Communications Pangea/October 11, 2018 /Dynamics 365/Finance/ 5 min read

Implement Online Company Consolidation in D365 Finance

Keep this entry for future references

Company consolidation processes are a frequent challenge that we face with Microsoft Dynamics 365 Finance implementations. Some companies have different subsidiary companies in Latin America; for this reason, we need to create separate entities and separate charts of accounts (COA).

Implement Online Company Consolidation in Microsoft Dynamics 365 Finance

This article will focus on the Online Company Consolidation capability in Microsoft Dynamics 365 Finance and how to implement it efficiently.

1.    Create a Company Consolidation entity

First, we will create a company consolidation entity in Microsoft Dynamics 365 Finance, following this path. 

Organization Administration Organization ➡ Legal Entities.

Click on New, then input the complete name of the new company, the short term, and the country this new company is from. After that, mark Yes for Use for financial consolidation process and Use for financial elimination process (Use this if your company manages intercompany transactions).

Next, we will add the entity into the organization hierarchy; to do so, we will follow the path below. Once there, click on Insert, then legal entity, and select the Legal Entity we just created and locate it whenever we desired to be within the hierarchy.

Organization Administration Organization Organization Hierarchies

2.   Company Consolidation legal entity setup

Since this is a legal entity, there are some configurations that we need to do:

2.1. Generate number sequences

The first step is to generate the out-of-the-box Number Sequences that will be assigned to the processes performed in this company.

Organization Administration Number Sequences Number Sequences

Once in the form, click on Generate and follow the wizard.

This wizard will assist you with the process, follow the shown steps, and the Number Sequences will be created for the new company.

2.2. General ledger parameters

To configure this parameter, click on:

General ledger Ledger Setup General ledger parameters.  

Then, click on Batch transfer rules and change transfer mode to Synchronous. This option allows to immediately transfer source document subledger journal entries to the general journal.

2.3. Ledger setup

Click on the consolidation and elimination entity to configure ledger parameters. For this purpose, follow:

General ledger Ledger Setup Ledger.

Remember to consider the COA we want to report before setting up the ledger for the consolidation entity. Also, Microsoft Dynamics 365 Finance will create all reports by default with the accounting currency we set up here.

2.4. Company Consolidation number sequence

Go to the consolidation entity and create a number sequence for elimination journals at:

Organization Administration Number Sequences Number Sequences

2.5. Journal name

Use an elimination journal if the company manages intercompany transactions. This journal will remove the additional entries that were created when posting intercompany transactions.

To start the configuration, we go to:

General Ledger Journal Setup Journal Names and click on New.

2.6. Accounts for automatic transactions

To configure this parameter, we click on:

General Ledger  Posting Setup Accounts for automatic transactions.

As soon as we have selected this option, we need to configure accounts for transaction types.

2.7. Company Consolidation accounts

Part of the company consolidation process is to map consolidation accounts to their corresponding statutory account. In this case, I am consolidating with a legal entity, so we need to consolidate from our local accounts to our global accounts.

Select each company we want to consolidate and enter the consolidation account or our global account.

For this, go to: 

General Ledger Chart of accounts Accounts Main accounts.

Select every account and map to the global COA.

• Global COA:

• Local COA:

We have completed the setup for the consolidation legal entity, and we are now ready to consolidate our balances.

3.    Consolidate in Dynamics 365 Finance and Operations

First, we will access the consolidation module in Dynamics 365 Finance.

First, click on Consolidations Consolidate Online.

Go to the core options to create our consolidations. Be very careful when selecting every option to get accurate results.

3.1. Criteria

Main account:

Select the accounts that should be included in the consolidation. If we do not select an account range, Microsoft Dynamics 365 will show us all charts of accounts.

Use consolidation account:

If we set this option to Yes, the field’s selected consolidation account becomes available. Select whether all accounts should be merged to the consolidation account set on the Main accounts page or whether we want to select the account from one of the consolidation account groups.

Consolidation period:

Select the range of dates for the consolidation.

Mark the checkmark for:

Include actual amount and Rebuild balances during the consolidation process.

• Legal entities

Select the legal entities that should be consolidated.

• Currency translation

We define the legal entity, account and exchange rate type, and rate on the Currency translation tab. Then, three options are available in the Apply exchange rate from the field:

Consolidation date:

Use the consolidation date to get the exchange rate. This rate is equivalent to the spot or month-end rate. We will see a preview of the rate, but we can’t edit it.

Transaction date:

In this scenario, use the date of each transaction to select an exchange rate. This option is most often used for fixed assets and is often referred to as a historic rate.

User-defined rate:

After we select this option, we can enter the exchange rate. This option can be helpful for average exchange rates or consolidating against a fixed exchange rate.

Then click on OK, and the online company consolidation process will begin. It can take several minutes depending on the number of transactions and companies that we need to consolidate.

4.         Check your Company Consolidation Transactions

There are several ways in which we can view the results of our consolidation process. So let’s take a look at a few of them:

4.1. Trial balance

Go to General ledger Common Trial balance

Also, we will visualize a consolidated trial balance for the periods on which consolidations were performed.

4.2. Company Consolidation Transactions

Click on Consolidations Consolidation transactions. Here, we will be able to get all entities for which consolidations were performed and all the transactions brought over for the consolidated period.

If you follow the steps mentioned above and have a clear vision of what your company requires, I do not doubt that you’ll be able to perform consolidations and create reports without any major issues.

Thank you.

Microsoft Dynamics 365 Finance has many powerful capabilities for your company to enhance your business processes and operations.

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