In today’s increasingly global world, expanding your organisation requires more than setting up physical offices. You need to be able to manage people, data, and transactions from a single, consolidated source.
A multi-company enabled financial management system (FMS) and enterprise resource planning (ERP) can come in handy whether you’re looking to expand internationally or just seeking to open a new location.
However, not every financial and business management software is equipped to handle the requirements and challenges of multi-company organisations. Your solution should be able to fully support multi-currency transactions, financial consolidation, and single-source data management.
SunSystems, for instance, supports unlimited companies across multiple countries. New legal entities can be set up quickly through a simple business unit Copy routine. Each business unit within SunSystems can be unique whilst also allowing you to maintain a consolidated view.
Also, a tool like NetSuite OneWorld enables multi-company business management in real-time. It supports the management of the financial consolidation required of separate companies with multiple charts of account, multi-entity marketing and customer support, the management of disparate sales teams and selling partners, and comes with the capability for rolled-up multi-company reporting and business intelligence requirements in real-time.
Here’s how multi-currency and multi-company functionality in a financial management system aid growth and expansion:
For growth-oriented organisations, a single currency is not an option. You need a solution with multi-currency functionality to handle your company’s localisation needs. Having multiple currencies allows you to transact in each of the held currencies.
As an example, SunSystems provides dual base currency processing as well as the ability to maintain different transaction currencies on a single transaction. This means that you can easily buy, sell and stock goods in any currency, account in parallel currencies, bank or make payments in other currencies, and report back to overseas parent companies in the currency of your choice. OneWorld also allows drill-down to all levels in the underlying businesses — to the item level, the customer, record or to an individual transaction.
Consistency of business structure
When setting up multiple business units, you’d have to consider factors like the functional currency for each of the companies, the financial years of the companies and the chart of accounts and analysis structure.
Whether these factors are the same or different for each of the business units, the multi-entity, multi-currency functionality will allow you to set up a dimension that is best for each situation.
For instance, if there are differences between the entities, then it would point to setting up the different companies as different business units, allowing for the different key definitions and making it easier to maintain and ensure consistency of structure across the companies.
Single point of reference
Multi-company organisations are known to manage multiple lists of products, suppliers, staff, customers, and other data. Multi-company functionality makes it more convenient to manage these sorts of data and maintain records through a single point of reference.
This eliminates problems like dual data entry and inconsistencies in managing customer relationships. Data can be unique to each business unit or kept in sync if desired.
Additionally, global access to a single source of data gives management an eagle’s eye view of everything that is going on in the organisation no matter the number of entities.
Multi-company organisations will struggle to consolidate financial reports without a tool with a multi-company structure.
The most common method of consolidation within SunSystems is done via the reporting tools. The reporting module can easily and quickly report across multiple business units. Consolidation adjustments and eliminations can either be done via targeting certain intercompany transactions or certain accounts to support instant group reporting.
SunSystems also provides support for the physical consolidation of business units, rolling them up into either a single or multiple consolidation entities. Consolidation adjustments and eliminations can also be done as part of this roll-up process and this can be done on a scheduled basis as often as you require.
NetSuite provides corporate headquarters or a parent company with a real-time roll-up of costs, revenue, and commissions for all the companies under its jurisdiction. You can populate a single chart of accounts across subsidiaries or companies, or use separate charts of account for each. It also allows posting between companies through intercompany allocations or journals when needed.
If you’d like to discuss how our financial management and ERP solutions can help your organisation, feel free to book a free consultation call with us today!