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7/23/2019 HFM Traning HITATHI

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Hitachi Consulting | | HFM

Pressure on Finance Departments


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Consolidation At-a-Glance


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Consolidation Process

What is Financial Consolidation?

Consolidation in financial accounting is a technique that summarizes a group of companies' financial statementsinto one. This offers the benefit of ie!ing the !hole group's financial information together to see ho! all

companies are doing combined.

"ncreasingl#$ global organizations need to integrate data from multiple transactional s#stems$ transition to ne!

international financial reporting standards$ and improe their transparenc# and regulator# compliance

procedures.

Companies use a ariet# of tools %spreadsheets$ emails$ piots and queries& to identif# and summarize all

business unit actiit# that interacting !ith other business units.

This can often mean thousands of transactions$ all of !hich must be identified$ reconciled and eliminated

(limination

"ntercompan# elimination refers to the process for remoal of transactions bet!een companies included in agroup in the preparation of consolidated accounts.

"ntercompan# transactions %sales$ serices$ transfers& must be eliminated in the parent financial statements

other!ise a compan# could be )double*counting+ actiit#.

Ho!eer$ the process inoles a lot of reporting and paper!or, for intercompan# relationships can be quite

complicated.

-ata must be reie!ed$ reconciled and approed before process is complete.


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Wat is H!perion Financial Mana"ement #

/racle H#perion Financial Management %HFM& is a comprehensie$ Web*

based application that deliers global financial consolidation$ reportingand anal#sis in a single$ highl# scalable soft!are solution.

HFM utilizes toda#'s most adanced technolog#$ #et is built to be o!ned

and maintained b# the enterprise's finance team.

HFM has financial controls$ !or,flo! and best*practices built into the

platform to support0

1. 23 4556 and "F73 7eporting

8. 3arbanes /9le# %3/:& Compliance;. 5udit Trails and 5ctiit# 7< Capabilities

. "ntercompan# (liminations

@. Foreign (9change Translations


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HFM is a finance*o!ned$ "T*supported s#stem that allo!s #our

organization to quic,l# ma,e changes as conditions !arrant buttrac,s those changes to proide transparenc# and isibilit# for

auditabilit#.

While HFM is a !eb soft!are application$ it also has an add*in !ith

Microsoft /ffice %called 3martie!& !hich allo!s users to forecast orbudget in Microsoft (9cel$ an enironment comfortable to most

finance users.


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Wat HFM $ill do #

"t !ill consolidate the set of data !hether actual$ budget$

forecast "t supports the multi 4556 reporting


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HFM Arcitecture


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H!perion Financial Mana"ement &'er'ie$

-ata (ntr# Forms E4rids

Calculate

Feature

Bournals

Consolidation

6rocess ManagementH#perion 7eports E

3mart ie!



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H!perion Financial Mana"ement Dimensions

| HFMHitachi Consulting |


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(%panded Dimensionalit!


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HFM )o"in


HFM Client


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Application Pro*ile

We hae to create application profile before creating an application in HFM .

"n 5pplication profile three dimensions are coered .

1. ear

8. 6eriod

;. ie!

These are the predefined dimensions !e hae application profile concept in classic

method and once in a life time of the proDect crate application profile .

"n case if #ou !ant to modif# !e hae to delete the e9isting application and

create a ne! application profile .

The e9tension of application profile is .per%profile& .

5pplication 0 We hae to create an application either from client or from

!or,space .


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Dimensions

"n HFM $ There are 18 dimensions as follo!s

1 . 3cenario

8. ear

;. 6eriod

=. ie! . (ntit#

@. 5ccount

I. "C6%"nter compan# partner&

J. alue

K. Custom1

1L. Custom8

11. Custom;

18. Custom=


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(9cept custom dimensions rest are the standard dimensions.

Custom -imensions 0 The -imensions !hich are al!a#s

associated !ith account dimensions for additional information.

(90 5Ec 3ales

5ccount*3ales

C1

TeamsC8

-epartments C;

GoneC=

Gone

| HFM


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Gote0 5l!a#s 5ccount dimension is associated !ith custom

dimension !hich is a alid combination . "n case if !e !ontassociate custom dimensions !e !ill get inalid

combinationE"ntersection.

6/0 6oint of ie!$ "t is the combination for all dimensions inapplication !ith a alid intersection to ie! the data.

We hae to select each member from each dimension as a

6/. "f !e !ant to use a member from an# if the dimension

%custom& !e hae to select as G/G(

| HFM


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+,cenario . 3et of data !here it can be actual or budget orforecast.

The 3cenario dimension represents a set of data$ such as >udget$

5ctual$ or Forecast. For e9ample$ the 5ctual scenario can contain

data from a general ledger$ reflecting past and current business

operations. The >udget scenario can contain data that reflects the

targeted business operations. The Forecast scenario t#picall#contains data that corresponds to predictions for upcoming periods.

5


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/, 0ear.

The ear dimension represents the fiscal or calendar #ear for data.5n application can contain data for more than one #ear. ou specif# a

#ear range !hen #ou create the application and then select a #ear

from the ear dimension to process data.

1, Period.

The 6eriod dimension represents time periods$ such as quarters and

months. "t contains time periods and frequencies b# displa#ing the

time periods in a hierarch#. For e9ample$ if the 5ctual scenario

maintains data on a monthl# basis$ generall# 18 periods of data are

aailable for this scenario in a #ear. H#perion Financial Management

supports #ears$ months$ and !ee,s for the period dimension. "t does

not support da#s for the dimension. ou edit periods and frequencies

in the application profile

| HFMHit hi C lti |


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2,(ntit!

The (ntit# dimension represents the organizational structure of the compan#$

such as the management and legal reporting structures. (ntities can representdiisions$ subsidiaries$ plants$ regions$ countries$ legal entities$ business units$

departments$ or organizational unit. ou can define unlimited entities.

The (ntit# dimension is the consolidation dimension of the s#stem. Hierarchies

in the (ntit# dimension reflect arious consolidated ie!s of the data. arious

hierarchies can correspond to geographic consolidation$ legal consolidation$ or

consolidation b# actiit#. 5ll relationships among indiidual components of the

members that e9ist in an organization are stored and maintained in this

dimension. (ntities in an organization are dependent$ base$ or parent entities.

-ependent entities are o!ned b# other entities in the organization. >ase entities

are at the bottom of the organization structure and do not o!n other entities.

6arent entities contain one or more dependents that report directl# to them.

ou use the Manage Metadata module on the -es,top to define attributes for

members of the (ntit# dimension$ such as the default currenc# and securit#

class$ and to specif# !hether the entit# allo!s adDustments and stores

intercompan# detail.

| HFMHit hi C lti |


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3, 4alue.

The alue dimension represents the different t#pes of

alues stored in #our application$ and can include the input

currenc#$ parent currenc#$ adDustments$ and consolidation

detail such as proportion$ elimination$ and contribution

detail. For e9ample$ the (ntit# Currenc# member stores thealue for an entit# in its local currenc#. The 6arent

Currenc# member stores the alue for an entit# translated

the to currenc# of its parent entit#.

| HFMHit hi C lti |


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5, Account.

The 5ccount dimension represents a hierarch# of natural

accounts. 5ccounts store financial data for entities andscenarios in an application. (ach account has a t#pe$ such

as 7eenue or (9pense that defines it accounting behaior.

ou use the Manage Metadata module to define attributes

for members of the 5ccount dimension$ such as theaccount t#pe$ the number of decimal places to displa#$ and

!hether the account is a calculated$ consolidated$ or

intercompan# partner account.

| HFMHit hi C lti |


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6, Intercompan!.

The "ntercompan# dimension represents all intercompan#balances that e9ist for an account. This is a resered

dimension that is used in combination !ith the 5ccount

dimension and a custom dimension. H#perion Financial

Management can trac, and eliminate intercompan#transaction details across accounts and entities. ou can

also run intercompan# matching reports to ie!

intercompan# transactions.



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7, 4ie$.

The ie! dimension represents arious modes of calendarintelligence$ for e9ample$ 6eriodic$ ear*to*-ate$ and uarter*

to*-ate frequencies. "f #ou set the ie! to 6eriodic$ the

alues for each month are displa#ed. "f #ou set the ie! to

ear*to*-ate or uarter*to*-ate$ the cumulatie alues for the#ear or quarter are displa#ed.

8,,+/ , Custom Dimensions

Four custom dimensions are aailable for anal#sis of detailed

data. ou can use custom dimensions to store additional

details associated !ith accounts$ such as products$ mar,ets$

channels$ balance sheet moement$ or t#pes of elimination.

For e9ample$ custom dimensions could include 6roduct


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Creatin" Application Pro*iles

ou use application profiles for the follo!ing purposes0

To define the languages aailable for entering descriptions

To define the application calendar

To define the application frequencies




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Accessin" te Process Pad

ou can access the process pad from the H#perion Financial Management Windo!s des,top client.

ou can enter up to 1L languages.



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(ditin" Periods

ou can edit period labels and add descriptions.

(ach hierarch# leel corresponds to a frequenc#.

5dd multiple

periods.

5dd

sibling.

5dd

child.

3ae application profiles either locall# or on the application seer !ith the e9tension .per.




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Application Re9uirements

ou should hae this information on hand before #ou create an

application0

The name of the application serer cluster

The label and description of the application

The file name and path of the application profile %.per file&




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ettin" :p Applications

ou can access the Create 5pplication tas, from the File menu.




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Access and (dit Metadata Files

Create and editmetadata files.

Load metadatafile into theapplication.

3elect the

metadata t#pe.

3earch for a

member

Create a ne!

file /pen a

file

3elect a

member to edit

from the list

3ae changes




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;uildin" Mem


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(ditin" Groups o* Mem


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ettin" :p (ntities

(ntities define the consolidation path for #our data.

(ntit!

[None]

Acti'it!

Cali*ornia

:nitedtates

Geo"rapical

Plant+

Westales

Connecticut

(astales

(ast3ales and

West3ales occur

in alternate rollups.

(ntit!

[None]

Acti'it!

Geo"rapical

aleser'ices

Westales

Manu*acturin"

(astales

(meaales

(meaer'ices

De'elopment

;e*ore addin" an entit!= !ou sould a'e tis in*ormation. Te parent to $ic te entit!>s data rolls up Te currenc! in $ic data is input *or te entit! Weter ad?ustments trou" ?ournal sould


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(ntities and Intercompan! Partners

3pecifies !hether

the entit# displa#s

as a member in the

"C6 dimension

3pecifies a

securit#class for the

entit# for

intercompan#

transactions

California

6lant1

West 3ales

1LLL

Members of the "C6

dimension

Members of the (ntit#

dimension

"s"C6 member attribute

selected

6lant1

West 3ales

Te ICP dimension includes allmem


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Addin" Currencies

0ou must add a currenc! to te application *or eac de*ault currenc! assi"ned toan entit! in te (ntit! dimension,

5dd or edit

currencies.

Hitachi Consulting | |



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ettin" :p Accountsand Custom Dimensions

Te Account dimension de*ines te cart o* accounts *or an application, Custom dimensions pro'ide additional detail *or accounts,

Ten prede*ined account t!pes pro'ide


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Assi"nin" Custom Memalance and its

descendants in Custom=

are alid for Cash.

g | || HFM



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Account Properties *or Intercompan!

Tese are te properties *or intercompan! accounts.

IsICP

Plu"Acct

ICPTopMem


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Con*i"urin" (%can"e Rate and Translation ettin"s

:se te De*aultCurrenc! propert! to speci*! te de*ault currenc! *or te application,

:se te De*aultRateForFlo$Accounts and De*aultRateFor;alanceAccounts tospeci*! te accounts used to store e%can"e rates *or *lo$ accounts and


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De*ault P4A Metod

Te Periodic 4alue Add BP4A metod.

+, Translates ?ust te 0TD can"e *rom te pre'ious period at te current

period>s e%can"e rate

/, Adds tis to te pre'ious mont translated


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Consolidation ettin"s

&r"

A""re"ation *or Intercompan! accounts

Custom consolidation rules

g |



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&r"

(na

(%ample. Plant/ $as sold in anuar!= so !ou mar@ it as inacti'e *rom Fe


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Intercompan! A""re"ations

Te Intercompan!A""re"ationWei"t propert! lets !ou speci*! a consolidationpercenta"e *or intercompan! entities to teir parent ICP Top,

A 'alue o* + represents +EE B*or e%ample= speci*! ,3 *or 3E,

"C6 Top

6lant1

West 3ales



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Additional Features

Intercompan! Reportin" "C6 enables to calculate the "ntercompan# Transactions. &$nersip Mana"ement To distribute the calculation E consolidation percentage to the

immediate parent based on the pre*defined alue.

Rules For creating the business E custom defined calculation scripts for the accounts Eentities based on the requirement.

ecurit! (as# securit# module connecting to the current 5ctie -irector# E


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Common Member 6roperties

Tese properties are common to mem


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ettin" Document Attacment )imits

Document attacment siOe

Num


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)oadin" and (%tractin" Metadata

0ou access te )oad Metadata and (%tract Metadata tas@s *rom te ;ro$ser 4ie$

,



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)oad &ptions

0ou can mer"e te metadata in te *ile $it te e%istin" application metadata or

!ou can replace te e%istin" metadata,



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Data )oad Files

)oad *iles are di'ided into sections $it an e%clamation point as te section delimiter,

ections can


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)oadin" Data

2se the >ro!se button to identif# multipledata load files.

The files are loaded in sequential order. 5 6rogress !indo! sho!s the progress ofeach load.



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Mer"e &ption

7esults of


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Replace &ption

7esults of


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Accumulate &ption

7esults of


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Can"in" te Grid )a!out and Displa!

Clic, the grid settings button.



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electin" Mem


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a'in" Data Grid ettin"s

6riate data grids are displa#ed in the

-ocuments list of the users !ho created them.

Clic, the sae settings button.



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Fillin" Multiple Cells



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ou can spread data from summar# periods to base periods.

preadin" Data

Clic, the submit data button.

(nter amountin summar#

time period.

1

8



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Addin" Cell Te%t

-efault length limitation is JLLL.



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Addin" )ine-Item Detail

5dds a ne! ro!



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A


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(limination Process

235

7ental7eenue0 L

7ental(9pense0 L

California7ental7eenue0 1LL

7ental(9pense0 L

Connecticut7ental7eenue0 L

7ental(9pense0 1LL

6lant1

7ental7eenue0 1LL

7ental(9pense0 L

3ales West

(ast3ales

7ental7eenue0 L

7ental(9pense0 1LL

5dministration

(ast

Mar,eting

(ast



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Plu" Accounts

"ntercompan# 5ccounts Gon*"ntercompan# 5ccount

3ales * "ntercompan# 6urchases * "ntercompan# "nterco-iff6

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