Requirements – Financial Consolidation (FC)

General requirements

• The system must have the facility to define at least 10 independent companies, each with their own general ledger (i.e. one for each division) for consolidation.
• It must be possible for information to be consolidated across the independent general ledgers for month-end reporting purposes.
• Each general ledger can, if required, use a different structure for the group chart of accounts.
• Each general ledger can be held in a different currency.
• There should be a facility to consolidate different ranges of accounts at varying exchange rates.

Accounting periods

• The system should facilitate the consolidation of general ledgers using different accounting periods.
• Users must be able to define their own period start and end dates in the consolidation module.

Data input

• All codes entered must be validated online, and the code description displayed for visual checking.
• It should be possible to reproduce the chart of accounts from any of the general ledgers in the consolidation module as a basis for consolidation.
• The system should provide the facility to list all valid codes and their descriptions at points when codes are required to be entered.

Budgets

• The system must allow for at least two sets of budgets to be held against each consolidation account:
• original budget,
• forecast,
• other.
• The system must allow the following year’s budget(s) to be set up without overwriting the current year’s budget(s).
• It must be possible to budget at a higher level than that at whic transactions are input, ie some accounts are only budgeted at income/expense code level, others at sub-account level.
• There should be facilities for phasing an annual budget over the various accounting periods on the basis:
• of equal monthly apportionment,
• a monthly profile (of which there may be more than one).
• It should be possible for budgets to be generated automatically from a previous year’s actuals or budgets, with a percentage increase or decrease per account code range.

Transaction input

• The system must support batch control on input, with agreement of batch controls before acceptance for posting.
• Batch numbers will be system generated.
• Batches should be limited to a single period.
• Batches should be written to a holding file and be available for recall and modification before posting.
• It should be possible for valid batches to be posted selectively by the user.
• The system should provide the facility for users to define their own transaction types, eg month-end allocation journals.
• It is anticipated that the following fields will be held in the batch header:
• transaction type,
• transaction reference,
• transaction date,
• accounting period (unless automatically derived from the date).
• It is anticipated that the following fields will be held for each line item:
• account code,
• description (min 30 characters),
• value,
• debit/credit.

Enquiry faclities

• The following will be available on entry of an account code per period:
• net movement,
• budget and variance,
• previous year and variance.

Reporting

• The following reports must be available:
• trial balance,
• profit and loss account,
• balance sheet,
• net movement by account showing opening balance at start of the month, net transactions and closing balance,
• other ad hoc reports, particularly in relation to transactions.
• It is anticipated that most reports will be produced by means of an end-user report writer. Such a report writer should be able to access all data items in the database to enable a wide range of custom reports to be written.
• The report writer must be able to use the following values:
• current month actual,
• current month budget,
• current month last year,
• year to date actual,
• year to date budget,
• year to date last year,
• variances between actual and any of the budgets/prior year.
• It should support the following features:
• sort routines,
• extraction by criteria,
• control level breaks,
• suppression of zero prints,
• ability to round reports to the nearest thousand,
• automatic formatting,
• on-line viewing,
• variable width,
• user defined columns,
• user defined rows,
• arithmetic calculations horizontally,
• arithmetic calculations vertically.
• It should support the ability to define a range of account codes, so that each each account and its description and other selected fields are automatically displayed.

Consolidation routine

• It should be possible to consolidate one, several or all companies on request.
• The facility for reading general ledger data from a disk should be available when producing the consolidation file to avoid unnecessarily using up disk space.
• A flag should indicate the status of the consolidation system, i.e. whether the consolidation has been run, aborted, completed, etc.