![]() This manual process has a high probability of data errors. For example, copying the master records and chart of accounts from one database belonging to one company to another database of another company. The resulting process can be inefficient and increase the risk of data errors. With the acquisition of new businesses, geographic growth, product lines or when there is a need for security between divisions, multi-entity companies need to add additional companies or databases within an ERP to accommodate their growing structures. This can cause further delays, if there are late entries or other adjustments required to complete the financial consolidation at the end of a period.Īutomating Multi-Entity Financial Consolidations If you are using email and spreadsheets to share information, manual entry and collaboration does not happen in real-time. If there are multiple people closing period-end across entities, this increases the chance of errors and delays reporting to a head office of a multi-entity organization. Manual consolidation processes can cause further delays due to time-consuming manual entries. In addition, critical data can be lost without proper back-ups. ![]() Links between spreadsheets could break, resulting in a loss of function and errors. Manual, spreadsheet consolidation is error-prone for multi-entity consolidations. Without a way to consolidate this information, it becomes increasingly difficult for decision-makers to get a big-picture view of the company’s financial health. Manual Multi-Entity Financial ConsolidationsĪccounting practices for a single entity will often not work for multi-entities for tasks such as period-end closing and reporting, as well as maintaining regulatory compliance. Without proper monitoring, these separate entities can spend over their budget, make data entry errors or be subject to theft and fraud. One of the challenges is how to control or effectively monitor transactions in each of these distinct entities when the entity can be in different countries or different time zones. This poses several challenges for CFOs, controllers and other senior finance managers at a head office of a multi-entity organization. It is very common, particularly in medium to large companies to have multiple subsidiaries, business units or satellite offices, often in other countries. Multi-Entity Accounting?Ī single entity can be one business, department, or operating unit within a business, whereas a multi-entity business could be a parent company, holding company, or conglomerate with various subsidiaries. Multi-entity businesses can also apply to a single company, if the organization operates with various departments, segments, operating units and regions as separate entities for accounting.
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