When managing multiple entities, companies must choose between centralised and decentralised financial consolidation. Each approach has pros and cons—let’s explore them.

Centralised Consolidation

In this approach, the parent company controls and consolidates all financial data.

✅ Advantages:

• Ensures standardised reporting
• Reduces errors and inconsistencies
• Provides a clear financial overview

❌ Challenges:

• May require significant resources at the headquarters
• Less flexibility for subsidiaries

Decentralised Consolidation

Subsidiaries handle their own financial data, and reports are later combined at the group level.

✅ Advantages:

• More flexibility for subsidiaries
• Faster financial reporting for local entities

❌ Challenges:

• Potential inconsistencies across entities
• More difficult to ensure compliance with accounting standards

Which One Should You Choose?

• Choose centralised if you prioritise standardisation and control.
• Choose decentralised if your subsidiaries operate independently with different financial structures.

A hybrid approach—where automation ensures consistency while allowing subsidiaries some flexibility—can be an ideal solution.