We finance people are quite smart and rather hard-working 😊. But sometimes, we overcomplicate things—especially when it comes to Group COA implementation.
The Group COA Trap
When aiming for automated reporting and consolidation, we usually start by preparing and implementing a unified Group COA across all legal entities - and then we overcomplicate 😊.
Where does this perception that COA has to be unified among all legal entities come from? Why do we think that all legal entities need the exact same COA? I've fallen into this trap myself. It's a challenging approach.
Each legal entity in the Group might need to add new accounts due to regulatory or tax changes or business growth. We end up adding more and more accounts to the unified Group COA until it contains nearly 1,000 accounts (I'm exaggerating, of course), becoming unmanageable, unstructured, and anything but user-friendly.
Preparation of the Group COA
Why not do the opposite? Instead of asking what all entities need, let’s start by identifying the accounts and level of detail truly needed for Group reporting and consolidation. This way, the Group COA would include only the relevant accounts, making it much shorter, easier to understand, well-organized, and more manageable.
For help with Group COA, check out our in-depth article: 'Designing a Powerful Group Chart of Accounts (Group COA) for Automated Consolidation' .
Implementing the Group COA
Once the new Group COA is ready, group entities can be asked to adjust their Local COAs to meet the Group COA requirements:
If requirements for an account in the Group COA are less detailed than in the Local COA, it is OK – multiple Local accounts can be mapped to one Group account (e.g., one account in the Group COA for VAT payable, but several accounts in the Local COA).
If requirements in the Group COA are more detailed than in the Local COA, entities need to add new accounts to their Local COAs and begin booking transactions in greater detail, starting from the specified date (e.g., separate accounts in the Group COA for electricity, heating, water supply expense, but in the Local COA all these in one account as utility expense).
There is another detailed article that might help you: 'Successful Implementation of a New Group Chart of Accounts (Group COA) Across the Group'.
Group COA Implementation with Emfino
We’ve summarized the Group COA implementation process with Emfino in one slide (below) to show how easily automated reporting and consolidation can be achieved for your Group or Investment Fund.
Yes, we know there’s a lot of text on the slide 😊, but we also know you 😊 – you like to print just one page, don’t you?
Next Steps
We encourage you to 📍 Request a Demo on our webpage by submitting this Contact form. We'd be happy to arrange a video call to show you an online demo of the system and discuss how it can meet your company's specific needs.
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