# The Benefits of Consolidating Financial Data for Your Business
In today’s fast-paced business world, managing financial data can be a challenging task, especially if you have to access data from multiple sources. However, consolidating financial data in a single platform has become necessary for businesses of all sizes. Consolidation can save time, increase accuracy, and provide a clear picture of a company’s financial position. In this guide, we’ll explore the benefits of financial data consolidation and how it can help your business achieve greater success.
## 1. Better Budget and Cost Projections
Financial planning and analysis (FP&A) professionals often face difficulty completing their monthly closes, that are essential for budgeting and cost projection. Typically, they prefer to use old templates and add data from various parts of the business as needed. However, as the month draws to a close, all of these data have to be updated and verified. By consolidating financial data in a single platform, departments can input their data in their preferred format and automatically transform it into the FP&A team’s chosen format with ease.
Consolidating data in a single platform allows finance teams to provide the CFO with better cost projections that feed into working capital calculations. An automated system that pulls in numbers from departments in real-time makes life even easier for finance teams. By breaking down operating expenses in real-time, business owners can have greater confidence in their numbers and create accurate projections.
## 2. Consistent Reporting
Excel is still the software of choice in many businesses and with good reason. It’s versatile and highly customizable. Also, every professional in the industry has been trained on it. However, consolidating data in an Excel sheet is tough, especially for larger organizations. The best platform solutions augment Excel workflows instead of trying to replace them.
Integrated solutions with Excel allow finance teams to pull data automatically into their spreadsheets and have them organized for analysis. Teams can then export these data to ready-made report templates that change dynamically thanks to real-time data feeds. The result is a consistent report format that eliminates manual work and eliminates errors. CFOs and business owners can easily view the financial impact of their decisions. Ad-hoc reporting is easy as well, thanks to integration which results in advanced filtering functions appearing within Excel. Teams can slice and dice data easily to present better insights during meetings and presentations.
## 3. Better Investment Decisions
Manual reporting processes increase the amount of clerical work finance teams carry out and gathering data from varied sources only increases this work. Consolidating data into a single platform eliminates the need for manual processes and frees up teams to execute value-add processes such as identifying key drivers in a business. Capital allocation is one of the most critical tasks in a business.
Teams can paint a more accurate picture of a business’ strengths and weaknesses by diving into cost of goods sold (COGS), capital expenditures (CapEx), operating expenditures (OpEx), and other financial data. Owners, armed with this knowledge, can make better capital allocation decisions and model different scenario outcomes. For instance, owners can model the outcome of buying a smaller competitor versus projecting revenues by building a business unit internally. Consolidated data can help decision makers analyze the effect of demand swings on department budgets and second-order consequences.
## 4. A Single Point of Truth
Maintaining data integrity is close to impossible when everything is decentralized. When disparate data sources exist, finance team members cannot run accurate projections or have confidence in their numbers, because they’re never sure how true their assumptions are. While creating a shared Excel file allows multiple users to share their data on a single page, it complicates data integrity. Excel cannot create a cell-level audit trail that can identify sources of error, nor can it automatically validate data and check it for consistency.
Consolidating financial data into a single platform with an automated validation system will have minimal workflow impact and will bring the power of technology to eliminate manual validation processes. This results in a fully validated source of data that has high integrity. Teams can build projections using this base and execute their tasks better.
## 5. Easier Access to Insight
Analytics platforms are everywhere, but they’re only as good as the data they’re fed. Businesses that have powerful analytics engines backed by manual data validation processes are not extracting the most benefit from their software. An analytics package can’t shed insight into a company’s financials without receiving a full picture.
By bringing all of their data into a single place, running analytics and dashboarding data is simpler. Armed with insight, businesses can make better decisions.
Consolidating financial data requires a change in mindset, but it’s well worth the investment. The benefits outweigh the friction, and companies can improve the quality of their decisions significantly. Consolidating data can save time, increase accuracy, provide a clear picture of your company’s financial position, and make it easier for your team to generate reports and perform analysis. By utilizing a single platform, businesses can streamline their financial processes and gain greater insight into their operations.