Creating a consolidated financial report is an important step in measuring the success of a multi-entity group, but it doesn’t paint the full picture. Going beyond traditional financial metrics to analyse non-financial KPIs will allow you to plan more holistically, and focus on a wider range of goals.
A consolidated report should also be flexible enough that it gives you both a group-wide overview, and a close inspection of the performance of individual entities, without much extra effort.
If your reports don’t show you these two things, it might be time to rethink your consolidation strategy. Luckily, getting started isn’t hard. Here are a few things you need to consider.
Consolidation in the Cloud
Let’s begin by talking about financial consolidation in the cloud. Before customising your report to fit your needs, it’s important to have a good understanding of your current financial position. Using cloud software is the simplest, easiest, and most accurate way to prepare a consolidated financial report—and you can do it in just a few clicks of your mouse.
Investing in the right software tools can save you the hours it would take to create a similar consolidated report in Excel. But software also greatly reduces the chances of human error. Most consolidation software will pull accurate numbers from your data collection systems, so you’ll be working with the most accurate and up-to-date data available without manually entering it yourself.
Finally, cloud consolidation means your colleagues and clients will be able to access your reports whenever and wherever they need to. As remote and hybrid working arrangements rise around the world, cloud software will become more and more necessary—something to consider for the near future.
Measure the Metrics that Matter
Once you’ve created a basic consolidated financial report, you can take it to the next level by adding important KPIs specific to your industry. These will often be non-financial metrics, but they’re just as essential as your financial data.
Make the most of these numbers in three simple steps:
Identify the right metrics to track by looking at the numbers that drive your company. If you’re a hotel chain, what’s your occupancy rate? What’s the average price of a room? When are your peak times? How do you measure customer satisfaction?
Decide which of these KPIs feed into your overall goals. For example if you want higher occupancy in your hotel and the main source of your bookings is traffic from your website, tracking website views is a good place to start. Once you have a baseline, you can see if increased website traffic translates into higher booking numbers—and if it doesn’t, why not?
Track progress by measuring the same data each month. Spotlight Reporting offers a range of charts and graphs that you can tweak to fit your requirements, and save as a custom template. Not all groups have the same needs, which is why creating a customised template for your consolidated reports will keep you on track.
As an added consideration, using a software app that creates engaging, digestible reports will serve you even better in the long run. Not everyone in your team will be able to parse a spreadsheet of numbers, but everyone can benefit from understanding your financial position. Make the information accessible, and your team will be more able to contribute to the company’s goals.
Measure Individually, Track the Group
A consolidated report—including financial and non-financial KPIs—will give you a good overview of the overall performance of your group. But the real magic happens when you look at what’s happening amongst individual entities, and how each entity is performing in comparison with the rest. Remember, your consolidated view is simply the average of each of your entities—to affect real change, you need to drill down.
It’s inevitable that some of your entities will be more successful than others across different metrics. Identifying your high performers is the first step towards helping your less successful branches improve. By sharing insights and strategies across the group, you can boost performance overall.
However, don’t forget to take into account the different context each of your entities operate in. What works well in one city might not work in another, and success might look different across the group. One hotel in a chain might bring in the most revenue, for example, while another is more popular on social media because of its unique architecture. Both will be valuable for the wider group, and should be treated accordingly.
To summarise: consolidated financial reports are useful, but for the best-possible business outcomes, you need to be measuring all the metrics that matter to your group. Spotlight Reporting offers a range of customisable consolidation tools that will allow you to track both financial and non-financial metrics at the individual and group level.