Finding the Right Financial Consolidation Software To Suit Your Needs

To prepare consolidated financial statements, it is necessary to combine the financial data of the individual legal entities of an organization, eliminating intercompany transactions. The correct preparation of consolidated financial statements is essential for companies from both a financial and a legal perspective. They serve as a guide for group-related decisions, as well as for planning and controlling the entire organization.

We use the term financial consolidation to describe the disciplines of legal or statutory consolidation and management consolidation. While legal consolidation focuses on the consolidation and internal reconciliation of the individual financial statements of group companies to the consolidated financial statements in accordance with legal requirements (e.g., IFRS), management consolidation covers the aggregation and reporting of management-relevant information for corporate management (e.g., consolidation of business units).

Modern software solutions for financial consolidation and the preparation of consolidated financial statements must provide solid support and functionality for the key processes and core tasks. Unlike other software segments, the market for financial consolidation software is not characterized by rapid development and constant adoption of the latest technology trends. Software tools need to fulfill the core tasks of consolidation correctly from a business perspective and have to support the creation of a consistent consolidated group balance sheet and income statement.

The Financial Consolidation Survey evaluates the solutions in this software market in detail. Our focus is on asking business users who work with them on a daily basis for their informed opinions about these tools. This valuable feedback helps compare the flowery marketing promises of software vendors with actual user feedback, and can be a great help for companies in the process of choosing suitable software.

This article will reveal:

  • a head-to-head-comparison of the featured products.
  • the most important lessons learned from surveying hundreds of respondents about financial consolidation software usage and selection.

The Financial Consolidation Survey: Head-to-head financial consolidation tools comparison

This interactive dashboard enables you to compare two financial consolidation tools based on aggregated KPI results from The Financial Consolidation Survey 24. See how the different financial consolidation products stack up against each other by selecting two products of your choice.
*Charts generated using this tool summarize the collective opinion of a group of end users and do not necessarily reflect the views of BARC. Judgments as to the superiority or otherwise of individual products should not be solely based on these charts. Many of the products featured are not directly comparable with each other so care should be taken to ensure meaningful comparisons are made.
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No one knows more about how a financial consolidation tool performs in the real world than the customers already using it. All too often, they find that products don’t live up to expectations, or that the vendor does not support its product(s) properly. Therefore, when comparing software, there is almost nothing more valuable than user reviews.

This is where The Financial Consolidation Survey comes in. Collecting feedback from financial consolidation software users every year, we are able to provide detailed analysis of which software products get the best user ratings. This year, The Financial Consolidation Survey is based on the analysis of the real-world experience of 531 respondents with 309 answering a series of detailed questions about their usage of a named financial consolidation software tool.

It is the largest and most thorough fact-based analysis of the financial consolidation software market currently available, using comprehensive analyst experience to evaluate market trends and challenge some of the industry.

This edition features a broad range of software tools, not only from the well-known software giants, but also specialist products from much smaller vendors that ordinarily don’t get much press but which, in many cases, offer outstanding value to their customers.

Altogether, The Financial Consolidation Survey 24 compares 9 financial consolidation tools in detail. To be included in the detailed analysis, a tool requires at least 18 user reviews.

The KPIs

The Financial Consolidation Survey 24 examines financial consolidation software product selection and usage among users in categories (KPIs) including Product Satisfaction, Recommendation, Functionality and Business Benefits. There are 30 KPIs in total.

Different readers will have their own views on which of these KPIs are important to them. For example, some people will regard ease of use as critical, whereas others may consider financial consolidation functionality and support services to be more important.

Consequently, we think reducing the KPIs to only one aggregated score is too simplistic to be helpful when seeking out the best software to match your needs. In our view, there are at least five crucial KPIs when it comes to comparing financial consolidation tools from a user perspective. They are made up from 25 individual root KPIs:

Business Value is possibly the most important KPI, focusing on bottom line benefits of financial consolidation projects. Business benefits are the real reason for carrying out any software project. Software that does not deliver broad business value is superfluous. The Business Value KPI shows how a successful financial consolidation software product can provide these benefits in the real world. The KPI combines the Business Benefits, Project Success and Project Length KPIs.

The Competitiveness KPI gives insights into how financial consolidation tools perform in a competitive selection process as well as the strength of a product’s market presence. It combines the Considered for Purchase and Competitive Win Rate KPIs. Recognizing which financial consolidation software to compare entails understanding which tools have fared well in other organizations’ product selections. This enables users to eliminate ‘losers’ at an early stage in the selection process.

We combine the Price to Value, Recommendation, Vendor Support, Implementer Support, Product Satisfaction and Sales Experience root KPIs to calculate this aggregated KPI. These factors are clearly related: if one is lacking, then the importance of the others is accentuated. A customer is basically satisfied if the expected benefits are derived from the money that was paid. If the tool exceeds expectations and the user is treated well and individually, then satisfaction logically follows. This KPI indicates how much the tool and vendor meet the expectations that were generated by the vendor’s marketing and sales but also other information sources.

Year after year, feedback from BARC survey participants underlines just how critical it is that the functionality of a product meets the requirements of a company to deliver maximum business value. For this reason, careful evaluation is required in every software selection project. After all, what use would the software be if it were incapable of enabling us to perform the tasks required of it? In the aggregated Functionality KPI, we combine the Modeling Flexibility, Predefined Connectors, Data Entry/Upload, Currency Management, Workflow, Intercompany Reconciliation, Consolidation Functionality, Traceability & Auditability, Financial Reporting/Disclosure Management and Financial Planning KPIs to calculate it.

Delivering a superior user experience is more important than ever. Finance professionals need user-friendly solutions that can be set up and used in a self-service approach in business departments. For this reason, they are looking for easy-to-use interfaces and good support in their processes and workflows that is based on a performant and reliable software platform.

The KPI rules

Only measures that have a clear good/bad trend are used as the basis for KPIs.

KPIs may be based on one or more measures from The Financial Consolidation Survey.

Only products with samples of at least 15 – 20 (depending on the KPI) for each of the questions that feeds into the KPI are included.

For quantitative data, KPIs are converted to a scale of 1 to 10 (worst to best). A linear min-max transformation is applied, which preserves the order of, and the relative distance between, products‘ scores.