For many years it seems like every mid-market and enterprise resource planning (ERP) vendor has aspired to offer native financial consolidation software. However, they all seem to fall short, often to the disappointment of customers that were promised that their new ERP system easily could produce the consolidated financials from their individual subsidiary ledgers.Â
So why is it so hard for an ERP vendor to deliver the necessary financial consolidation functionality inside the ERP system itself? There can be any number of reasons.
Limitations in Current Financial Consolidation ERPs
- Lack of ability to handle different chart of accounts
- Lack of ability of consolidating across subsidiaries with different fiscal calendars
- Poor currency conversion functionalityÂ
- Weak auto-elimination functionality
- Tedious to post manual consolidation adjustments
- Weak financial report writer to produce the consolidated reports
- Clunky consolidation process with too many stepsÂ
- Problematic to consolidate across subsidiaries with different ERPs
- Lack of dynamic pro-forma consolidations
It would be a controllerâs dream if all of these areas were elegantly handled within their ERP system. And, while most mid-market and enterprise ERPs typically can check all or most of the boxes for consolidation features, almost always, consolidating in the ERP it is simply too clunky with too many steps. Because of this, the finance team ends up doing it in Excel where they at least are comfortable with formulas and they can produce professional report layout.Â
Microsoft Dynamics 365 Finance ERP
But what about the Microsoftâs Dynamics 365 FinanceÂ (D365 FO) ERP system?Â
While it clearly can be considered one of the top cloud solutions on the market today- alongside SAP, Oracle and Workday– customers with significant consolidations and related financial reporting needs, often end up in Excel in the final steps of the process.Â
While there are plenty of ERP consolidation features in D365 Finance, and while its native Management Reporter is an above-the-average report writer it is a quite old technology, it is increasingly normal that customers add on a âbest-of-breedâ corporate performance management (CPM) solution to streamline their financial consolidation and reporting software.Â Â
Modern cloud-based CPM solutions
Solver is an example of a CPM solution that comes with several added advantages for Microsoft customers.
Advantages of Solver CPM for Financial Consolidation
- Solution is cloud-based on the Azure platform like D365 Finance
- It has a “QuickStart” rapid integration tool and ready-to-use reports and budget forms that all deploys in 1 day
- It has a pre-built connector and dashboards for Power BI dashboard visualization
Some cloud-based CPM vendors also offer an Excel add-in to give power users more flexible and familiar report design.Â
End users can still run the same reports in the cloud using their web browsers. They could do the same using their local Excel on the desktop connected to the CPM database in the cloud.
An added advantage of modern cloud-based CPM solutions is that they typically also house advanced budgeting and workflow capabilities. This allow for a single solution and a single report/form designer for both financial reporting, consolidations and budgeting.Â
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Dynamics 365 Finance, a leading ERP solution, is a great cloud-based transaction platform because it drives better data and accounting processes. A modern CPM solution with a snug fit on top of D365 Finance and that compliments visualization in Power BI checks the boxes that a finance team needs to take their ERP financial consolidations and reporting processes to the next level.