Your business is growing, which means you may be expanding into new markets, adding subsidiaries, dealing with multiple currencies, adding product lines or opening new facilities.
With that growth comes complexity, especially when it comes to financial close and consolidation. If you’re relying on manual processes, the increasing volume of transactions, multiple reporting requirements and other complexities that come with growth make it harder to close the books quickly and accurately.
Many finance and accounting teams find themselves stuck with time-consuming reconciliations, fragmented financial systems and outdated consolidation methods, leading to errors, inefficiencies and compliance risks.
To keep up, finance leaders need a solution that scales with their business. NetSuite Close Management and Consolidation automates reconciliations, intercompany eliminations and alternate reporting hierarchies, helping teams close faster, reduce risk and provide leadership with timely, accurate financial reports and insights for confident decision-making.
Why Is Financial Consolidation Critical for Businesses?
Financial consolidation is the process of combining financial data from multiple entities, currencies and regulatory frameworks into a single, unified report. It is a cornerstone of accurate financial reporting, compliance and strategic decision-making. When done well, financial consolidation delivers three key benefits:
- Accurate financial reporting helps provide data consistency across entities, reducing discrepancies and errors that can arise from manual aggregation. By automating data collection and validation, businesses can produce more accurate financial statements that reflect the true financial health of the organization.
- Faster close cycles let finance teams deliver timely financial statements, empowering leadership to make informed decisions quickly. By leveraging automation, businesses can significantly reduce the time required to close the books.
- Improved compliance and audit readiness helps maintain adherence to global accounting standards (GAAP and IFRS) and local statutory reporting requirements. Automated compliance checks and a clear audit trail help mitigate regulatory risks, streamline audits and enhance stakeholder confidence.
3 Top Financial Consolidation Challenges and Their Impact
1. Lengthy and error-prone financial close and consolidation processes
Many organizations face delays in their financial close due to manual reconciliations, inconsistent processes among departments and subsidiaries, and fragmented financial data spread across different systems and entities. Without automation, finance teams also spend excessive time gathering, validating and consolidating financial data, leading to inefficiencies and increased risk of errors.
Business Impact
- Delayed reporting
Slow financial consolidation cycles prevent timely financial reporting, which can erode investor confidence and leave business leaders without the information to make decisions. - Higher operational costs
Inefficient, manual processes require significant effort, leading to increased labor costs. - Compliance risks
Late or inaccurate financial statements can result in regulatory penalties and audit challenges. - Lack of transparency
Finance teams struggle to track the status of close and consolidation activities, increasing the risk of missed deadlines and errors and reducing trust in the data within the company.
How NetSuite Close Management and Consolidation Helps
NetSuite automates account reconciliations and intercompany eliminations, reducing manual effort and improving accuracy. With built-in task management, finance teams can track close progress, assign responsibilities and deliver timely completion.
Auto-certification capabilities allow for automated account reconciliations based on predefined criteria, reducing the workload for finance teams and accelerating the close process. Additionally, audit trails provide visibility into adjustments, approvals and changes to efficiently meet compliance requirements and be ready for financial audits.
2. Managing complex multi-entity and multi-currency consolidations
As businesses expand globally, they must consolidate financials across multiple entities, geographies and currencies. Without a single, dedicated consolidation solution, finance teams rely on spreadsheets and manual processes, leading to discrepancies, manual currency translation adjustments and time-consuming intercompany eliminations.
Business Impact
- Data inconsistency
Manual consolidations can introduce errors and inconsistencies across entities, making it difficult to generate reliable financial statements. - Currency translation challenges
Managing foreign exchange adjustments and intercompany transactions manually increases the workload and the chance of errors. - Delayed consolidations
Manual financial consolidation processes and fragmented systems struggle to handle the complexity of multi-entity structures, leading to slow data aggregation, reconciliation and reporting. - Regulatory non-compliance
Adhering to multiple accounting standards (GAAP, IFRS, local statutory reporting) is difficult without an automated solution.
How NetSuite Close Management and Consolidation Helps
NetSuite automates multi-entity consolidations, handling currency translations, intercompany eliminations and adjustments in real time. Built-in rules guide automatic eliminations, reducing the risk of errors. NetSuite also supports GAAP, IFRS and local statutory reporting, supporting efficient compliance with various financial regulations. Additionally, finance teams can perform real-time consolidations, eliminating the need for lengthy end-of-period adjustments and improving financial reporting accuracy.
3. Lack of timely financial visibility and reporting
Many finance teams struggle with delayed and inaccurate financial reporting due to disconnected data sources and manual reporting processes. Without a centralized and reliable financial data system, decision-makers lack timely insights into revenue, expenses and profitability, which can lead to compliance risks and poor strategic decisions.
Business Impact
- Slow decision-making
Leadership can’t react quickly to financial trends and risks without real-time insights. - Inaccurate reporting
Manual consolidation can increase the risk of errors, leading to unreliable financial statements. - Regulatory non-compliance
Outdated or inconsistent data can cause compliance issues with financial reporting standards. - Missed opportunities
Without clear visibility, businesses may fail to capitalize on growth opportunities or mitigate financial risks.
How NetSuite Close Management and Consolidation Helps
NetSuite Close Management and Consolidation is designed to simplify the financial consolidation and close process from start to finish. The cloud application helps improve the accuracy, transparency and timeliness of close processes and reduces the time spent on compliance and audits.
It includes consolidation workflows, dimensions, calculations, reports, dashboards and KPI-based best practices, and these can be easily tailored to your specific business needs. NetSuite Close Management and Consolidation automatically monitors various processes related to the close, facilitates approvals and tracks your progress. It lets you manage your close process in one, central place that’s connected to NetSuite so journals can be posted directly to your general ledger.
Empower Your Business With NetSuite Close Management and Consolidation Capabilities
- Intercompany transactions
Automate intercompany eliminations and minimize manual work with standardized, user-configured rules and processes. - Minority interest calculations
Account for minority interest in entities not fully owned by the parent company to deliver accurate and compliant financial reporting. - Multi-GAAP reporting
Produce reports that comply with local GAAP and IFRS rules with out-of-the-box functionality. - Foreign currency translation
Increase the accuracy of financial consolidations by using standard or customizable currency translations. - Audit compliance
Increase transparency and facilitate easier audits by implementing strict segregation of duties and tracking changes to data and records. - Supplemental data
Build comprehensive statement balances by collecting all supporting data, including transaction records, invoices, receipts and bank statements. - Task management
Monitor and manage accounting and finance tasks with role-based workflows, real-time dashboards and close checklists.
Key Benefits of NetSuite Close Management and Consolidation
- Seamless data integration
Data and metadata come directly from NetSuite ERP for deeper insights. - Data accuracy and consistency
Automatically consolidate financial data from various sources to increase accuracy and consistency. - Easier intercompany processing
Minimize the effort required to manage intercompany transactions by automatically eliminating intercompany balances. - Reduced compliance risk
Meet reporting obligations and adhere to financial regulations more easily with a controlled and auditable environment.
Effective financial close management and consolidation processes are essential for businesses looking to improve accuracy, compliance and efficiency in their financial management and reporting processes. Without automation, finance teams struggle with lengthy close cycles, complex multi-entity consolidations and a lack of real-time financial visibility. These challenges can lead to costly errors, compliance risks and missed opportunities.
NetSuite Close Management and Consolidation provides finance teams with a robust, automated solution that streamlines reconciliations, intercompany eliminations and financial consolidations.
By reducing manual effort, improving data accuracy and enhancing real-time reporting, NetSuite can help you close your books faster, improve efficiency of compliance with global regulations and provide leadership with the insights needed for strategic decision-making.
With NetSuite, your finance team can move beyond outdated, fragmented processes and gain a centralized, scalable solution that supports business growth, whether expanding into new markets, managing acquisitions or optimizing financial operations. By automating key close processes, businesses not only save time and reduce risk but also build a stronger foundation for financial success.
Need Help?
If you need assistance with financial consolidation and want to learn how NetSuite can help, contact us here or call 410.685.5512.
