The process of consolidation exposes a range of challenges, from inconsistent measurement units and differing accounting methods to variations in timing, naming conventions and operational metrics. For example, one entity may record revenue on a different schedule, departments may use different account codes or naming conventions, and operational metrics like headcount can be double-counted if someone works across multiple divisions.

The solution lies in combining strong governance policies with the strategic use of automated tools, says Jordena Tibble CA, product manager for Phocas Financial Statements.

Here, Tibble offers six practical tips for effective data consolidation.

1. Establish a central data hub

The starting point is pulling data from multiple underlying systems into a central location. Automated reporting tools, like Phocas Financial Statements, can ingest data, identify any differences and transform it into a consistent format.

“This single source of truth ensures all stakeholders are working with the same accurate information,” says Tibble.

2. Define clear measurement policies

Clear rules and consistent measurement ensure that data from different entities can be accurately compared. Taking time to standardise units, time zones and other critical metrics through strong governance policies makes it easier in the long run, Tibble says.

3. Eliminate duplicated data

Consolidation, either financial reporting or data systems, requires the same ethos: you must ensure you are counting things once, not twice, says Tibble.

4. Use tools to align data

Leveraging reporting tools to handle financial reporting discrepancies creates comparability across the organisation.

“With a tool like Phocas, finance teams can import data in different standards to align them consistently outside the ERP [enterprise resource planning],” says Tibble.

5. Standardise reporting templates

Tibble says, “A standardised layout ensures the format is identical, meaning users don’t have to think about structure or terminology.”

6. Control access and leverage insights

There are two approaches to data access, says Tibble. “It can be open for everyone to see as much data as they like and just restrict sensitive information, or alternatively provide only the information the user needs. It comes down to finding the right balance for your organisation.”

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