If you have subsidiaries in different countries, you already know what we're talking about: the headache of consolidating information when every company operates in its own currency, under its own accounting standards, with its own systems. At month-end, someone on your team spends entire days trying to put the full picture together. And when they finally do, it's already too late to act on what they found.

The real problem

It’s not just currency conversion. Without a consolidated reporting structure, you can’t see your business as a whole. You see pieces. And the decisions you make with pieces are usually worse than the ones you’d make with the full picture.

The three main challenges

1. Currency differences. A subsidiary may report profits in local currency, but when consolidating into your functional currency, those profits shrink or disappear. If you’re not monitoring FX exposure, you can be in for very unpleasant surprises.

2. Different accounting standards. A company in Colombia operates under IFRS. One in Mexico may have local variations. One in the US may be under US GAAP. Consolidating without standardizing is comparing apples to oranges.

3. Intercompany. Transactions between your own entities (loans, services, dividends) must be eliminated in consolidation. If it isn’t done well, you’re inflating your numbers without realizing it.

A real example

Emilia runs a group with many companies: one in US, one in Spain, one in Colombia, one in Peru and one in Panama. Every month-end her CFO consolidated in Excel, took a week, and the numbers changed three times before being “final”.

We implemented a standardized consolidation model with a defined functional currency, clear conversion rules and intercompany elimination, and a consolidated report that came out in two days.

The result: for the first time Emilia could see that her most profitable company in local currency was actually the least profitable of the group when consolidated in dollars.

What you need

  • A defined functional currency for consolidation.
  • Clear conversion policies (closing rate vs. average rate).
  • A consolidation model that eliminates intercompany automatically.
  • A monthly consolidated report that gives you the full picture.

At MOVA we have experience working with multi-country structures in Latin America. We help you build the consolidation system you need to make decisions with real visibility.