Before you run a consolidation

Business needs vary in the area of consolidations. If you want to get a quick look at your financials, you can consolidate any time on the fly.

If, however, you want to establish a fairly accurate picture of your organization's financials, you'll want to complete your close process before consolidating for the period.

The close process is different for every company. However, it typically includes the following main steps:

1. Reconcile the bank accounts.

2. Record any necessary journal entries.

3. Determine revaluations.

4. Tie the balance between the subledgers and the general ledger.

5. Close the subledgers.

6. Close the General Ledger.

It's a best practice to complete these steps first, and any other steps your business determines are necessary, before running a consolidation for a given period.

Step 1: Reconcile bank accounts

Before you can reconcile an account with an import file or bank feed, set up rules and rule sets to define how to match incoming transactions.

Learn more about reconciling accounts.

Step 2: Record adjusting journal entries as needed

You'll find that sometimes adjusting journal entries can be necessary to record unrecognized income or expenses for the period. Alternatively, you can record adjusting journal entries to correct mistakes in the preceding accounting period.

You could record adjusting journal entries to the General Ledger after tying the balance between the subledgers and General Ledger. You could also record adjusting journal entries to the General Ledger to adjust for depreciation.

Your business needs may vary, and you could post adjusting journal entries for other use cases as needed.

Step 3: Determine revaluations

This may be a new step if your company has recently been enabled for multi-currency.

Accounts may be understated or overstated at the end of the period due to fluctuation in exchange rates. Revaluation reports calculate unrealized gains and losses associated with open transactions in a foreign currency.

You need to perform a revaluation when either:

  • You have an outstanding transaction (commonly in AR and AP) in a foreign currency.
  • Or, you have a bank account in a currency different from the base currency of the entity.
Post all revaluations in the operating entity before you run the consolidation.

Important notes about revaluation

Note the following about revaluation:

  • Inter-entity accounts do not require revaluation.
  • Revalue at the entity level before closing your ledgers.
  • Revaluation is a function of your accrual month end close, and not consolidation.

Main steps for revaluation

Revaluations involve the following main steps: 

  1. Run the revaluation report to see any outstanding transactions in foreign currency. The revaluation report produces the adjustment value in the base currency of the entity.
  2. Create the draft journal entry.
  3. Review and post the draft journal entry.

Journal entries for outstanding transactions (commonly AR and AP) are usually reversed on the first of the following month.

Learn more about revaluation reports:

Step 4: Tie the balance between the subledgers and General Ledger

The AR ledger holds invoices and payments that post to the General Ledger. When running the AR Ledger report, selecting the GL posting date within a specific period, the AR offset account in the General Ledger should match.

Similarly, the AP ledger holds bills and payments that post to the General Ledger. When running the AP Ledger report, selecting the GL posting date within a specific period, the AP offset account in the General Ledger should match.

Likewise, whatever is in Accounts Payable should match what's in Accounts Receivable.

If some journal entries do not match, you can adjusting journal entries to make them match.

Which reports are you running to ensure the balances match

Learn more about tying the balance between the subledgers and the General Ledger:

Step 5: Close the subledgers

Closing the books for a period also closes all the summaries and Cash Management periods. When you close the books for a period, Intacct closes all open transaction summaries and the Cash Management period.

Learn more:

Step 6: Close the General Ledger

Use the Close Books page to select the ending period for which you want to close the books. After books are closed, you cannot post transactions in any application for any date older than the end of the selected period.

In General Ledger, all open books are automatically closed when you close books for a subsequent period. For example, you have closed books for Q1, but not Q2. If you close the books for Q3, the books for Q2 are closed automatically.

Closing the books should be a regular part of your period-end process. It prevents users from posting transactions to the wrong period and ensures that you can finalize your financials.

Learn more about closing the General Ledger.