How to prepare group consolidated accounts

Has your group expanded over time—through acquisition or organic growth—resulting in multiple entities to manage? If so, preparing consolidated accounts might still mean late nights with cumbersome spreadsheets and repeated manual tasks. You’re not alone.

For many group finance teams, preparing group consolidated accounts remains one of the most time-consuming and frustrating processes. And in today’s world of flexible and hybrid working, teams are increasingly asking:

• How can we streamline group consolidation?
  
  
• Can we collaborate more effectively across locations?
  
  
• Is there a better alternative to shared spreadsheets that crash or go out of sync?
  
  

This article answers these key questions and outlines how finance leaders can simplify group consolidation and drive efficiency through modern tools.

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What are group consolidated accounts?

Group consolidation refers to the process of combining the financial statements of multiple entities within a corporate group so they can be reported as one unified organisation.

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Which organisations need to prepare consolidated accounts?

Under UK company law and international accounting standards, consolidated financial statements are mandatory for parent companies with one or more subsidiaries—unless the group qualifies for exemption, such as being classified as ‘small’.

If you’re unsure whether your group structure requires consolidated accounts, it’s advisable to consult with a professional accountant.

That said, compliance is only part of the story. Regularly preparing consolidated accounts enables finance teams to provide management and stakeholders with accurate, timely insights—supporting more informed strategic decisions.

What does group accounts consolidation mean?

For finance teams managing subsidiaries, consolidation is often a monthly burden. From partial ownership arrangements to multi-currency transactions, the variables are complex. If you’re still relying on Excel, you’re likely dealing with a process that’s stressful, inefficient, and error-prone.

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What are the common issues with consolidating group accounts?

Manually preparing group consolidated accounts often leads to three main challenges:

1. Time-consuming and inefficient: Excel-based consolidation often involves complex formulas, which are difficult to audit and prone to human error.
   
   
2. Delays in delivering critical data: It’s hard to get accurate group-level information to the board or investors quickly.
   
   
3. Limited collaboration: Teams working across entities or locations struggle to collaborate efficiently in shared spreadsheets.
   
   

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A step-by-step guide to group consolidation

Forward-thinking finance teams are turning to cloud-based accounting platforms to simplify and automate group consolidation. Here’s a roadmap to help modernise your process:

1. Automate consolidation of multiple subsidiaries (including sub-groups)

Automation eliminates the need for repetitive data gathering and enables real-time consolidation across any number of entities—including nested sub-groups. With the right platform, consolidating complex structures becomes faster and more accurate.

2. Record intercompany loans

When a parent company pools cash across entities for investment purposes, intercompany loan balances and interest allocations need to be correctly recorded. This ensures transparency and accurate reporting across the group.

3. Enable foreign currency consolidations

Group entities often operate in different base currencies. Effective consolidation software automatically translates financials into the group’s base currency using the correct exchange rates (e.g., period-end for balance sheets, average for income statements).

AccountsIQ’s Central Currency Management feature makes this effortless by maintaining exchange rates in one central location and applying them consistently across subsidiaries.

4. Charge payables and payroll expenses

Group-level accounts payable and payroll costs must be correctly allocated to relevant entities. With automation, this can be done in just a few clicks, removing manual calculations and potential inconsistencies.

5. Ensure group-level management reporting

Accurate, timely reporting—both at entity and group level—is essential for strategic decision-making. Comparing actuals vs budgets across the group helps finance leaders shape forward-looking strategies.

6. Post intercompany charges

Intercompany invoicing is often a reconciliation headache. AccountsIQ simplifies this by automating intercompany charges—creating mirrored invoices between entities and ensuring they're balanced and auditable.

7. Manage currency revaluations

At month-end, all foreign currency bank and ledger accounts must be revalued. AccountsIQ automates unrealised gains/losses postings using centrally maintained exchange rates—ensuring clean group-level eliminations.

8. Manage complex ownership arrangements

Some group structures include partial ownership of entities. AccountsIQ automatically handles minority interests and generates the appropriate consolidation entries, reducing manual intervention.

9. Post consolidation adjustments

You need the ability to post journals at group level without altering underlying subsidiary accounts. This provides more precise control over group-wide reporting.

10. Close books

To maintain data integrity, close both subsidiary and parent ledgers at period-end. This flags that the accounts have been consolidated and prevents any retrospective changes.

11. Review and issue financial statements

Thoroughly review consolidated outputs before distribution. With full visibility into every level of your group structure, you can investigate anomalies and issue accurate financials with confidence.

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Things to consider during group accounts consolidation

More finance teams are choosing to move away from spreadsheet-based processes to reduce risk and improve efficiency. When evaluating your options, consider:

• Add-on tools: These can patch gaps but often involve additional complexity and cost.
  
  
• Integrated platforms: Solutions like AccountsIQ deliver seamless group consolidation and real-time reporting from a single platform.
  
  

“AccountsIQ’s main success for us has been the efficiency it has brought to the business. The product is a good fit for our pretty complex accounting requirements and gives us real value for money. We can consolidate 80 entities in a few minutes.”
— Finance Director, Salamanca Group

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What business intelligence does your group need?

Timely, accurate data is key for modern finance teams—not just for compliance, but to support strategic planning and performance management. Instead of waiting until all reconciliation is complete, you need instant access to insights.

AccountsIQ tackles this with a unique group reporting model: subsidiary-level ledger codes are mapped to group-level summary codes, enabling consolidated insights with full drill-down capability. This allows for multi-dimensional analysis by location, department, or product—on demand.

You also gain access to a library of over 250 pre-built reports and dynamic dashboards tailored by role.

With this level of insight, you can consolidate and report as frequently as needed—not just at month-end—empowering your team to deliver real-time financial intelligence.

How future-proof is your group’s finance system?

As your organisation evolves, your finance system must adapt. Whether onboarding new entities, integrating with your CRM or using Open Banking for real-time cashflow visibility, ensure your chosen platform is scalable and API-enabled.

What’s the best group consolidating system for your finance team?

A successful implementation depends on having the right technology—and the right support. Change projects are smoother when you choose a software partner that’s collaborative and responsive.

Once in place, the benefits are transformative: fewer manual processes, better data, and a motivated finance team focused on value-added work.

When it comes to consolidating complex group accounts, we’ve yet to meet a finance team that misses Excel.

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Explore how AccountsIQ can transform your group consolidation process.
Download our Multi-Entity Consolidation Checklist and discover how our platform supports complex group structures with ease.

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