Procountor's group accounting enables group consolidation, accounting and consolidated financial statements in the software.
About group accounting
Group accounting is a chargeable additional service that can be ordered from email@example.com.
A group is a structure that is composed of two or more limited liability companies. One of the companies is the group’s parent company, which owns the other companies, i.e. the subsidiary companies. To enable group accounting, you need one more Procountor environment in addition to those of the group companies. The group’s parent company and each subsidiary has a Procountor environment of its own.
The additional environment is required for the consolidation of the parent company’s’ and subsidiaries’ accounting in group accounting. The Consolidation environment enables the required eliminations to be made and the creation of the consolidated financial statement.
Procountor’s group accounting includes automated data transfer between the environments. Data transfer has been established so as to enable the automatic transfer of properly dimensioned information from the group companies’ (i.e. the parent company’s and the subsidiaries’) environments to the Consolidation environment. This enables the total group’s accounting to be viewed in the Group environment (Consolidation environment).
Entries which need to be made to the Consolidation environment should be done to its own, separate environment. This new environment should be named for example as Consolidated internal entries. If the entries are made directly to the Consolidation environment, receipt for opening the account will not be automatically generated. In this case the receipt for opening the account will have to be made manually by the user.
Defining the usage settings
The settings regarding the Group environment (consolidation environment) are defined in the section Management > Accounting > Group consolidations.
- All companies must have an identical chart of accounts (if not, exceptions are posted to balancing differences).
- In the Group environment, you must enter the fiscal years, according to which transactions are transferred from the other environments.
- In the Group environment, you define the Source environments from which data is retrieved, i.e. select the parent company and subsidiaries.
- Target dimension information is retrieved from the Group environment. You could, for example, have the dimension “Group” and under that the items Parent company Ltd and Subsidiary Ltd.
- Thus, when retrieving information from environments into the group environment, the entries are dimensioned 100% to the appropriate item. This specifies which company’s data is being processed.
- As the Elimination item you can choose “Elimination”, for example, which has been created under the Group dimension. This will enable you to view the elimination sums directly under the “Elimination” item.
- Balances/entries in the eliminated accounts are imported dimensioned to the target item (the original sign) and to the elimination item (reversed sign), making the sum of the entries zero.
- Accounting accounts that have the word Group in the name are automatically identified as accounts to be eliminated
Automatic data retrieval from environments
Upon each update of the reporting database, data is retrieved from environments and a journal receipt is created for the Group environment (Consolidation environment). Transactions are transferred based on the oldest, open fiscal year of the Consolidation environment. For this reason it is important to open fiscal years to the Consolidation environment but also to close them. Closing of the fiscal years speeds up the process of updating the reporting database.
- The report database has to be updated in the consolidation environment, if the information is to be retrieved during the day. Procountor’s night-time updates update the information automatically.
- The software creates one journal receipt per day, which contains the information of all companies.
- It includes business transactions from the open period (a closed period is not updated; automatic update is run upon closing of the period).
- All journal receipts are updated with respect to the open period. We recognise the consolidation journal receipt and always re-initialise it for the entire open period when we update the report database. This ensures that all changes are included in every case.
- Once the fiscal year has been closed, opening receipts will be generated for the group’s subsidiaries and transferred to the group consolidation environment. No opening receipts are generated in the group consolidation environment.
Please note, when closing the fiscal year of the subsidiary companies, remember to also close the fiscal year of the Consolidation environment. By closing the fiscal year of the Consolidation environment you speed up the process of updating the reporting database.
- If the setting “elimination” is active, balances/entries in the eliminated accounts are imported dimensioned to the target item (Company name) (original sign) and to the elimination item (reversed sign), making the sum of the entries zero.
In the accounting reports, it is advisable to use the report Period by item and items in total. This displays each company’s figures side by side, as well as the eliminated entries.