Almadar A group with one entity on SAP and another on a different system turns a routine monthly consolidation into a manual reconciliation every time.
Consolidation is often the slowest step in a month-end close for multi-entity groups in Riyadh. It is closely tied to the finance operating model, since how consolidation works depends on whether entities record transactions centrally or independently.
Why consolidation gets harder as groups grow
A Riyadh-headquartered company adds a branch and later a subsidiary, each set up with whatever system or chart of accounts suited it at the time. It ends up with entities that do not align for consolidation. Each new entity added without a deliberate chart of accounts standard increases the manual mapping work in every period.
What proper consolidation infrastructure requires
It requires a standardized chart of accounts mapping across all entities, however different their day-to-day operations, and a consistent intercompany elimination process that catches transactions before they double-count group revenue or expenses. It also requires clear ownership of consolidation itself, so it does not fall to whoever has time during a busy close.
Intercompany transactions as a risk area
Transactions between related parties, such as management fees, intercompany loans and goods transferred between a trading arm and a manufacturing subsidiary, must be eliminated in consolidation. They also need correct pricing for transfer pricing purposes. These are two separate requirements resting on the same transactions.
Making the transition without disrupting the current close
Standardizing the chart of accounts across entities that have operated independently takes careful sequencing, because switching everything mid-year risks a broken close during the transition. Phasing the change across closing cycles is safer than attempting it all at once.