What is accounting consolidation software?

Consolidation means combining the income statements and balance sheets of multiple entities while eliminating transactions between them (intercompany eliminations). If Entity A sold $50,000 of services to Entity B, that revenue and expense cancel out at the group level. Doing this manually in spreadsheets is error-prone and time-consuming.

Currency translation is another consolidation complexity. If a subsidiary operates in euros and the parent reports in dollars, every balance sheet item must be translated at the closing exchange rate and every income statement item at the average rate for the period. Translation differences are recorded in a separate equity reserve. Software handles these calculations automatically; doing them by hand across multiple entities and periods is a significant source of errors.

Sage Intacct, NetSuite, and Workiva are strong consolidation tools for mid-market businesses. Note.now currently handles single-entity accounting excellently and is working toward multi-entity support for growing businesses managing more than one company.

For businesses with two or three entities that do not have complex intercompany transactions, it is possible to consolidate manually using Note.now exports into a spreadsheet. This is time-consuming but manageable at small scale. Once you have four or more entities, significant intercompany activity, or multiple currencies, dedicated consolidation software becomes the more practical solution.