Who can use this feature
Roles: Owner, Admin, Staff and optional on custom roles
Plans: Available on Standard, Plus, Advanced
Syft's consolidation feature allows you to consolidate complex corporate structures and other consolidations with ease and then visualize, analyze, forecast, and report.
This article is a step-by-step guide to help you create your a consolidation and answer any technical questions you have.
How to create a consolidation
You can consolidate financials from any accounting software, trial balance, transaction list, or ERP together (including Xero, QuickBooks Online, Sage Accounting, MYOB, Exact, FreshBooks, FreeAgent, Sage Intacct, and more).
⚒️ Multi-level consolidations
You can consolidate an unlimited number of entities as well as other consolidations to create large group structures.
To create a consolidation:
Click on "Add entity" at the top right of your screen
Select "Consolidation" and then complete the fields including the consolidation's name, country, reporting currency and financial year end.
💡 Pro tip
The reporting currency is the currency that your data will be displayed in. Syft supports exchange rates for over 170 currencies.
Once you've setup the basics, you need to select the entities to consolidate. You can update your selection at any point including adding new entities that have been acquired.
Set the consolidation method, either:
Proportional: The proportional method is a management accounting approach for consolidations whereby the financials of an entity are multiplied by a proportion (or percentage). The proportion won’t be applied to contact and product data.
Acquisition: The acquisition method allows for business combinations and acquisition accounting under IFRS and GAAP. Entities are fully combined and you can add journals in the consolidation to account for goodwill, fair value, and non-controlling interests.
Additionally, you can set acquisition or disposal dates for each entity in the consolidation. Syft will automatically handle the correct accounting treatment for the entity across both the P&L and balance sheet. If there are contacts with the same name from underlying entities within a consolidation, these contacts will be grouped together.
Understand the impact of acquisitions and disposals
Acquisitions
When a business is acquired during a financial year, the business is acquired along with the profit and loss that has accrued for that financial year, i.e. the Profit and Loss (This Year) account on the balance sheet.
This means that the Profit and Loss (This Year) account on the balance sheet will not reconcile with the P&L. On acquisition date:
The balance sheet will be added to the consolidation's balance sheet with the most recent balance for each account
The profit and loss will be added to the consolidation's profit and loss with the cumulative amount for each account from the financial year start date to the acquisition date
Disposals
After a disposal, the profit or loss earned during the period in which the entity was owned by the consolidation remains on the balance sheet under the Profit and Loss (This Year) account. The consolidation's profit & loss and balance sheet will clear all accounts that relate to the disposed entity to zero following the disposal date.
P&L and Balance Sheet layouts
Once you've selected the entities for a consolidation, the Profit & Loss and Balance Sheet layouts are merged. Syft will automatically create a group for each and every account across all consolidated entities, and then combine groups with the same name to improve the ease of use. You can ungroup, move and rename accounts at any point to configure the layout the way you like.
💡 Pro tip
Layouts created in a consolidation can be made available in the underlying entities once you click "Save."
Eliminations
Eliminations allow you to remove the impact of inter-group activity to show a correct and accurate view of the consolidation. Common uses of eliminations include removing the impact of inter-group loans and revenue (or expenses) between entities. To create eliminations, navigate to "Financial Close" > "Eliminations".
You can either eliminate accounts between entities or individual transactions.
🔭 Guidance
Best practice is to use account eliminations and eliminate a single account with another single account. This helps track the impact of the elimination and avoid errors.
In the "Eliminations" section, there are two sections - Overview and Review. Let’s take a look at what is contained within each section.
Overview
The Overview section provides a summary of your created Account and Transaction eliminations. You can access either by selecting the respective "Accounts" or "Transactions" button.
Each elimination displays its posting date and allows you to select its "Type" from options such as Other, Investments, Loans, Accounts, or Profit and Loss.
You can enable or disable an elimination using the toggle in the "Enable" column. To edit an elimination, click the pencil icon, which will direct you to the "Set up" page. The trash can icon allows you to delete an elimination.
If you click on the arrow button next to the name of the elimination, the elimination expands and you are able to see the entities between which the eliminations were created, the specific accounts used in the elimination for each entity and the categories of the accounts.
You can create an elimination in this page, by clicking on "Create Elimination".
Creating an elimination for the first time
If you have not created any eliminations, you will be prompted to create one by a "Create elimination" button. You will then need to configure a netting account for the elimination comprising:
The relevant entities
Name of the elimination
Name of the new accounting for netting
Netting account category
📓 Note
The account category and name of the netting account cannot be edited. They can be adjusted within layouts, but these changes are temporary and only apply to that layout.
You can then select accounts to eliminate. You can filter for accounts manually or by using a quick filter, such as Account names or Matching values. These are filters are automatically suggested by Syft where relevant.
Remember to click save!
From here, you'll be prompted to select the account type, COA classification, account, and to add a description. Once you're happy, click Save.
Account eliminations
💡 Pro tip
Account eliminations are continuous. Accounts will continue to offset one another until the elimination is deleted.
If you are creating an account elimination, you can choose between creating:
An elimination between only two entities: this option allows you to offset accounts in one entity against accounts in another entity (level of difficulty: easy)
An elimination between multiple entities: this option allows you to offset accounts between multiple entities (level of difficulty: moderate)
You will then need to configure the netting account for the elimination, naming both the elimination and the new account for netting, and selecting the relevant entities to eliminate.
You can view your accounts in either a Profit and Loss, Balance Sheet, or full Trial Balance View.
You can create an account elimination in one of two views: the Summary view or the Table view. Let's take a look at each of these.
Table view
This view gives you a list of all the accounts in the underlying entities within your consolidation.
Select from the drop down whether you want to create an account elimination in Profit and Loss, Balance Sheet or Trial Balance.
Select the various accounts you would like to eliminate by ticking the box next to the entity name (the number of accounts you have selected will appear above the "Entity" column) and click on the Save button to create the elimination.
Once you have saved your elimination, a banner will appear next to the elimination name to indicate how many accounts have been added to the elimination.
You are also able to manually filter in each of the table headings by clicking on the funnel icon.
Additionally, there are two quick filter buttons at the top right hand side of the table: "Inter-company accounts" and "Matching debits and credits" which when clicked prompt potential accounts to be eliminated based on certain criteria.
There is also a search bar next to the save button, where you are able to enter free text and search for what you require.
Summary view
In this view, you are able to select the entities between which you want to create the elimination in the "Entity" column.
In the "Account classification" column, you can select whether the elimination should be to Profit and Loss or Balance Sheet accounts.
You can select the category into which the elimination will fall in the "Category" column, depending on the "Account classification" you have selected.
You can then select the specific accounts you would like to eliminate in the "Account" column.
In the "Description" column, you can type free text to describe your elimination.
You can add further accounts to the elimination by clicking on the "Add Account" button.
Click on the "Save" button to create the elimination.
Once you have saved your elimination, a banner will appear next to the elimination name to indicate how many accounts have been added to the elimination.
You can also set a date range for your elimination by clicking on the calendar icon.
Why might you want to set a date range? Here are two reasons:
To account for possible acquisitions or disposals
When an account is used for any intercompany transactions has been discontinue
Other options
You can toggle on/off showing the account codes, which will populate the accounts in the "Account" column with the account codes.
You can also delete a row of the elimination by clicking on the trash can icon on the right hand side.
You can filter by accounts manually or by using a quick filter for account names or matching values. Remember to click “Save”.
📓 Note
Depending on whether you select the "Accounts" or "Transactions" buttons in Overview, this will impact whether you see the entity's list of accounts or the transaction list in the "Set up" page.
Once the name and category of the netting account is set, it cannot be changed. They can only be viewed in the "Review" page and managed directly in Layouts.
💡 Pro tip
Keep the number of accounts per elimination to a minimum. This will help you understand and track the impact of eliminations. If you need to offset several accounts, put these in different eliminations and then group the netting accounts with layouts.
Transaction eliminations
📓 Note
Account-level eliminations are available on all paid plans. However, transaction-level eliminations are only available on the Plus and Advanced plans.
When creating a new transaction elimination, select the "Transactions" button and you'll be prompted to:
Name the elimination: So you can manage the elimination later.
Name the new account for netting: This is where any net amount from the elimination will be posted.
Select the category for the netting account: This account can be either a P&L or Balance Sheet account (once selected, you can't change this so you'll have to recreate the elimination).
Click on "Add" and you will be directed to create the elimination.
In Transaction eliminations, you will be presented with a list of all the transactions grouped into accounts for the period selected for each of the entities in your consolidation.
Select the various transactions you want to include in your elimination by clicking the arrow next to the account and entity name and ticking the box next to the "Date" column (the number of transactions you have selected will appear in a banner next to the elimination name).
Toggle on or off the button to show selected transactions only, which, when toggled on, will only show those transactions you have ticked.
There is also a Search bar into which you can enter free text to search for specific transactions.
Click on the "Save" button to create the elimination.
Once you've created a transaction elimination, the transaction amounts within the elimination (debit or credit) will display their original total value and currency. This is to avoid confusion in the case that you've changed currencies or applied a proportion using the proportional consolidation method. Proportions and currencies will be applied to all your visualizations and reports once you navigate to them.
💡 Pro tip
In cases where a transaction-level elimination is contained in an account that is part of an account-level eliminations, the account-level elimination will override the transaction-level elimination.
Smart Suggestions
Our AI insights engine will suggest potential eliminations based on three key factors: values, account names, and entity names. Each suggestion includes a match score, indicating the likelihood of it being an accurate elimination. You can then either use these smart prompts to create an elimination or dismiss them if they’re not relevant.
📓 Note
The smart suggestions only work on Account eliminations.
You can always edit the elimination in the future.
How to make the most of smart suggestions
Here are some of the suggestions you might find:
Values: Syft compares account values to identify possible eliminations.
Similar values: Matches a debit and credit within a 10% variance.
Exact values: Matches a debit and credit of the same amount.
Entity Names: If an account name contains the name of another entity within the consolidation, Syft will match it to that entity’s account and flag it as a potential elimination.
Account Name: Syft also identifies specific keywords in account names. Accounts containing any of the following will be matched across entities with the same keywords:
Loan to / Loan from
Due to / Due from
Intercompany
Group
You can dismiss these eliminations if the suggestion is inaccurate, or create the elimination (and edit it in set-up).
General
In both Account (both views) and Transaction eliminations you are able to choose which elimination to view by clicking on the downwards arrow next to the elimination name and selecting the desired elimination. You are also able to rename the elimination by clicking on the pencil icon.
To add an elimination, click on the "+" icon. The "..." next allows you to delete the elimination.
Review
On this page, you are able to evaluate in detail both the Account and Transaction eliminations that you have created. Simply select the "Accounts" and "Transactions" buttons to review the respective eliminations.
You can also select the number of periods for which you would like to view the detail from a dropdown menu.
Clicking on the arrow to the left of the elimination name will expand the elimination to show the specific details.
When you click on the box arrow to the right of the elimination name, this enables you to edit the elimination and takes you back to the "Set up" page.
There is also a search bar in which you can enter free text.
When clicking on the "Show" button, under "Show Options" you can toggle on/off showing the elimination accounts.
Under "Column Layout" in "Show" you can tick showing the amounts as a single column or to show debit and credit columns.
Adding and removing entities from a consolidation
To add an entity to a consolidation, navigate to "Home". Click the three dots next to the consolidations name, click "Edit settings", then click "Consolidation settings". Click the dropdown and select the additional entities. Click "Save". The entities will be consolidated from the beginning of their transactional history (if you'd like to consolidate from a specific date, use an acquisition date).
To remove an entity, navigate to "Home". Click the three dots next to the consolidations name, click "Edit settings", then click "Consolidation settings". Click the dropdown and select the entities you wish to remove. Click "Save". The selected entities will be removed from the consolidation from the beginning of their transactional history (if you'd like to remove the entity from the consolidate from a specific date, use a disposal date).
Troubleshooting Removed Entities Still Showing
If removed entities still appear in the consolidation, follow these steps:
Go to the affected consolidation.
Navigate to the entity options menu.
Locate the list of entities currently included.
Identify the unwanted entity and click the 'x' icon next to it to remove it.
Confirm the changes and ensure the correct entities are included.
Check the synchronization with your accounting provider to ensure updates are properly reflected.
Regularly reviewing your entities can help prevent issues and maintain the accuracy of your consolidations.
⚔️ Disconnecting an entity before removing it
Disconnecting an entity will not remove the entity's data from a consolidation.
View the structure of a consolidation
To view the organization structure of a consolidation, navigate to "Home". Click the three dots next to the consolidations name, click "Edit settings", then click "Org structure". You can zoom in and out to view the structure of the consolidation.
My data seems incorrect
Consolidations are a technically complex accounting topic. There are a few things to review that could cause confusion, such as:
P&L and balance sheet layouts including the chart of accounts allocations
Acquisition and disposal dates for each entity in the consolidation
Account and transaction eliminations, especially if they eliminate across the P&L and balance sheet
Journals posted in Syft at different levels within the consolidation
FX Rates
📓 Note
Multi-currency consolidations are only available on the Plus and Advanced plans.
Navigate to "Options" > "FX Rates" to view the current end-of-period and average exchange rates used for your entities within a multi-currency consolidation and override them here if required. To change an exchange rate, click on it and edit.
The exchange rates displayed are month end rates, for example, if the current month is November then the rates used are October rates.
📓 Note
Creating a consolidation of a consolidation is only an option on the Advanced plan.