Financial Consolidations for Sage X3

In this article, I’ll explore your best options for financial reporting and consolidation software for your Sage X3 data management and analysis processes.

There is a population of Sage X3 users who are responsible for the financial consolidation of parent company data with one or more subsidiaries.  Aggregating financial information from multiple entities, sometimes with diverse monies, can be challenging if you do not have a modern financial consolidation tool to sit atop Sage X3 and any other accounting system that can be used within your company.  Data is only increasing in amount and importance to organizational decision-making.  That is why more execs are looking for the right tool to empower their business end users to consolidate data into a singular set of financial reports.  This article will zoom in on your software choices for modern, dynamic, and easy-to-use financial consolidations with Sage X3.  For rapid growth organizations, a quality reporting and consolidation tool can also have the ability to extend the life of your Sage X3 implementation.

Financial consolidation typically brings together subsidiary transactional general ledger information into a unified set of financial statements for a parent company.  These reports almost always entail Profit & Loss, Balance Sheet and Cash Flow statements, comprised of subsidiary data as a demonstration of a parent company’s status quo.  Aggregations can involve currency conversions for diverse monetary types, eliminations for transactions between subsidiary entities, and any other adjustments that have to be completed manually without today’s technology.  There are plenty of reasons to shop for a modern consolidation tool, but let’s talk about two common motivators.

Two basic reasons your finance team might be seeking an automated consolidation software involve product age.  Some are hoping to ditch their mature tools, like manual Excel spreadsheets that are too low-level to meet today’s business needs.  Others are wanting to get rid of their older technology because it is too complex for business end user management, like Cognos or Hyperion.

Several Sage X3 users that are responsible for financial consolidations for multinational organizations have told me about their regular tasks.  Some are routinely converting currencies and manually making adjustments to month-end consolidations in order to meet domestic and global regulations, such as the International Financial Reporting Standards (IFRS) to Generally Accepted Accounting Principles adjustments (GAAP), usually referred to as IFRS to GAAP.  Some had deep analyses requiring sub-ledger information and want a solution that is part of a complete suite of Business Intelligence (BI) tools, fully integrated with solutions for ad-hoc reporting, data visualizationsplanning processes, and BI data storage.  Let’s zoom in on what you should know as a Sage X3 customer regarding how to find the best software for your corporation.

This blog has covered your data integration options before, but you can consolidate your information using the built-in reporting function in Sage X3 for real-time analytics.  This option is less flexible in report design, lacking depth in consolidation features, and potential sluggishness when querying data, depending on the query size and if they’re performed simultaneously, but this is related to financial consolidations not being the primary focus of an accounting system.  Most third party software vendor consolidation tools offer you the option to query data from a high performance BI data store.  But this integration type does require you to replicate your GL data from Sage X3 to an online analytical processing (OLAP) cube or a data warehouse.

Organizations with fewer subsidiaries to aggregate, with less complex or no currency conversions necessary, and/or without a need to perform more substantial, simultaneous data queries might prefer to just rely on Sage X3 native roll-up abilities, which would suffice.  You can also utilize Sage X3 if you are not going to query data from other sources for your analytics, performing complicated automated eliminations, or other adjustments beyond what Sage X3 can do.  That said, BI data stores usually enrich financial consolidations by incorporating GL data from X3, so this route might be helpful for parent companies with more robust aggregations.

You can configure regular replication of your information to a Cloud or on-premises OLAP cube or data warehouse, or you can send your data with the click of a button.  Sage X3 data usually replicates through a pre-built integration that links to the Sage X3 database that will fill the BI data store.  Consolidations are completed with a high performance because of the stability and power that a cube or data warehouse offers.  Companies with more complex adjustments, currency conversions, bigger or simultaneous queries, and/or just a significant amount of company data to aggregate will benefit from BI data stores.  You should also weigh what modern consolidation features you need to take care of your particular consolidation needs.

Currency conversion and consolidation adjustments. Currency conversions are exactly how they sound: diverse currencies get converted into one money type in your set of financial statements.  Consolidation adjustments empower finance teams to meeting national and international accounting regulations, update inventory, and/or temporarily fix subsidiary information that is incomplete, among other tasks.  Basically, these adjustments help in statutory statement submissions.

Intercompany eliminations.  Here and there, subsidiaries might buy or sell their goods and/or services to/from each other, which cancels out for the parent company.  Functionally, intercompany eliminations remove these exchanges from the balance sheet and the P&L – and re-allocating the goods or services, which can completed with Sage X3 or a BI data store.  Some BI software even offers configurable Excel input forms that you can use to manually adjust or get rid of intercompany transactions in simple ways.

Allocations, reconciliations, and modeling organizational changes.  Some organizations use allocations to assign particular expenses and/or revenue to specified departments, divisions, and/or companies.  Sage X3 can perform the allocations, but some data stores also can perform custom-built allocation processes of varying levels of complexity within the cube or data warehouse interface.  Should you decide to go with a BI data store, plenty of companies prefer to have either the parent company or the subsidiary team reconcile information to ensure accuracy, which can be completed with Sage X3, BI front-end tools, or in an OLAP cube or data warehouse.  Finally, some software allows you to model reorganizations, divestments, and/or acquisitions by duplicating and altering infinite hierarchies or company trees that you need.  This will allow you to see what kind of effect certain activity would have on your portfolio.

Shopping for a financial consolidation tool can be overwhelming and confusing, due to the complex nature of the task.  Solver, Inc. is happy to answer questions and generally review BI360’s easy-to-use, Excel- and web-powered consolidation tool for Sage X3 with both real-time or data warehouse integrated analysis, comprehensive reporting, budgeting, dashboards and collaboration as a way to accelerate company performance management.

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