Looking for a solution to simplify financial consolidation and reporting across your organization?Interested to know about what is Hyperion Financial management andhow it ensures the accuracy and security of your financial data?

In this blog, you’ll discover how Hyperion Financial Management empowers businesses by streamlining the financial consolidation process. By integrating data from various subsidiaries, HFM helps ensure compliance with accounting standards such as GAAP and IFRS, while also enhancing the accuracy and efficiency of financial reporting.

Whether managing intercompany transactions, currency translation, or regulatory compliance, HFM optimizes financial workflows and provides greater visibility into an enterprise’s financial performance.

What is Hyperion Financial Management?

Hyperion Financial Management (HFM) is a financial consolidation product used in various industries, including trade finance and financing.

It is primarily used in medium and small companies, as well as large companies.HFM helps organizations understand their costs, experiences, and profits by consolidating data from bottom to top levels.

Each level of the system performs a consolidation of tasks, from bottom to top, to provide a comprehensive view of data, budgets, forecasts, and prior year data.

HFM also handles currency translation, ensuring that data is entered in local currency but translated to the parent or application currency.

For example, if a company’s headquarters is in the UK, the application currency could be pounds or euros. HFM handles these translations using a currency transmission method.

Overview of Hyperion Financial Management

HFM is a financial consolidation tool that combines financial data from multiple subsidiaries or business entities within an organization and rolls it up to a parent company for reporting purposes.

It involves data collection from different locations, such as subsidiaries or sub-regions, and reporting the data to the top level of the parent company.

The process involves quick calculations, such as multiplying accounts or creating rules for intercompany transactions. For global organizations, data translation is necessary for multicurrency transactions and elimination and consolidation are performed.

The data is validated using process management, and it is then reported in a format that can be viewed in a four-story format.

The process involves data collection from various stakeholders, calculation, translation, elimination, consolidation, and validation.

The data is then reported to external stakeholders, such as public sector companies, to ensure proper submission and validation.

Hyperion Financial Management Guide provides various functions for managing accounts in Hyperion. The first function is the account type, which can be specified by mentioning the dimension name.

This function works on the current account member and can bring base members under profit and loss.

The second function returns a True statement if a particular member is a child of profit and loss. The third function is the consolidated function, which returns a True statement if an option is selected.

It can be used with both Account and Entity dimensions. The fourth function returns the number of base-level members under a hierarchy or a parent number of child members under a parent.

The fifth function is the plug account, which returns the plug account value. For example, if an account is intercompany revenue and a plug account is sales underscore, it will return sales underscore.

The sixth function is the member function, which gets the name of the current member and can be used in calculations, translation consolidations, and member functions.

The seventh function is the hechas dot expression, which is most commonly used in the calculation and translation routines.

It puts data in a combination of account ICP and custom one to four members. The eighth function is the HS dot expression, which uses the year-to-date method to translate a currency.

Intercompany Elimination and Financial Consolidation in Hyperion Financial Management

Intercompany elimination is an essential aspect of HFM, where transactions between subsidiaries are removed during the consolidation process to ensure accurate financial records.

This method helps companies save costs, for example, when multiple locations handle different equipment.

By eliminating intercompany transactions, organizations maintain consistent financial records across different regions and subsidiaries.

HFM serves as a valuable financial consolidation tool that allows businesses to manage their costs, revenues, and profits in one unified platform.

Public sector companies also utilize HFM for their financial reporting, ensuring that intercompany transactions are eliminated, data is accurately transferred to the top level, and ownership calculations are properly consolidated. 

Hyperion Financial Management Functionality and Evolution

The account structure in HFM includes key financial metrics such as income before taxes, gross margin, total revenues, and total costs. Gross margin is calculated by dividing total revenues by total costs, which includes salaries and other expenses.

The system also handles multi-currency applications, translating INR to USD using different exchange rates for various items (average rate, month-end rate, year-end rate).

Intercompany elimination removes transactions between subsidiaries to ensure accurate financial reporting by creating an elimination entity with matching transaction numbers.

The system’s detailed translation and reporting processes ensure that financial data is accurate and reflects proper accounting practices.

Oracle’s HFM has evolved from Miko Control in 1980 to Enterprise Performance Management (EPM) in 1991, and later to Hyperion in 2000. In 2007, Oracle acquired Hyperion and introduced the FCCS cloud-based version in 2016.

Oracle now offers both on-premise and cloud-based versions of HFM, with a new FTCS 11.2 version planned for stable long-term use.

Migration from HFM to FCCS can be challenging for existing clients. Those using older on-premise versions (11.1.2.3/11.1.2.4) are advised to upgrade to 11.2, as older versions will no longer be supported beyond December 2021.

Oracle’s cloud offerings, like Oracle Cloud and AWS, provide flexible hosting options depending on client needs.

HFM supports integration with other applications like SAP and PeopleSoft, helping organizations manage data efficiently and maintain smooth processes for reporting and analysis.

HFM enables fast financial consolidations, reduces reporting cycles, and offers robust process management for quick review and approval. It supports multiple currencies and provides insights into profitability at various levels like company, product, and customer.

Global Compliance, Reporting, and Outputs in Hyperion Financial Management

HFM supports global operations by maintaining compliance with multiple accounting standards, including IFRS, US GAAP, and Indian standards.

It allows companies to consolidate financial data based on local regulations and international frameworks.

Additionally, HFM handles VAT data, either entered directly or sourced from external systems and generates various financial reports.

These reports such as profit and loss, balance sheets, cash flows, and supplemental reports can be shared with stakeholders, including directors, regulators, and the public.

Public companies rely on HFM to prepare their quarterly and annual reports, which are crucial for evaluating performance. Market participants interpret these reports to assess the company’s financial health and performance.

Types of Data Forms in Hyperion Financial Management

HFM offers two data forms, data grid and data form these tools are used to input, view, and manage financial data.

Data form: Data form has a limited point of view selection, allowing for row and column formatting, and custom calculations.

Users can input data and view it and can perform calculations or execute them on demand.

Data grid: The data grid is a template with predefined rows and columns, allowing users to input data and view it. Drill-back features allow users to see the source data of an application, and the data grid is another way to represent data within HFM

HFM offers a comprehensive solution for managing and presenting data in various ways. Gartner, a leading research and advisory company, reviews companies in the market and releases quarterly or annual reports.

They have been a leader in financial planning applications, such as Hyperion HFM and planning applications. Oracle has been a leader in these areas for the last few years.

Hyperion Financial Management Migration, Installation and Features

A migration project from HFM 11.1.2.3 to 11.2 is underway and set to be completed by the end of the year. This process, lasting nine months, includes certification upgrades and enhancements, with no new releases planned for the next 10 years.

The migration requires adapting to different environments before returning to production. Oracle HFM installation involves setting up the database schema, username, and password.

It also includes deploying the application server and configuring server clusters for reliability. In case of server failure, activity is routed to other available servers.

HFM Package includes tools like Oracle Financial Reporting and Hyperion Financial Reporting.

The Ferrovia tool enables web-based reporting in multiple formats, while the Hyperion add-in integrates HFM with Excel for data calculations.

Foundation services manage user security, with a workspace for accessing all Hyperion applications.

The architecture supports integration with ERP systems and provides a multi-tiered setup including client, middleware, and database.

HFM Business Processes allow data entry through forms, SmartView, or ERP systems, and perform calculations and business rules.

The adjustment journal model tracks data and currency conversions, while person management handles approval before publishing data.

Dimensions in HFM, including system-defined and custom dimensions, help with data organization and reporting. Custom dimensions track specific data like product, customer, or balance sheet movements, ensuring accurate financial analysis.

HFM supports efficient financial management by offering tools for data entry, reporting, security, and dimension management, enabling accurate and timely decision-making.

Benefits of Hyperion Financial management               

HFM has features and benefits such as reduced consolidation and reporting cycles by days and weeks, making it ideal for automation projects with large numbers of accounts and entities.

It can perform a consolidation within a second for a large application, taking one hour or two for a large number of accounts and entities. There are various ways to reduce construction time depending on the requirement.

HFM offers several benefits, including reduced consolidationand reporting cycles, efficient data collection and consolidation, and integration with other EPM systems and ERP systems.

Hyperion Financial Management is a powerful and advanced financial management solution that enables businesses to streamline their financial operations and gain real-time insights into their financial performance.

This solution can handle vast amounts of data, manage intricate financial consolidation and reporting, and provide live financial performance insights, making it a popular choice for large and mid-sized companies.

By adopting Hyperion Financial Management, companies can enhance financial governance, minimize risk, and increase operational efficiency, resulting in better financial performance and increased profitability.