In this guide, we will walk you through the process of creating consolidated financial statements in Dynamics 365 Business Central. This task is surprisingly straightforward, and to illustrate the process, we’ve set up a holding company for our demonstration. This holding company serves as the consolidating entity, distinct from operational companies. We’ll also discuss the inclusion of eliminating entries, if required.
The Holding Company Setup
Our demonstration involves a holding company, which is responsible for consolidating financial data from two operating companies—AM Industrial and Cronus. Additionally, we’ve entered one elimination entry into the holding company, aimed at eliminating a portion of an intercompany sale. This entry was posted within the holding company.
The Consolidation Process
When you’re prepared to initiate the consolidation process, you can conveniently do so from the business units screen. This process involves several steps:
Running the Consolidation
Access the ‘Actions’ menu and select ‘Run Consolidation.’ The system will run the consolidation for a specified period
Consolidated Trial Balance
Following the consolidation process, you can generate a consolidated trial balance. This report provides a detailed breakdown of accounts. On the left-hand side, you’ll find the individual operating companies listed. Scrolling down, you’ll also see the elimination entry we entered for this consolidation. Remember, this entry was initially created as a standard journal entry within the holding company.
Leveraging Account Schedules
Dynamics 365 Business Central includes a valuable tool called account schedules, which we can use to access consolidated financial information and perform in-depth analysis. Let’s explore how to set up and utilize account schedules:
Creating Account Schedules
To begin, we’ve created an account schedule for consolidated income statements. Let’s delve into the setup.
We’ve designed a row format for consolidation that imports the chart of accounts from the holding company. The system automatically incorporates totals and subtotals for your convenience.
Our column layout includes both operating companies, with totals included. This enables you to generate a standard account schedule report.
Analyzing the Consolidation
Beyond reporting, account schedules offer powerful analysis capabilities. In the ‘Overview’ section, you’ll find a process overview that displays different operating companies in columns.
Drilling Down for Details
Here, you can drill down to explore underlying entries, providing a comprehensive view of your consolidated data. For instance, you can drill down into specific income accounts to access ledger entries, which reveal all transactions contributing to both the consolidated entity and individual operating entities.
Exporting to Excel
An excellent feature is the ability to easily export this data to Excel. The system generates a workbook, allowing you to apply Excel formatting to tailor your reports according to your preferences. You can also refresh this spreadsheet whenever needed.
Adding Graphical Elements
If you wish to enhance your reports further, you can include graphical elements like graphs to visualize your data effectively.
Once customized, you can save your report as a template. This enables you to maintain a consistent format for future use.
In conclusion, this guide provided a comprehensive overview of creating consolidated financial statements in Dynamics 365 Business Central. We discussed the setup of a consolidation company, the integration of business units, the inclusion of elimination entries, and the consolidation process itself. Additionally, we explored two different trial balance reports and harnessed the power of account schedules for both reporting and analytical purposes.