Financial reporting becomes efficient when every figure comes from one system. Before you build the first report, settle the chart of accounts, the dimensions you post against and the definition of each key figure. You then close the month in your enterprise resource planning (ERP) system, not in Excel. From a report, you zoom in on the detail.
Why do your financial reports contradict each other?
Because the figures come from different systems, each structured in its own way. Many companies run a separate system per process or department, such as HR and sales, and these are not linked. Departments extract their data by hand and deliver it in their own ‘language’. You then have to merge it all yourself.
That is how you end up comparing apples with oranges. The data structures and the content of data points in different systems have to match, or analysis becomes difficult. Revenue by invoice date and revenue by delivery date are both correct, and still different.
When a department misses its target, you want to know whether staffing or something else is the cause. Without reliable figures, that remains a guess.
Silvester Jansen, ERP Finance Consultant at Eqeep, once worked with an outdated information system. In 2024 he wrote about it.
“You couldn’t even get decent reports out of it, and you couldn’t link it to external tools either. You had to transfer everything manually to Excel, to which you then ran a macro to do the analysis. I know, still many people love Excel, but it is also very error-prone. Before you know it, a second truth emerges.”
What should you settle before you build reports?
Your chart of accounts, the dimensions you post against and the definition of each key figure. A report can only split what was recorded with the posting. To see margin per product line in the general ledger, the product line has to be on every posting.
In IFS these dimensions are called code parts, and code part A is always the general ledger account. Code parts B to J are optional and user-defined, for example cost centre, project or object. IFS describes each code part as independent of the others, so you can report in several dimensions.
IFS advises defining the code parts and their values before you start using the system. There is a reason for that. A code part value that already has postings cannot be deleted or given a different identity. You can, however, limit its validity and replace it with a new value.
Also agree what each key figure includes and which accounts and code parts feed it. For choosing those key figures, use our guide to KPIs and metrics.
We recommend making a controller the owner of each definition, with the application manager making the changes. Eqeep designs the cost structure, approvals and reporting with your controllers. You decide which dimensions you track and who may change a definition.
How do you build financial reports in IFS Cloud?
Mainly with IFS Business Reporter, which IFS calls its main solution for financial reporting and planning. You design reports in Excel, while the data comes from IFS Cloud. Zoom-in and drill-down take you from a total to the detail behind it. For day-to-day overviews there are also lobbies and scheduled Quick Reports, two of the IFS Cloud features hiding in plain sight.
An accounting structure in IFS adds up balances hierarchically in queries and reports, for example into a balance sheet or income statement. Business Reporter pulls accounting and project structures straight into a report. So set the grouping once in the structure, and every report uses the same one.
Business Reporter can also write budgets and forecasts back. Projects can be recorded in detail, with expected hours and expenses. Each project holds a budget version and several forecast versions, so you spot deviations from the actuals in time.
How do you consolidate the figures of several companies?
With IFS Group Consolidation. According to IFS, its focus is the operational consolidation of the balance sheet and income statement, with operational and legal structures handled side by side. Each company reports its balances to a master company, where currencies are translated and intercompany balances and equity are eliminated. You can then analyse the consolidated balances, for example in Business Reporter.
The companies do not need one chart of accounts. According to IFS, each can keep its own and report in any currency. When they report to the master company, their balances are mapped to the group chart of accounts. You decide in advance which accounts are intercompany and who maintains that mapping.
Business Reporter, Group Consolidation and the Power BI analysis models may not be in every IFS Cloud licence. We check what yours includes.
How do you keep control of the month-end close?
By running the close in the system, in stages. Late postings can then no longer land in a closed period, and your controller decides when the month is finally closed. In IFS Cloud, a period is open, closed or finally closed. You close a period per user group, or for everyone at once in the main calendar.
IFS suggests blocking future periods, so nobody posts to them by mistake. Once all vouchers (accounting entries) for a period are entered, you close it to selected user groups. It stays open for whoever reconciles the period.
Before closing, IFS checks that all the period’s transactions are updated; vouchers in the hold table go to the ledger first. A closed period can be reopened for extra vouchers; a finally closed period cannot.
What will your auditor want to trace?
Who posted and approved what, and what changed in the master data. In IFS Cloud, you can switch on an approval workflow for manual voucher types. With the Separate User Approval option, someone other than the person who entered a voucher approves it. Which user group may use which voucher types is set per number series.
History Log records changes to master data, for the tables your administrator switches on. For each change, IFS keeps the user, the time and the old and new value. Agree with your auditor which approvals and logs they want to see, such as the log on accounts and code part values.
How did a customer with 33 information systems approach it?
By bringing all 33 sources together in one ERP system and assessing, source by source, what overlaps and what needs converting. That is how you untangle a patchwork of finance applications, with one source for the figures as the goal. In early 2024, one of our customers was in the middle of that change. They found it hard to combine the data from 33 different sources of information.
Because the customer had worked the same way for years, switching was difficult. Eqeep guided the change and provided instructional training on the new system.
Where do you start with one financial system?
With your processes, because the way we work puts analysis before advice and implementation. Before you implement a new system, we map with you how the work runs today. On that basis, we assess whether IFS Cloud fits and which functions and integrations are still needed. Eqeep first charts the structure of your organisation.
Where the standard does not fit, you choose between configuration and customisation, two routes we compare in IFS development and optimisation. Under an application management agreement, Eqeep carries regulatory changes through into your ERP system. If needed, we create a new template for the financial report.
For a small administrative requirement, the implementation effort may outweigh the benefits. That is why we first assess process needs, integrations and available capacity. If you already run IFS Cloud, start with your code parts and accounting structures, because they decide what a report can break down. Start with an analysis.
Questions about financial reporting
Can you build financial reports in Excel with data from IFS Cloud?
Yes. IFS Business Reporter uses Excel as the client for reporting, planning and analysis, while the data stays in IFS Cloud. Reports run online or on a schedule, with output in Excel or as a PDF.
Does IFS Cloud work with Power BI?
Yes. IFS provides analysis models for Power BI and Excel pivot analysis, including a general ledger model for financial statements and visualisations. We check whether your licence includes them. For the general ledger model, IFS recommends setting up accounting structures for the income statement and the balance sheet.
Does every company in the group need the same chart of accounts?
No. According to IFS, reporting companies in IFS Group Consolidation can keep their own chart of accounts and report in any currency. The consolidation maps their balances to a common chart of accounts.
Tell us where you stand with IFS. After one conversation, you will have a clear next step. Bring your monthly report and your chart of accounts, and we will discuss the route and the next decision. Discuss your IFS question.
