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.
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