Table of Contents
- 1 Perform the Following Procedures Before Forming a Consolidated Business:
- 2 How Frequently Should I Consolidate?
- 3 FAQ’s
When one business owns one or more other companies (a parent company), generally accepted accounting standards (GAAP) require that all financial records (from subsidiary companies) be combined or “consolidated” into a single statement for reporting purposes, often at the conclusion of each fiscal year. This allows the records of all the companies under the parent company to be under one name.
Any number of subsidiary firms can be merged into a single consolidated parent company. The subsidiaries can be Sage 50 Pro Accounting or above, but they must all be updated to the same year version as the main business. During consolidation, all of the subsidiary firms’ accounts must be mapped to the main company’s.
In a few easy steps, the Consolidation wizard guides you through the process of forming a consolidated business. When you execute the wizard, a chart of accounts for the consolidated parent is generated, which is based on the chart of accounts for the parent business. The Consolidate Business wizard assists you in matching subsidiary company accounts to the consolidated parent’s chart of accounts to guarantee proper reporting. This will help you in creating a subsidiary company in Sage 50.
Perform the Following Procedures Before Forming a Consolidated Business:
- Check to see if all of the firms to be merged have updated to the same version of Sage 50 Accounting.
- Determine the parent firm.
- Determine whether or whether you have one or more subsidiary firms.
- Ascertain that each firm has a distinct company name and file name and that each company runs in the same fiscal year.
- It should be noted that the regulation for the same fiscal year would also apply to any firm with transactions in the prior, current, and next fiscal years. (Premium Accounting in Sage 50)
- Ascertain that the parent company is set to single-user mode and that the subsidiary firms are closed.
- Prepare the accounts for account mapping by doing the following:
- The finances of each subsidiary firm should be link to the accounts of the parent business. If any account numbers vary, the Consolidation wizard automatically translates accounts based on the following criteria:
- If the subsidiary company’s asset account numbers have fewer digits than the consolidated parent’s, Sage 50 Accounting inserts zeroes to the conclusion of each subsidiary company’s asset accounts.
- For instance, if the parent asset account is 168000, the subsidiary asset account 1680 is also 168000.
- If the subsidiary company’s asset account numbers have more digits than the aggregated parent’s, Sage 50 Accounting aborts each subsidiary asset account number to meet the duration of the consolidated parent’s asset account.
- For instance, if the parent asset account is 1680, then the subsidiary asset account 1680911 is also 1680.
- If a subsidiary company account cannot be match, bank details must be manually map which you can do quickly and easily while running the Consolidate Company wizard.
To Establish a Consolidated Firm:
- Establish a subsidiary or parent company.
- Enter the password for the sysadmin user if you are using security.
- Click Consolidate Company from the File menu in the Home window.
- To begin the wizard, click Next.
- Determine whether the present firm is the parent or a subsidiary.
- Enter the filename of the consolidated company.
- For the combined company, the wizard will generate a new data file (.csi).
- To proceed with adding more subsidiary businesses, click Next.
- Click Add to add one or more subsidiary businesses,
- After adding the subsidiary business, click Next to proceed.
- Select to display all unmapped accounts.
- Click the Find button in the Consolidated Parent Accounts column next to each unmapped subsidiary account to find a parent account to map to.
- When you’ve matched all of the accounts, click OK to finalise it.
- Steps 6 through 12 must be repeat for each sister business that requires account mapping.
- Click Next to proceed with the wizard.
The Consolidated Company wizard imports the current fiscal year’s opening balances and transactions from the subsidiary firms into the consolidated parent company.
It finds opening balances and adds them to the consolidated parent business, as well as obtains all transactions for the current year up to the most recent transaction date.
How Frequently Should I Consolidate?
As part of your year-end operations, you should update your consolidated company. If you wish to keep your records more up-to-date, you may update your consolidated business more frequently.
Refresh a Consolidated Company
You may generate consolidated company reports if you have formed a consolidated company to monitor and compare business performance for one or more firms. Update your consolidated business on a regular basis to ensure that your reporting results are up to date, or when you wish to start a new year. This report is accessible exclusively for Sage 50 Premium Accounting and above.
- To update your consolidated company, make sure no other users are working on a combined parent or subsidiary company.
- In single-user mode, open your consolidated parent company (.csi file).
- Choose Consolidated Company from the File menu in the Home window to launch the Consolidation wizard.
- Select the option to update this consolidated company, then press the Next button.
- Select the firms with new transactions that you wish to be update in the consolidated company by clicking in the first column. If necessary, select an alternative file location and then click Next.
- Click Back Up (recommended) to preserve a copy of your data before combining, or Next to proceed without backing up.
If you still face any issues in understanding how to create a consolidated company after reading the above steps, or if you are facing any glitch, you can contact our team and we will be there to help you.
What Types of Reports Can I Create?
Financial information regarding the parent business and each subsidiary firm in respect to the consolidated parent. Company are provided in the Comparative Subsidiary reports (Balance Sheet, Income Statement, Trial Balance) and the Transactions By Account report. The Transaction Details report contains financial information on all corporate transactions. As well as transactions for the parent company, a subsidiary firm, or the consolidated parent.
The Statement of Cash Flows report summarises cash inflows (where your money came from) and cash outflows (where your money went) during a specified time period.
How Do I Change the Account Mapping in a Consolidated Company?
To change the account mapping:
- Select the Setup menu.
- Then go to System Settings
- In settings, go to the Account Mapping from the Home window of your consolidated parent business.
- Choose a subsidiary company.
- Select only mismatched accounts to display.
- Accounts for subsidiary companies should be match in the Consolidated Parent Accounts column.
- When the mapping is finish, click OK.
How can you Add or Remove a Subsidiary Company?
After consolidating a company, you can add or remove subsidiaries from the consolidated firm, as well as update or modify account mapping.
- To add or remove a subsidiary company follows the steps below:
- Go to the consolidated parent business’s Home window.
- In the window, select the File menu,
- In the file menu, go to Consolidated Company.
- To create or eliminate subsidiary businesses, use the Consolidation wizard.
- At least one subsidiary firm must still exist when you exit the window.