Consolidation departments in France
Introduction
FinHarmony trainers often have consolidators among their training participants, many of whom are repeat attendees. These professionals train frequently, sometimes several times a year, even after changing employers.
Our discussions with numerous consolidators have shown that the organization and responsibilities of the consolidation department vary from one group to another. Closing deadlines, for example, can vary enormously, from one to twice as long, even in listed groups. In addition, consolidators frequently receive requests from headhunters, to the point of not even responding to them during their training courses.
Discussions with consolidation managers sometimes reveal frustration at the high turnover in their teams, which can lead them to question their own management methods.
The aim of the study was to gain a better understanding of the organization and structure of consolidation departments, the size of teams and the seniority of employees. It was also interesting to know whether a consolidator leaving the department was looking for a new position internally, or joining the consolidation department of another group. To go beyond impressions and rely on reliable data, a survey was carried out in the second half of 2024. It gathered responses from 55 people, representing 47 French groups, including 11 CAC 40 groups.
Study results: some surprising findings
- Small teams, big responsibilities
The teams are fairly small, yet they carry out consolidations every month and retain tasks that could be entrusted to the subsidiaries.
80% of consolidation departments have fewer than 10 people, although most groups carry out a full monthly consolidation: income statement, balance sheet, cash flow statement and simplified notes.
In addition to these tasks, the consolidators carry out or supervise other assignments that could be entrusted to the subsidiaries, such as IFRS 16 restatements, deferred tax management, treatment of employee benefit obligations, hedge accounting and entries relating to share-based payments (IFRS 2). This phenomenon seems to be explained by a lack of resources or technical skills in the subsidiaries. As for recent treatments such as IFRS 16 (leases), it will be interesting to monitor their evolution and to see whether these tasks will gradually be delegated to subsidiaries as the restatements become better known and understood.
- A department less "technical" than it seems
However, the consolidation department is not as "technical" as it might seem. Surprisingly, only 65% of consolidation departments are responsible for IFRS technical monitoring. To explore this subject further, a forthcoming study will look at group standards managers, who, surprisingly, are not attached to the consolidation department.
- An expanded role for consolidators
Consolidators don 't just consolidate financial statements. It was already known that they know how to manage much more than just figures, in particular the information to be included in the appendices, whether quantitative or qualitative. The study reveals that in over 60% of groups, consolidators also integrate management data, and 30% of consolidation departments handle CSR and/or tax data, such as CbCR (Country by Country Reporting).
Over the next few years, it will be interesting to see whether the involvement of consolidation departments in environmental reporting will increase with the application of ESRS, and whether Pillar 2 will lead to an increase in tax reporting.
This broadening of responsibilities will undoubtedly have an impact on departmental organization and staffing levels.
- Loyalty to consolidators
Contrary to the widespread prejudice that consolidators change employer before 3 years, the study shows that the seniority of consolidation teams is between 5 and 10 years in over 45% of groups.
Consolidators therefore stay with the consolidation department much longer than previously thought. But they are more loyal to their consolidation department than to the company itself. In fact, just over 40% of them choose another position within the same group when they leave the consolidation department.
If you'd like to find out more, you can download the study report here.
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