Consolidation & close

The first group client

A client with three entities, an intercompany loan and a foreign subsidiary breaks the reporting layer most small firms chose for single companies. The consolidation is done in a spreadsheet, the eliminations are done by memory, and the numbers are right until the month someone is away. A consolidation tool takes the entity ledgers, applies the mapping and the eliminations the same way every month, and produces the group view the client and their bank want.

The threshold for buying one is lower than firms think: two group clients, or one with more than a handful of entities, and the spreadsheet is already costing more than the tool.

What to look for in consolidation

Connections to every ledger the group's entities are on, with a group chart of accounts mapped once. Intercompany matching and eliminations that are rules, not journals someone remembers. Multi-currency with the rates recorded, and the translation reserve handled. Ownership percentages and minority interests where the group has them. And an audit trail from any group number back to the entity ledger line, because the group's auditor will ask.

Then the outputs: group reports in the firm's reporting layer or the tool's own, budgets and forecasts consolidated alongside actuals, and a way to add a new entity without rebuilding the model.

What to look for in close management

A close checklist per entity with owners, due dates and dependencies, so the close is a process the team can see rather than a memory. Reconciliations attached to the checklist items with the supporting documents, and sign-offs recorded. Recurring tasks that create themselves each month. A dashboard showing which clients are closed and which are stuck, which is the bureau view for a firm running several closes.

For the firm's own use, close management turns month-end bookkeeping into a repeatable service with a visible status, which is what makes it possible to hand a client from one team member to another.

Pricing and how firms recover it

Vendors price per entity, per group, or per user, and some by the number of ledger connections. Per-entity pricing maps onto a per-entity element in the client's fee; per-user pricing suits a firm that runs many closes from one team. The directory records what vendors publish; it does not say what a firm should charge for consolidation or close work, and nothing here is fee advice. Firms describe pricing group reporting as a monthly engagement with a per-entity component and the tool cost inside it.

Running the close as a service

The engagement works when the checklist is agreed with the client: which items the firm owns, which the client's staff own, the working-day deadlines, and what the sign-off means. Firms that run it well close on the same working day each month, publish the status to the client, and treat a slipped item as an exception to discuss rather than a favour to absorb.

The failure mode is the firm owning the whole close by default, including the items only the client can do, and then being late for reasons outside its control. The checklist ownership is the defence.

What to avoid

Consolidating in a spreadsheet past the second group client. Eliminations done by memory. Any tool that cannot trace a group number to an entity line. A close checklist that lives in a task app with no reconciliations attached. And accepting a group client's close without agreeing who owns each item.