When Should You Move Beyond Excel for Consolidation?


Nowadays, the role of finance professional is evolving into that of a partner for business and operations. To be effective in this new role, the finance team must hone the ability to transform data into meaningful information and insights that can support and drive the decision-making process.

An effective consolidation process has the potential to communicate such information throughout the business cycle – through peaks and troughs and everything in between. And, of course, consolidated financial statements provide C-level executives, board members, and other stakeholders insight into the overall health of the enterprise on a regular basis.

Many companies still rely on Excel spreadsheets for processing and reporting consolidation figures. Certainly, an Excel –based consolidation offers some advantages. Finance professionals and business owners are very comfortable with Excel, its use requires little to no IT support, and the overhead cost is low. Excel can also offers functional flexibility, easy cell formatting, pivot tables, and stylish graphs and charts at the click of a mouse.

However, as companies grow in size and complexity, the shortcomings of Excel start to become apparent. When business complexity grows (such as adding foreign entities, using multiple ERP systems, mergers, and deconsolidation) the number of spreadsheets required for consolidation grows exponentially, becoming some sort of card castle, where stability and balance are at constant risk. As more people become involved in the consolidation process, Excel’s file access limitations start delaying the process. One delay can affect the work of many people, as well as eating up valuable time. Multiple contributors also make tracking of changes much more difficult and weaken data integrity. Efficient auditing is virtually impossible.

When a what-if analysis is needed, say for the selling of a business unit or the consideration of a cost-saving initiative, the use of Excel can also be very challenging as different assumptions are explored or changed.

In the following chart, I have laid out where Excel-based consolidation solutions can likely be effective, and where an advanced consolidation solution is likely needed. The two primary dependents are business complexity and technology sophistication.

benefits of an advantaged consolidation solution - CCH tagetik blog

In my experience, there are several key indicators that signal when it’s time to hang up the Excel spreadsheets and move to an advanced consolidation solution. These include:

  • business complexity
  • the need to import data from multiple sources
  • a growing number of participants in the consolidation process. 


Other reasons range from:

  • a lack of confidence and control of data
  • an inordinate amount of manual work required
  • the need for analysis and commentary on results

benefits of an advantaged consolidation solution - CCH tagetik blog


An advanced consolidation system will solve the shortcomings of an Excel-based model while increasing reliability, data consistency, and tracking every access and every contribution. It will boost users’ collaboration and awareness of the consolidation process. What-if analysis will be easily carried out with a few system steps. All contributions will be done simultaneously in real time, but within a certain timeframe with a visual tool such a graphic workflow showing submission progress. Data validations can be performed on submission, increasing data quality. There is no risk of losing changes or having several copies of same information because there is one single version of the truth.

User experience will be maximized by the use of an advanced system that will combine web-based workflows as well as Excel-like data entry forms and output reports, making it easy to export results to Excel and other Office instruments such as PowerPoint. All the consolidation elaborations will be performed automatically by the system, saving time for focusing more on data analysis.


 benefits of an advantaged consolidation solution - CCH tagetik blog

Following is a more detailed list of the benefits to be gained from an advanced consolidation system:


  • Login checks/users management (loading, inquiry, reports segregation)
  • Unlimited users with simultaneous access
  • Automatic loading of data from other systems
  • Management of the entire consolidation process, from input to final approval
  • Automatic elaborations
  • Multidimensionality (time: Y-S-M, entity: company, divisions, orders, business area, data type: cons. N, cons. N-one, budget, forecast, etc.)
  • A web architecture (user just need a browser and Internet connection)
  • Management of multiple consolidations (critical for managing sub-consolidation, segment reporting, pro forma.
  • Conversion of foreign currencies with exchange rate management
  • Flexibility in setting consolidation method per entities for each area
  • Management of automatic adjustments and reopening of balance and adjustments
  • Cockpit evidencing IC relationships/amounts and differences in IC declarations
  • Elimination of typical facts (dividends, IC revenues and costs/interests income and expenses, profit in stock, Management of elimination ‘Equity/Investment’ and managing differences; calculation of groups’ and minorities’ equity and result)
  • Ability to drill-down and query data
  • Standard reporting and custom reporting

I strongly encourage finance executives grappling with some of the Excel-related challenges described here to explore the use of an advanced consolidation solution. Certainly, such a move is a critical transition and requires time and effort for set up, implementation, and training. However, the time spent on consolidation will be drastically reduced over the first year of use. And, just as importantly, data integrity will dramatically increase as will control over the entire consolidation process. 

Learn more about CCH Tagetik Solution for Consolidation watching a 3-min Demo

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