As a regional, national, or global business, it’s almost a certainty that you need to handle a multi-entity environment. Whether those entities are franchises, branches, separate businesses, or subsidiaries, you know that consolidating the financials across these entities is a “necessary evil,” bringing together data from dozens, hundreds, or thousands of sources to see a complete picture of the business.
Add on top of this differences in supplier management, tax rules, currency conversions, payables, receivables, intercompany transactions, and more, and the challenges begin to ramp up.
Four Reasons Multi-Entity Businesses Are Turning to Sage Intacct
Luckily, technology—especially technology designed with multi-entity businesses in mind—has made life easier for finance professionals at these businesses. Today, we would like to share some of the reasons multi-entity businesses are turning to the cloud.
Flexibility: Setting Up Your Business How You Need
Multi-entity businesses are unique. As your organization is a combination of subsidiaries and locations, there are few—if any—businesses designed in the same fashion. This means that your books and consolidations have to be set up differently than any other organization. New entities need to be set up easily, payables, receivables, and inter-company transactions need to be centralized, and you need the power to roll up and drill down. This requires a flexible, easily set up architecture that can provide you the flexibility you need and the control you deserve.
With Sage Intacct’s financial consolidation tools, you can quickly compare performance across entities. You choose your reporting currency and language. You tailor local account titles to fit local regulations. And you can easily switch between consolidated and local views for further insights.
Visibility: Getting the Information You Need
For executives and financial professionals at the headquarters, even if you never come into contact with a single location or subsidiary, you still need them to show you the money. Whether you’re tracking key performance indicators, comparing costs and profitability of multiple locations, or rolling everything up for a monthly, quarterly, or annual close, visibility into the numbers is critical.
With Sage Intacct, reporting from single locations to headquarters is simple and from financial professional to executive is just as easy. Ensure your financial statements are ready when you are, and close the books effortlessly. Comprehensive automation with one-click consolidation delivers accelerated closes, improved accuracy, and better visibility. Plus every global consolidation includes a detailed journal entry report for easy auditability.
- Journaled consolidations: Get granular visibility throughout the financial consolidation process with eliminations and currency impacts recorded as journal entries, and easily make post-consolidation adjustments
- Intercompany eliminations: Automate intercompany eliminations at the point of consolidation
- Complex ownership: Consolidate complex ownership structures such as minority and partial ownerships
- Unlimited hierarchies: Generate consolidated management reporting views of combined entities beyond your legal structure
Control: Make Changes When You Need
With the flexibility you need to manage a growing list of entities and the visibility to see what’s working well, the next component of a multi-entity financial strategy is to take control of the way you allocate resources across the organizational chart. Too often, spreadsheets, manual processes, and communication issues stand between headquarters and subsidiary, resulting in inaccurate, delayed, or off-policy—creating issues for the team trying to bring it all together.
With a well-documented policy and workflow in place, and the technology to simplify the consolidation process across the organization, you can take control of the way your business works. This requires all three components—people, processes, and technologies—for success. Without one of these components, the multi-entity consolidation process slows down, increases risk, and fails to support growth.
Scalability: Ready for What’s Next
Whether you were a multi-entity business from the outset or became one through M&A activity, growth often fuels growth, and each addition or expansion means more complexity and ultimately more paperwork—especially without the right technology.
The finance function must be nimble enough to keep up with the corporate strategy by establishing books and records that align with the rest of the company. They also need a turnkey solution to get their systems and processes up and running to generate valuable information to support all the myriad of decisions that happen at the beginning of a new entity. At the same time, those in the corporate accounting group want and need to roll-up a new entity without missing a beat.
Cloud financial management systems are ideal for ramping up new entities. Existing divisions or companies, perhaps with like-businesses, can be used to quickly configure the accounts of the new entity. Report writers can be used to adapt reporting needs to meet the different jurisdictional and GAAP requirements. The chart of accounts is easily adapted to localize reporting to meet the needs of the new business unit.
Learn More: Sage Intacct for the Multi-Entity Business
Too often, multi-entity businesses face the above challenges due to improper controls, workflows, or technological readiness for the workloads that come with the multi-entity close process. As your business continues to grow, one of the best things you can do to fuel this growth is to automate, integrate, and control. With a multi-entity-focused platform like Sage Intacct, your business can:
- Accelerate the initiation and integration of new entities in any global jurisdiction with the corporate consolidation function.
- Centralize the core processing functions, resulting in improved control and opportunity realization.
- Improve your decision-making with greater visibility into each entity.
- Increase collaboration throughout the close process between those working in the business units and those in the corporate accounting group.
- Speed up the close process by giving everyone from those at the unit level to the headquarters better tools to get the job done.
- Sage Intacct Tutorial: GL Accounts in Multiple Entity Environments
- Challenges and Opportunities in Multi-Entity Environments
- Sage Intacct Tutorial: Setting Up Restrictions in a Multi-Entity Environment
- Tips to Manage a Multi-Entity Environment in Intacct
- Difference Between Financial Consolidations and Consolidated Reporting