How to Create a Consolidated Company in Sage 50?
If a company owns one or more companies or is owned by another company, commonly known as a parent company, Generally Accepted Accounting Principles (GAAP) require that all financial records from the subsidiary companies be combined or “consolidated” into a single statement for reporting purposes, usually at the end of each financial year.Any number of subsidiary companies can be combined into a single consolidate company.
If you have Sage 50 accounting or higher, you can do the consolidation provided that all the companies be upgraded to the exact same year version that the parent company is updated to. Also, during the consolidation, it is important to map all the subsidiary companies under the parent company.
In this post, we are going to talk about the reasons you may need to create a consolidated company and the process of creating a consolidated company in Sage 50.
When do you Need to Consolidate Companies in Sage?
You may need to consolidate companies to:
- ensure that you generate accurate reports
- consolidate your companies at the end of the financial year
If your business requires you to generate reports more frequently, it is also possible to update the records on a monthly as well as a quarterly basis.
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What kind of Reports Can you Generate?
Here is a list of the various reports you can generate if you have your companies consolidated:
- Comparative Subsidiary reports such as Balance Sheet, Income Statement, Trial Balance and the Transactions By Account report provide financial details about the parent company and about each subsidiary company in relation to the consolidated parent company.
- The Transaction Details report provides financial details on all company transactions, or transactions for the parent company, a subsidiary company, or the consolidated parent.
- The Statement of Cash Flows report provides a consolidated view of cash inflows (where your money came from), and cash outflows (where your money went) over a certain period of time. The report is divided into operating, investing, and financing sections for easy analysis.
Steps to Create a Consolidated Company in Sage 50 for Reporting Purposes?
Creating a Consolidated Company in Sage 50 is quite simple as the Consolidation wizard takes you through a step-by-step process of in a few basic steps. When you run the wizard, it creates a chart of account for the consolidated parents which is based on the chart of accounts of the parent company. To make sure that the reporting is correct, the wizard assists you to match the subsidiary company accounts to the consolidated parent’s chart of accounts.
- First, open a subsidiary or parent company. If you use security, you would have to enter the password for the system’s Admin user.
Note: Users who are authorized to access the parent company are also allowed to access the consolidated parent company.
- From the Home window, go to File >Consolidate Company
- Now, press Next to launch the wizard and verify if the current company is the parent company or a subsidiary company
- Next, key in a consolidated company filename. The wizard will create a new data file (.csi) for the consolidated company. Press Next to carry on.
- Select Add to identify one or more subsidiary companies and hit Next to continue.
On the Related Accounts page, the Consolidate Company wizard automatically maps account numbers from the parent company to each subsidiary company (according to the conditions described above in the section “Before You Start”). If no check mark appears beside a company name in the Related Accounts column, one or more accounts need to be mapped.
- Choose the company and then select Relate to manually map accounts.
Note: To ensure accurate financial reporting, you should map all subsidiary accounts to a consolidated parent account; however, the Consolidate Company wizard lets you consolidate a company even if some accounts are not mapped. You will be reminded to map outstanding accounts when you try to generate a report.
- Choose to show all unmapped accounts. Beside each unmapped subsidiary account, click the Find button in the Consolidated Parent Accounts column to identify a parent account to map to.
- Press OK when you have matched all accounts.
- Repeat steps 6 through 8 for each subsidiary company that requires account mapping.
- Click Next and then finish the wizard. The Consolidate Company wizard retrieves opening balances and transactions for the current fiscal year from the subsidiary companies into the consolidated parent company.
It identifies opening balances and adds them to the consolidated parent company, and retrieves all transactions for the current year, up to the latest transaction date.
Create a consolidate company in Sage 50 is a considerably effortless process if you follow the instructions given above. However, if you end up facing a technical glitch or an error or are unable to complete the process due to any reasons, it is most recommended that you get in touch with our expert Sage professionals right away.
💠Frequently Asked Questions💠
Q1. How Can I Modify Account Mapping in a Consolidated Company?
Ans: After creating a consolidated company, you can update or make changes to account mapping. To Do so, follow these steps:
💠 Go to Home window of the Consolidated company and select Setup Menu > System Settings > Account Mapping
💠 Choose the subsidiary company
💠 Select to view only unmatched accounts
💠 Match subsidiary company accounts in the Consolidated Parent Accounts column.
💠 Select OK once the mapping is finished
Q2. How to Add or Delete a Subsidiary Company?
Ans: To add or delete subsidiary companies from the consolidated company, try this:
💠 Go to the Home window of the consolidated parent company and select File > Consolidated company
💠 Follow the consolidation wizard’s on-screen instructions to add or delete a subsidiary company. There must at least be one remaining subsidiary company
Q3. How Can I Update a Consolidated Company?
Ans: To update your consolidated company, follow the below-mentioned process:
💠 First, make sure that none of the other users have a consolidated parent or subsidiary company open on their system
💠 Next, open your consolidated parent company (.csi file) in single-user mode
💠 Now, from the Home Window, go to File > Consolidated Company
💠 Then, select the option to update the consolidated company and press Next
💠 After, select the first column to choose the companies with new transactions that you wish to update in the consolidated company. Alternatively, you can select a different file location and hit Next
💠 Finally, if you wish to save a copy of your data before consolidating, select Back Up (recommended). If not, press Next to continue
Note: If you come across a concern during consolidation, the wizard stops and allows you to print an error report. After rectifying the error, you can restart the consolidation wizard.
💠 Once the consolidation is done, press Finish.
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