Consolidation of the financial data of companies can be a very complex process, especially if companies span national boundaries (the term company and organization here are synonyms).
Compiere makes most of the consolidation tasks surprisingly easy. Let's use a simple example: You have a production company and a distribution company. Compiere has a counter-document feature which automatically creates the document in the other company or organization. So, if you create a purchase order in the distribution company it creates a sales order in the production company. Our counter document feature is heavily used in the distribution industry between headquarter and (semi-) independent stores or outlets. With minimum overhead you can even completely automate the supply chain tasks within your organization.
This approach also uses explicit transfer prices - eliminating the need for inter-company profit elimination. You now can create individual or consolidated transaction and financial reports, just by selecting the specific organization or some grouping of organizations or companies.
Compiere maintains company or organization hierarchies for control and reporting purposes. As you can have multiple hierarchies in parallel, you can easily simulate the effects of company reorganizations on financial statements - before or after the event. If you change the organization you can change the hierarchy directly or if you build another hierarchy of the organization, you can then just switch your primary hierarchy, and could continue reporting using any other hierarchy.
In the simple example above, it is assumed, that the organizations share the same chart of accounts. Let's look at a bit more complex scenario: you have a company in the USA using some American chart of accounts (CoA) structure and using USD as the reporting currency - and a company in France using a French accounts and EUR as reporting currency.
You would set up the two companies in Compiere as usual and create two Accounting Schema - one using the US CoA and USD and another with the French CoA and EUR. This setting actually provides real-time consolidation - you can view the accounting of the French transactions using the US chart of accounts in USD immediately. No need to wait for the other organization to close their accounts and translate it to USD and convert to a different chart of accounts.
Compiere makes the maintenance of the individual account structures very easy via sophisticated defaulting. There are other scenarios that are not directly implemented in the current version of Compiere. One area is group/project/cooperation consolidation - we currently assume 100% ownership. Another area is consolidation of different tenants. You can maintain different and independent tenants in one Compiere system - enabling Application System Vendors (ASV) to offer Compiere hosting efficiently. Different tenants have complete data segregation.
Nevertheless, if you are interested in consolidating different tenants (or Compiere systems), send me an email. In summary, Compiere provides sophisticated consolidation functionality out-of-the-box and even allows real-time financial consolidation and reporting.
