Read this page in Bahasa Indonesia: Laporan Manajemen dan Konsolidasi Grup dengan Xero
When a business grows into several companies, such as an operating company, an asset-holding company and new branches or subsidiaries, the owner needs one financial picture of the whole group. Xero records each company as a separate organisation. Group reports are built by combining those organisations, eliminating intercompany transactions and presenting the result as one management reporting pack.
How consolidation works with Xero
Xero has no built-in consolidation inside a single organisation. Consolidation is done with a reporting tool that connects to several Xero organisations at once, such as Syft Analytics (now part of Xero), and combines them according to the group structure. For the result to be reliable, a few things need to be in place:
- A consistent chart of accounts. Every company uses the same account structure, or is mapped to one group structure.
- Clean intercompany records. Intercompany receivables and payables, internal sales and recharged costs use dedicated accounts so they can be eliminated.
- A timely month-end close. Each company closes on the same schedule, with bank accounts reconciled.
- Consistent exchange rates. Companies in other currencies are translated at set, documented rates.
What a group management pack contains
- Consolidated and company-level profit and loss, compared with last month and budget.
- A consolidated balance sheet after intercompany balances are eliminated.
- Cash flow and the cash position of the whole group.
- Key indicators such as gross margin, days sales outstanding and inventory turnover.
- Short notes explaining the important changes in the month.
How Logiframe helps
Our team sets up the group structure in Xero: a consistent chart of accounts, intercompany accounts, tracking categories and the connection to the reporting tool. After that, each month we reconcile intercompany balances, eliminate them and deliver a consistent group reporting pack. For the initial setup, see Xero implementation. For each company's monthly bookkeeping, see accounting outsourcing. For dashboards and consolidation, see Syft Analytics in Xero, and for annual financial statements, see Xero statutory reporting.
Frequently asked questions
Can Xero consolidate financial statements?
Xero records each company as a separate organisation. Consolidation is done with a reporting tool that connects to several Xero organisations, such as Syft Analytics, which is now part of Xero.
What is an intercompany elimination?
Removing balances and transactions between companies in the same group, such as internal sales or intercompany loans, so the consolidated report shows only dealings with outside parties.