When the company develops and moves beyond the parental company, the financial statements must be given proper care and the reports must be viewed from time to time. With growth comes acquisitions, mergers, and different investments. It is very important to track and review the accounts of investments and acquisitions. For the reporting purpose, the financial statements of the subsidiary companies are combined and added to the parent company. This process is known as consolidation.
The literal meaning of consolidation is the process of combining two or more things into a coherent whole. In terms of accounting, consolidation is the process in which there are more complexities and one needs to take proper care while combining it. During the consolidation of financial statements, the assets of the subsidiary company become the assets of the parent company and so do the liabilities of subsidiary companies.
Before then the process of consolidation was done manually by the accounting and finance department of the company. This may increase the possibility of making errors and confusion. With the development of technology, many companies started using software that helped in the consolidation of financial statements. Odoo ERP is an up-to-date and flexible tool perfect for running your business. Business functions can be easily operated with Odoo. With centralized databases and integration modules, the business can be run well organized and effectively.
Odoo 14 has modules dedicated to accounting and finance. Consolidation module assists in the process of consolidating financial statements. You can easily install the module from Odoo Applications.
In this blog let us check out the features and benefits that Odoo 14 Consolidation module has to offer.
Efficiency
With the Odoo 14 Consolidation module, the data and work process will be well organized. You can view the consolidation reports with every detail and can review them easily. The financial statements of each subsidiary are clearly stated.
Accessibility
At the dashboard, you can view all the consolidated accounts details. This will help you to get easy access to the records. While doing the consolidation process manually, it will take a lot of time if you want to view the past consolidated records. With the Odoo 14 Consolidation module, every consolidation record can be looked at from the dashboard itself.
Easy to create new Consolidation
In the Odoo 14 Consolidation module, you can easily create a new consolidation analysis. By clicking on the CREATE button from the dashboard consolidation creation page will appear. By entering the consolidation Name, Target Currency, Start Date, and End Date. the list of companies and the period with details such as Consolidation Rate, Average Currency Rate, and End Currency rate will be displayed.
Define, Setup, and Create
When the company grows there will be sister companies and subsidiaries that were acquired. It is not necessary to have all the companies working under the parent company with the same currency. This will be an issue when you try to consolidate financial statements. In the Odoo 14 Consolidation module, you can set the target currency in which the consolidation reports have to be developed. After setting the target currency you can select the method to convert the company’s currency into the target currency. Odoo gives you three types of methods, they are, Closing Rate, average rate, and Historical Rate. The closing rate method uses the exchange rate of currencies of the company at the end of a trading day or month. Historical rates use the historical reference of the provided currencies and how they were traded in the past. The average rate uses the rate at which a subsidiary company’s currency can be exchanged into any other currency. This will make the currency conversion of the consolidation easy and you will not have to do it manually. After selecting the conversion method you can set the currency rates.
Journals
Consolidation entries and the journals of every company working under the same parent company can be viewed and analyzed easily with the Odoo 14 Consolidation module. Consolidated accounts along with their analyzing periods and balance can be viewed by clicking on the Consolidated entries option from the Operations tab. Manually created journals and automatically generated journal entries can be seen separately using the Filters option.
Configuration
The main feature of Odoo ERP is that it allows you to customize most of its modules according to the needs of the company. In the Consolidation module, you can configure Periods, Account Groups, and Consolidation. It is easy to create a new consolidation report of the financial statements, just click on the Consolidation option from the Configuration tab. You can view the existing consolidated reports and by clicking on the CREATE button you can create a new report. You can also view the target currency assigned to each consolidation process, the number of analyzing period records, and the number of consolidated records under each consolidation.
Analysing Period
Using the Odoo 14 Consolidation module you can easily set the analyzing period of the consolidation. You can set the starting date and ending date of the consolidation process. By opting to automatically generate the report, you can get the report of the given periods easily. This feature enables you to execute the process from any date.
Account Groups
Creating account groups and editing them is very easy with the Odoo 14 Consolidation module. By creating account groups it will be easy to review the reports. The consolidated accounts can be grouped under different account groups along with their subgroups you can set under which parent account group each account will be placed.
Closed and Re-compute Consolidation
You can re-compute the consolidation after making changes to them. After completing the consolidation you can give the tag of Closed which will help you to recognize. While recomputing the changes will be reflected in the journals and you will have a modified report.
Saves Time
The process of consolidation requires much time and proper monitoring. With the Odoo 14 Consolidation module, the process can become less heavy and saves a lot of time. With a few clicks, you can define the companies to be consolidated, set up consolidated accounts to make the chart of accounts ready, and create an analysis period. You can view consolidated balance from the dashboard of the created consolidated reports. Mapped and unmapped accounts of each consolidation report are mentioned separately and can have a quick look at them.
Odoo 14 Consolidation module is a great tool for companies having their subsidiaries in foreign countries. The consolidation of accounts can be done very easily and in an organized manner by the authority. With configuration and integration, the consolidation module helps the accounting easier.