Using IBM Planning Analytics for Consolidations

Brian Moore, February 14, 2023

Existing customers of IBM Planning Analytics are likely performing consolidations of some sort, and oftentimes using different software systems to do so. These organizations come to realize that by layering the consolidation process into their Planning Analytics system, they can save by not having to license and maintain multiple systems, train personnel on different products, and address technical issues with compatibility. This article will cover the many benefits of using Planning Analytics, or PA, to perform consolidations.

Table of Contents

Merging Multiple Source Systems

The main benefit and use case for consolidations in Planning Analytics is the ability to merge multiple source systems into one set of financials. PA has the ability to automate the importation of ODBC (Open Database Connectivity) compliant databases as well as upload flat files from offline and historic systems. In addition, customized mapping of different Charts of Accounts can be fused together seamlessly, so that reporting in different source Charts of Accounts as well as one global consolidated Chart of Accounts is possible. These features allow companies with ongoing merger and acquisition activities to swiftly produce consolidated financials that include newly acquired entities in a matter of weeks and not months.

Intercompany Eliminations

In situations like the previous paragraph where a large conglomerate operates multiple sets of books for different entities of the company, it is likely that Intercompany Eliminations are needed. Planning Analytics is a great candidate for performing these calculations. In this scenario, PA is able to cancel out transactions from across the organization to avoid double counting and offer a SOX compliant global representation of the corporate financials. Intercompany transactions can be automated and dynamically posted each month to streamline the close process.

Multiple Foreign Exchange Rates

Currency translation is another great opportunity to utilize the power and flexibility of Planning Analytics. The ability to enter multiple foreign exchange rates per currency to handle the conversion of monthly average transaction activity in the Income Statement, as well as point in time translation of month end balances for the Balance Sheet, historical equity transactions at a fixed exchange rate, and no translation for statistical accounts allows the program to cover all possible reporting needs of a global enterprise. These translation rates allow all countries and regions to plan in their local functional currencies and then have the numbers translated into a single reporting currency at the corporate level. In addition, Currency Translation Adjustments can be calculated with the system if they aren’t being accounted for in the source general ledger, or GL, system.

Conclusion

In conclusion, though the name Planning Analytics often pigeonholes the application into budgeting and forecasting use cases, many customers of PA have seen great benefits from using the tool for consolidated financial reporting as well. PA is well suited to serve as an all-in-one solution for consolidating multiple general ledgers, performing intercompany eliminations, and translating foreign currencies from dozens of countries, ultimately producing a coherent consolidated set of global financial reports. Wrapping all of these capabilities into the platform alongside a world class budgeting and forecasting solution conserves licensing expenses, lowers total cost of ownership, and greatly enhances the value of the investment in IBM Planning Analytics.

Next Steps

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