Multi-Entity
The Consolidation Spreadsheet Has to Go
You know the one. Each entity's trial balance pasted into its own tab, an eliminations column somebody maintains by hand, and a total that ties because it was made to.
Why It Is Always a Spreadsheet
Because most accounting systems consolidate from summaries. You export a trial balance per entity, paste it in, and from that moment the group numbers are disconnected from the ledgers underneath them. A correction posted in one entity after you pasted does not propagate; it waits to be noticed.
The intercompany column is where it actually breaks. Two entities record the same transaction from opposite sides, the two records disagree by a rounding difference or a timing difference or a genuine error, and the elimination is a plug that makes the group statement balance without anyone establishing which side was wrong.
Consolidating From the Real Ledgers
Multi-entity consolidation rolls up each company's real books, with intercompany eliminations and access controlled company by company.
Consolidated statements are built from each entity's real ledger, with intercompany eliminations and the consolidating schedule that shows how the total was reached.
Intercompany balances are eliminated on both sides and reconciled between them, so a disagreement between two entities' records surfaces instead of netting itself away.
Each entity’s contribution is computed from its own posted journal entries, so a correction in one entity changes the group number the next time you look. Intercompany balances are matched between the two sides: when they agree within tolerance both eliminate, and when they disagree the disagreement is what you see rather than a plug.
Groups That Change Shape
Partial ownership, acquisitions mid-year and disposals are modelled with effective dates, so a group that changed shape during the year still consolidates correctly.
Group disclosure notes are generated alongside the statements rather than written separately and reconciled by hand afterwards.
An acquisition in May, a disposal in October, a subsidiary you own 70% of. Each carries an effective date, so the year consolidates as it actually happened rather than as it looks on 31 December. The disclosure notes come out of the same run.
What the Reviewer Sees
A consolidating schedule: entity columns, adjustment columns, eliminations, and the group total, with every figure opening into the entries behind it. It is the format an auditor asks for, and producing it is not a separate exercise from producing the statements.
What this does not do
It consolidates entities whose books are in this system. If one subsidiary’s ledger lives somewhere you are not moving it from, its numbers have to arrive somehow — and a manually imported trial balance is exactly the disconnected summary this page is arguing against. The honest answer today is to bring that entity’s books in, and if that is not possible, to know that its column is the one you are still checking by hand.
The fastest way to test this is with your own group structure in front of you.
What a consolidated period turns into is on reporting.