Consolidation rules
Consolidation rules are the backbone of the financial consolidation process. They define how data should be moved, transformed, or eliminated in order to produce consistent and reliable group-level results.
Unlike traditional solutions, which often rely on complex scripting, our approach allows business users to design and adjust rules directly through an intuitive web interface. This makes the process more agile, less dependent on IT, and easier to adapt to changing business requirements.
Purpose
Consolidation is not just about aggregating numbers – it’s about ensuring that the reported results are accurate, comparable, and compliant. Groups face challenges such as FX conversion, reconciliation and elimination of intercompany transactions, elimination of intercompany margin on resell of assets and inventories, capital elimination, adjustments for all capital movements, consolidated cashflow preparation and special reporting adjustments.
Consolidation rules are designed to:
- Standardize processes across entities.
- Automate routine tasks such as eliminations, adjustments, carry forwards or clean-ups.
- Empower finance users to create and adjust rules without coding.
- Increase transparency and auditability of the consolidation process.
- Improve speed and accuracy by reducing manual interventions.
In essence, consolidation rules bridge the gap between technical consolidation logic and business needs, enabling finance teams to stay in control.
Key features and capabilities
The solution supports four main types of consolidation rules, plus a grouping feature:
Business rules form the foundation of consolidation logic. They define how data is moved from source accounts to target accounts, and what factors should be applied in the process.
Key elements include:
- General settings – such as ID, description, parent rule group, and runtime notes.
- Prefiltering – narrowing the scope of processed data by attributes, context, fixed members, prompts, or reporting periods.
- Scope – restricting reporting units based on defined criteria.
- Rule table – the core of business rules, allowing definition of source and destination members, factors (constants, variables, FX rates), and the sequence of processing.
Rule Detailed Table
Deletion rules remove unwanted or temporary data members from the consolidation process.
The setup is identical to business and copy rules.
Useful for cleaning up technical accounts or removing obsolete data.
Rule table handles your automated processing of the data. It lets you select the source coordinates, define the processing and also the target destination.
In the processing part you can use:
- Simple multiplication by constant (e.g. multiplication by -1 to reverse previous adjustments)
- Variable (e.g. tax percentage)
- Scope factor ( e.g. non-controlling interest rate, including the change from the start of the period)
- Formula (e.g. rounding to thousands / milions)
Sequences
Business rules sequences define the automated workflow of the consolidation process. They allow users to organize the order in which individual business rules are executed. Users can add/change/manage individual steps and also include validations, prompts for users or notifications.
You can combine multiple sequences to create you full consolidation process – that can be run as one-click action from Consolidation Monitor.
Group Structures
Rules can be activated depending on the reporting unit position in the group structure and also changes made to the group structure.
It is possible to identify changes in the group structure from the start of the time period, such as acquisitions, disposals, step-up acquisitions / disposals, mergers/fusions, splits, change of consolidation method and also resell of company within the consolidated group.
Examples of consolidation rules
The power of consolidation rules becomes clearer when looking at real-life use cases:
Dividend elimination A business rule moves all values from Account 3000 (Dividends) to Account 8000 (Eliminations) with a factor of -1, ensuring intercompany dividends are properly eliminated.
FX revaluation Variable factors linked to FX rates automatically revalue local currency amounts into group currency during consolidation.
Technical account cleanup A deletion rule clears Account 9999 (Technical balancing) after the consolidation cycle is closed.
Revenue copy A copy rule replicates revenues from multiple reporting units into a group entity for consolidated reporting.
Intercompany eliminations A procedure template matches and eliminates intercompany receivables and payables across entities.
Adjustments for reporting period Prefiltering limits a rule to Q1 2025 only.
Attribute-based allocation Business rule with attribute filter redistributes costs to entities tagged “Shared services”.
Threshold-based filtering Amount filter excludes transactions below EUR 100.