform is crucial for organizations transitioning from unreliable EPM applications or spreadsheets to a modern, robust EPM solution.

The top 7 solutions featured in this blog each bring unique features and benefits tailored to meet the diverse needs of organizations across various industries.

However, if your goal is to streamline key finance processes and significantly boost confidence in your financial reporting, OneStream stands out as the leading financial consolidation software, capable of handling even the most complex financial reporting requirements.

Learn More About Financial Consolidation

To explore how organizations tackle the complexities of financial consolidation, download our Close & Consolidation eBook. If you're considering upgrading from spreadsheets or outdated EPM solutions and want to kickstart your Finance Transformation with OneStream, we’re here to help—request a demo!

For more insights, browse our comprehensive financial close & consolidation software resource guide.

Did you know OneStream also offers a weekly live demo webinar every Friday for 1 hour on a specific topic? Check out our resources library, too.

FAQs About Financial Consolidation Software

What Are the Key Features of Financial Consolidation Software?

Key features of financial consolidation software usually include automated data integration, intercompany elimination, currency conversion, reporting and analytics, compliance with accounting standards, audit trails, and workflow management.

How Does Financial Consolidation Software Improve Accuracy?

The software reduces manual data entry errors by automating data collection, integration, and processing. It also standardizes data across entities, ensuring consistency and accuracy in consolidated financial reports.

Can Financial Consolidation Software Handle Multiple Currencies?

Most financial consolidation software supports multi-currency transactions, automatically converting and consolidating financial data according to current exchange rates.

Is Financial Consolidation Software Scalable?

Financial consolidation software is designed to be scalable, accommodating the needs of small to large enterprises. It can handle increasing amounts of data, additional entities, and more complex consolidation requirements as a company grows.

What Are the Benefits of Integrating Financial Consolidation Software with Other Enterprise Systems?

Integration with ERP, CRM, and other financial systems ensures seamless data flow, reduces duplication of effort, and provides a more comprehensive view of the organization's financial health. This integration enhances efficiency and accuracy in financial reporting.

Can Financial Consolidation Software Support Real-Time Reporting?

Financial consolidation software often offers real-time reporting capabilities, allowing users to generate up-to-date financial statements and insights whenever needed.

How Long Does it Take to Implement Financial Consolidation Software?

Implementation time can vary depending on the complexity of the organization and the financial consolidation software. It normally ranges from a few weeks to a few months, including data migration, customization, and training.

What Are the Costs Associated With Financial Consolidation Software?

Costs can vary widely depending on the software's features, the organization's size, and the customization level required. Expenses usually include licensing fees, implementation costs, and ongoing maintenance and support.

How Secure is Financial Consolidation Software?

Financial consolidation software generally has robust security features, including data encryption, user access controls, and audit trails, to protect sensitive financial data and ensure compliance with data protection regulations.

What Is the Difference Between Financial Consolidation Software and Accounting Consolidation Software?

Financial consolidation software and accounting consolidation software are related but serve distinct purposes.

Financial consolidation software combines data from multiple business units to create consolidated financial statements, handling complex processes like intercompany eliminations and currency translations. Consolidation accounting software integrates and reconciles accounting entries within financial systems for consistency and accuracy.