Situation and challenge
Companies in international corporate groups often have to combine local accounting obligations with reporting requirements set by headquarters. This means maintaining books under the Polish Accounting Act while preparing financial data in the format expected by the group, often under IAS/IFRS or internal group accounting policies.
In practice, group reporting can be challenging. Financial data comes from different systems, some information must be converted from local accounting rules to the group's standards, and headquarters expects the consolidation package in a specified format and on time.
A company belonging to an international corporate group approached TOP Outsourcing. It was struggling to prepare financial reports for headquarters because data was scattered, there was no consistent verification process, and the existing reporting method relied on manually combining information from several sources.
TOP Outsourcing's task was to organise the group reporting process, prepare a consistent consolidation package and support the company in delivering data to headquarters in the required format and within the agreed timetable.
The problem: scattered data and no consistent group reporting process
The client operated in an environment typical of international corporate groups. Local accounting followed Polish regulations, while headquarters expected data in a different structure, often more detailed and tailored to consolidation needs.
The main problems included:
1. Scattered financial data
The data needed for group reporting was held in different places: the finance and accounting system, spreadsheets, sales schedules, operational reports and files prepared by different people across the organisation.
The absence of a single, organised data source created a risk of inconsistencies between the accounting records, management reports and the package sent to headquarters.
2. Difficulties preparing the consolidation package
Group headquarters required reporting in a specific format. The consolidation package included financial data, balance reconciliations, intercompany transaction information, selected notes and additional supporting schedules.
However, the company had no established procedure for preparing the package. Each reporting period required substantial manual work, increasing the risk of errors and delays.
3. Differences between local accounting and group requirements
One challenge was adapting accounting data to group requirements. Data prepared under the Polish Accounting Act did not always match the structure, definitions and presentation rules expected by headquarters.
Differences had to be identified, appropriate reporting adjustments prepared and consistency ensured between the local books and IAS/IFRS reporting.
4. Risk of reporting errors and delays
Manual data processing, a lack of clearly documented controls and deadline pressure created a high risk of mistakes. Even minor errors in the consolidation package could lead to further questions from headquarters, resubmissions or delays to the entire group consolidation process.
5. Insufficient management board control over the process
The local management board needed assurance that data sent to the group was complete, consistent and explainable. The existing process lacked sufficient transparency because many elements of the report were prepared manually without standardised control documentation.
What TOP Outsourcing did
The solution: organising group reporting and preparing the consolidation package
TOP Outsourcing introduced a structured process for preparing group reporting data. The objective was to produce a consistent financial package that met headquarters' requirements, could be verified by the local management board and was ready on time.
Step 1: Analysing group requirements and data sources
The first stage was to analyse headquarters' reporting requirements. We checked which data the consolidation package needed to contain, the format required and the deadlines applicable to the local company.
Among other things, we analysed:
- the consolidation package format
- mapping of local accounts to group reporting lines
- the required notes and supporting schedules
- intercompany transaction requirements
- IAS/IFRS reporting principles
- differences between local accounting policies and group policies
- the data sources used for reporting.
This enabled us to identify areas needing organisation, automation or additional checks.
Step 2: Standardising financial data
We then began standardising the financial data. The aim was to create a consistent dataset for use in group reporting.
As part of the work, we:
- verified data from the accounting records
- checked balances against supporting reports
- organised data from different sources
- identified gaps and inconsistencies
- prepared mappings from local items to the group format
- corrected discrepancies requiring clarification.
Standardising the data reduced manual work and the risk of errors in subsequent reporting periods.
Step 3: Preparing the consolidation package
Once the data had been organised, we prepared a consolidation package that met group headquarters' requirements.
The package included:
- financial data in the required structure
- mapping of local data to group reporting lines
- supporting schedules
- information on intercompany transactions
- reconciliations of intercompany balances
- data needed for consolidation eliminations
- reporting adjustments arising from differences between local accounting policies and group standards
- commentary on selected reporting items.
The data was prepared in the format required by headquarters so that it could be used in the group consolidation process.
Step 4: Verifying compliance with IAS/IFRS and group requirements
At the next stage, we checked the data against group reporting requirements and the accounting standards applied.
Depending on the client's and headquarters' requirements, the analysis included:
- identifying differences between the Polish Accounting Act and IAS/IFRS
- reviewing the presentation of selected balance sheet and income statement items
- checking revenue and expense recognition policies
- analysing selected reporting adjustments
- verifying related-party transaction data
- checking the package's consistency with the local books.
As a result, the local management board received a package that was complete and whose figures could be substantiated and explained to headquarters.
Step 5: Supporting communication with group headquarters
After preparing the reports, TOP Outsourcing supported the client in submitting data to headquarters and answering follow-up questions.
The support included:
- explaining selected reporting items
- preparing additional schedules
- substantiating reporting adjustments
- verifying data following headquarters' comments
- updating the package in response to additional requirements
- organising communication for subsequent periods.
This helped the company complete reporting efficiently and reduce uncertainty on the group's side.
Step 6: Establishing a process for the future
The final stage was to make group reporting more repeatable. The objective was to reduce manual work and the risk of errors in subsequent periods.
We introduced:
- a timetable for preparing the consolidation package
- a list of data sources
- mapping of local accounts to group reporting lines
- a checklist to complete before submitting the report
- arrangements for reconciling intercompany transactions
- a procedure for investigating differences
- a structure for working files and supporting documentation.
The company gained a process that could be repeated in subsequent months, quarters or years.
Results and summary
Results: consistent group reporting and greater control over data
By working with TOP Outsourcing, the client regained control of group reporting.
A complete consolidation package for headquarters
Group headquarters received financial data in the required format, on schedule and in line with group reporting requirements.
A lower risk of reporting errors
Data standardisation, account mapping and quality checks reduced the risk of mistakes arising from manual data processing.
Better cooperation with headquarters
The company could answer headquarters' questions faster, explain differences and provide additional schedules without organisational disruption.
Transparency for the local management board
The local management board gained greater control over reporting. Before submission, the data was organised, checked and capable of being explained.
A repeatable group reporting process
At the end of the project, the company had a structured model for preparing its consolidation package that could be used in subsequent reporting periods.
Summary
This case study shows that group reporting and consolidation package preparation can be organised effectively even when financial data is scattered and headquarters' requirements are complex.
By working with TOP Outsourcing, the client benefited from:
- a structured group reporting process
- preparation of the consolidation package
- mapping of local data to the group format
- support with IAS/IFRS reporting
- reconciliation of intercompany transactions
- data needed for consolidation eliminations
- support in communicating with headquarters
- greater management board control over data quality.
TOP Outsourcing supports companies and subsidiaries of international groups with group reporting, consolidation packages, financial data mapping, intercompany reconciliations and reporting under IAS/IFRS and group requirements.
