Consolidated company budget

To effectively manage cash flows, the financier needs to pay a lot of attention to the consolidated budget of the company, taking into account the specifics of interactions between structural divisions, subsidiaries of the group and departments among themselves. So, the consolidated budget is a document common to the whole group of companies. It consists of separately taken for each structural subdivision of budgets and is formed proceeding from a principle of functioning of all group as one whole, without division into separate divisions.

Reporting group of enterprises

During the analysis of the group's reporting, it is necessary to distinguish between the parent company and the parent company and its subsidiaries. Here it is worth noting that the parent company controls the activities of the group.

To obtain full information about the state of affairs in the company, which includes a group of several interrelated enterprises and organizations, the consolidated financial statements are used. With its help, you can analyze the property and financial position of all group companies on a specific date, get information about their overall profitability.

Consolidated statements are prepared when the parent company:

• Has a majority of the shares of another legal entity or is a member of its founders (owns more than 50% of the authorized capital);
• Has the ability to influence the adoption of decisions of subsidiaries.

Consolidated reporting by group of companies contains assets, liabilities, capital, income and expenses of several legal entities that are part of the company structure. It gives an opportunity to form a general idea of the group's activities.

Issues related to budget consolidation

A financier can face the following difficulties during the preparation of a consolidated budget:

• In different structural divisions different principles of which are supported in the formation of the budget. All the departments or enterprises of the holding carry out planning of expenses and incomes taking into account only their own peculiarities, they only provide their own types of articles. In short, there is no single uniform budget template;
• The need to consolidate the budgets of enterprises that work in different areas of activity, have a different cost structure;
• As a result of the growth and expansion of the company its structure, number of units, types of activities, etc. change, and all of this needs to be promptly reacted and make changes to the budget;
• A large array of data that must be constantly processed, analyzed, formed and accounted for based on the information received, weighted solutions.

In order to neutralize all of the above, automation of budgeting is used, which allows to speed up the processing of information, to form a consolidated budget, and to exercise constant control over its implementation.

One of such programs are programs for management accounting, which is already used by companies in Moscow and Russia is WA: a Financier.

Using it, you can:

• Implement a unified methodology Budgeting;
• Create a unified budget template;
• To consolidate the budgets of different departments and the company as a whole;
• Carry out analysis of the implementation of plans for different parameters;
• Monitor compliance with plans;
• Form consolidated financial statements, depending on the requirements and tasks that the CFO is facing.