financial consolidation

Financial consolidation and master data management – pain areas of global companies

Financial consolidation and master data management

Global standardization of ERP systems is often seen as of great significance by global companies. The decision to embark on such a project, which is very costly and takes a lot of effort and engagement in the organization, entails a huge risk. What are the key factors driving such a large-scale organizational change? Our experience gained during cooperation with multiple companiesshows that these are difficulties encountered in the following areas:


Interestingly enough, once the decision to carry out the standardization project aimed at streamlining processes in the e.g. finance department is made, global companies notice benefits in many other business areas. That was the case at our biggest global customer.

The company has been trying to standardize ERP systems for a long time. Most of its new subsidiaries used Microsoft Dynamics NAV (Navision). There were local installations, with no need to introduce global process standards. Local systems generated reports necessary to manage the entire organization. This level of standardization, however, was sufficient only to some point. Subsidiaries worked on different system versions and managed processes differently. Advanced solutions were implemented in some of them while others lacked proper trainings and did not use NAV at all.

After intense development on various markets, the management found that what the company needed most was a complete standardization which implicated working out global procedures and conditions under which local companies could work in the same manner:

  • simplifying reporting procedures, making it automatic (especially for group reporting) – to avoid report delays,
  • developing a standardized structure for inventory and BOM management– that is Manufacturing Specification managed from one location by the technical department (based in the headquarters).


At the core of consolidation was simplification of reporting by introducing the same chart of accounts in all units. The chart of accounts was divided in such a way as to highlight structures which will be global – obligatory for all companies. The remaining parts (e.g. VAT or income tax) could be dependent on local conditions.

Once the standardization of financial processes was complete, the management of the group quickly realized that a similar approach should be adopted in manufacturing and they extended the scope of the project, mainly in the supply chain management.

What we later experienced in many other project of this kind was financial consolidation and master data management – two major drivers to start the project with the Global Template (System Core).