March 28, 2019 2:02 pm | by Fiona
Running your large enterprise and managing interests in two or more legal identities can be complex and complicated. With multi-entity accounting add in the multi-locations, multiple currencies, multi regulations, and you have a whole world of pain to track and manage. The old way is to manually prepare separate accounting for each; expenses, currencies, payments, tax returns and often payroll which can be time consuming. Afterwards you cross your fingers and hope your BAS returns, tax and financial information is correct and balances.
Nowadays your accounting software can sort and align data within the one centralised database. You can run multiple businesses completely independent from each other and automate financial consolidation activities. Imagine eliminating manual processing, having a clear picture of your overall group performance. Spend time concentrating on growing your business.
What are the challenges facing multi-entity accounting and financial reporting
There are definitely some unique challenges in multi-entity accounting and the way to tackle these are by having all the elements combined into an ERP system.
- Consolidation- combining multiple levels and entities. Financial accounts of each entity need to adhere to the correct accounting standards, regulations, rules, and practices of jurisdictions and countries.
- Transactions- multiple countries and currencies poses transactional challenges for any global company. Even if your business is located in a single country, you still need to conduct inter company transactions. Transfer pricing and inter company cost allocations becomes complicated and time consuming.
- Manual entries- it goes without saying, manual entries increase the probability of errors and can lead to inefficient reporting with Excel spreadsheets.
ERP accounting software solutions
An ERP system will fully automate the processes and provide real-time reporting. The management team can make changes, monitor tasks and performances across the whole enterprise. It will provide global consolidation for multiple locations and entities, across different currencies and languages, at a touch of a button. Replicating transactions will be automated between the entities.
SapphireOne ERP provides hassle free multi-entity financials by streamlining the entire process.