How to Setup and Run Consolidations in Business Central

Learn how to setup, run and report consolidations in Microsoft Dynamics 365 Business Central.

This training article walks through the setup requirements, consolidation process, rerunning consolidations when adjustments occur, and the reports available to review consolidated financial results.

Dynamics 365 Business Central allows organizations with multiple entities to consolidate financial information into a single reporting company, making it easier to produce consolidated financial statements and analyze overall organizational performance.

Understanding Consolidations in Business Central

Before running consolidations, it's important to understand the structure required. A consolidation requires:

• A dedicated Consolidation Company

• One or more Business Units (subsidiaries) that will be consolidated

• Appropriate General Ledger account configuration

• Currency translation setup, if applicable

  
  

The consolidation company collects financial information from the participating entities and creates consolidated entries for reporting purposes.

Consolidation Setup 

Most consolidation setup occurs within the Consolidation Company.

Access the Business Units List by opening Global Search (Alt + Q) and typing in 'Business Units'

Click “+New” to add a new business unit (company).

In the General section, enter the required information. Some fields may not apply depending on the company being consolidated and when it was added.

Field	Description
Code	A unique identifier for the entity (20-character limit)
Name	The legal or reporting entity name
Currency Code	Used when the subsidiary operates in a different currency
Currency Exchange Rate Table	Choose whether to use consolidation company rates or subsidiary rates
Consolidate	Must be enabled for the company to participate in consolidation
Consolidation %	The percentage ownership to be consolidated
Starting Date	Required only if fiscal years differ
Ending Date	Required only if fiscal years differ
Data Source	Typically Local Currency (LCY)
Last Run	Populated automatically after consolidation
Log Requests	Typically used only for troubleshooting

The Data Import section controls how Business Central retrieves data from each business unit. Make sure it is populated with the information needed so it can properly connect to the company that needs to be consolidated.

Field	Description
Default Data Import Method	Database is used if the company is within the same tenant. If it is on a different tenant, you will need to select API.
Company Name	If you selected Database, this field would show and is where you select the company that exists within your tenant.
API’s Endpoint	If you selected API, this field would show and is where you will put the API taken from the company that is being consolidated.
File Format	This should be left as Version 4.00 or Later (.xml).

To populate the “API’s Endpoint” import data above, you will need to get this information and configure this in the company that is being consolidated. 

Start by going to the “Business Units” in the company that needs to be consolidated by searching for it in the global search.

Then click “Setup”.

Ensure you turn on the “Enable company as a subsidiary” option. The API is what you will need to copy so that you can input it in the consolidation company’s Data import section for the selected Business Unit card in the “API’s Endpoint” field.

In the G/L Accounts section, you will be populating the GL accounts that will be used to record gains and losses and the accounts where the cumulative translations (CTA) will be recorded to.  

The accounts that are used will depend on the “Consol. Translation Method” that is chosen on the G/L Account Card. This will be shown after.

Field	Description
Exch. Rate Gains Acc.	This is the account that will be used for gains when the translation method is “Average Rate (Manual)”, “Closing Rate” or “Historical Rate”.
Exch. Rate Losses Acc.	This is the account that will be used for losses when the translation method is “Average Rate (Manual)”, “Closing Rate” or “Historical Rate”.
Comp. Exch. Rate Gains Acc	This is the account that will be used for gains when the translation method is “Composite Rate”
Comp. Exch. Rate Losses Acc.	This is the account that will be used for losses when the translation method is “Composite Rate”.
Equity Exch. Rate Gains Acc.	This is the account that will be used for gains when the translation method is “Equity Rate
Equity Exch. Rate Losses Acc	This is the account that will be used for losses when the translation method is “Equity Rate”.
Residual Account	This is typically referred to as the CTA (Cumulative Translation Account). This account is used to record the balancing difference that can happen when financial results are converted using different exchange rates. For example, the balance sheet may use the exchange rate from the end of the period, while the income statement may use an average rate for the period. Because those two rates are different, the converted amounts may not balance on their own. Business Central records the difference in this account so the consolidated trial balance remains balanced.
Minority Exch. Rate Gains Acc.	This is the account that will be used for losses when the company being consolidated is not consolidated at 100%.
Minority Exch. Rate Losses Acc.	This is the account that will be used for losses when the company being consolidated is not consolidated at 100%

If accounts aren’t populated in the Exch. Rate, Comp. Exch. Rate and Residual fields, you will get an error when consolidating. If accounts aren’t populated in the Equity Exch. Rate or Minority Exch. Rate fields, it will default to the “Exch. Rate Gains Acc.” and “Exch. Rate Losses Acc.” accounts.

Now you will need to setup the G/L Account Cards. You will need to fill in the following section on the G/L Account Card.

• Consol. Debit Acc. – This is only populated if you want to specify a G/L Account that is different.

• Consol. Credit Acc. – This is only populated if you want to specify a G/L Account that is different.

• Consol. Translation Method

  • Average Rate (Manual) – This is typically used for all Income Statement accounts. It has manual as this rate can’t stored or calculated in the system. You will have to specify the rate upon running the consolidation function. This will be discussed later.

  • Closing Rate – This uses the exchange rate from the End Date selected when you run the consolidation function.

  • Historical Rate – This will use the rate for each transaction that occurred. For example, if there is a transaction from Jan 15, 2026, and another one from March 5, 2026, it will convert each transaction at the rate for that date. 

  • Composite Rate – Translates the current period activity using the average exchange rate for the consolidation period and adds the translated amount to the existing balance in the consolidation company. This method is commonly used for retained earnings because the balance is made up of amounts accumulated over multiple periods, each potentially translated at different rates.

• Equity Rate – This works the same as the Composite Rate and just posts the gains or losses to the accounts prescribed in the “Equity Exch. Rate Gains Acc.” and “Equity Exch. Rate Losses Acc.”

• Exclude from Consolidation – If enabled, this account will be excluded from the consolidation process.

Running Consolidations

Once setup is complete, you're ready to run the consolidation process.

Regular Consolidation

Go to the “Business Units” list by searching for it in the global search.

Click on “Consolidate”.

You will specify the period you are running the consolidations for and enter a document number and click "Next".

Field	Description
Starting Date	This is the beginning date of the consolidation period. Usually this is the day after it was last run. For example, if it was last run January 31, this date would be February 1.
Ending Date	This is the ending date of the consolidation period.
Document No.	This is used for the entry that is created and posted as part of this process. A general rule is to name it something that identifies it for the period and that it is a consol.
Dimensions	select the dimensions that you want to include. For this to work, you will need to ensure the dimensions and values exist in both the company that is being consolidated and the company where consolidation is occurring.
Parent Currency Code	This will automatically fill in and can be left as it.

Then select the companies you would like to consolidate using the tick box.

If required, you can modify the exchange rates here using the “Configure Currency”. Once you are done updating rate, click “Next”.

Field	Description
Source of Exchange Rate	You can leave this as this was setup on the Business Unit card.
Average Currency Factor	Here you will input what the average rate should be.
Closing Currency Factor	Here you will input what the closing rate should be.
Last Closing Currency Factor	This should not be touched. If changed, it can affect your consolidation process. This rate is what Business Central uses to calculate the change in rates for adjusting previous balances. It automatically populates with the last closing rate used.

Click “Finish” and the consolidation process will run. Any issues will create a popup, and the process will not run, and you will be left at this screen. Once you have corrected any popup messages, you can just click “Finish” again.

The consolidation process has now been completed.

Got Questions? Kwixand Solutions Can Help

Feel free to get in touch with the team at Kwixand Solutions for assistance if you still have questions. Don't forget to subscribe to our YouTube channel for more Business Central training videos, and stay connected with us on LinkedIn, Facebook, and Instagram, for the latest updates.