Consolidation Group Structure

Facing a common challenge in Group Reporting when dealing with complex ownership structures. Approach of a single, flat consolidation group can make it difficult to analyze results at different sub-group levels.

Here's a better approach to set up your consolidation groups in SAP Group Reporting to reflect your ownership hierarchy and enable sub-group reporting:

1. Mirror Your Ownership Structure:

• Create Consolidation Units: Create a consolidation unit for each company (A, B, C, E, F, G, H, I, J).
• Create Consolidation Groups: Create consolidation groups that mirror your ownership hierarchy:
  • Group A: Includes A, B, and C.
  • Group C: Includes E, F, and G.
  • Group F: Includes H, I, and J.

2. Utilize Consolidation Unit Groups:

• Assign Consolidation Units: Assign the relevant consolidation units to each consolidation group. For example, assign units A, B, and C to "Group A".
• Establish Parent-Child Relationships: In the "Group Structure" app, define the parent-child relationships between your consolidation groups. This establishes the hierarchy: Group A is the parent of Group C, and Group C is the parent of Group F.

3. Leverage "Step Consolidation"

• Consolidate Sub-Groups First: This process consolidates the results of the lower-level groups (Group F, then Group C) before consolidating the top-level group (Group A).
• Enable Sub-Group Reporting: By consolidating in steps, you retain the individual results of each sub-group, allowing you to report and analyze them separately.

4. Reporting and Analysis:

• Group Reporting provides tools to generate reports at different levels: You can create reports for the entire group (Group A), as well as for individual sub-groups (Group C, Group F).
• Utilize the "Group Filter" in reports: This allows you to isolate specific groups or units for analysis.
• Standard Reports: Explore standard reports like "Balance Sheet and P&L by Group" or "Consolidation Journal."

Why this structure is better:

• Reflects Ownership: Accurately represents the ownership structure and relationships between companies.
• Enables Sub-Group Analysis: Allows you to analyze the performance of individual sub-groups, providing more granular insights.
• Flexible Reporting: Facilitates reporting at different levels of the organization, from the top-level group down to individual units.
• Improved Decision-Making: Provides a clearer picture of the financial health and contribution of each part of the business.

By implementing this hierarchical structure in Group Reporting, you'll gain a more accurate and insightful view of your consolidated financials, enabling better decision-making and analysis.