The Trouble with Doing Multi-Entity Consolidations the Traditional Way
With the addition of each new company location, acquisition, or whatever entity-expanding activity is driving your growth, you’re watching your business’s organizational chart grow. And along with it, new accounting needs are emerging. Your team may now need to manage multiple currencies or inter-entity transactions, and your payables may be de-centralizing.
You’re probably feeling it’s time for a change.
Financial Consolidations, the Traditional Way
Your existing accounting practices have served you well up to this point, with only one entity (or maybe two) to account for. But now, the tasks associated with closing the books, reporting, and maintaining regulatory compliance are becoming more complex—thanks to more intricate consolidations—and it’s becoming increasingly important for decision-makers to get a big-picture view of the company’s financial health.
Yet your manual, spreadsheet-based consolidation workflow is…
- Error prone. Multi-entity consolidations that are managed using spreadsheets inherently carry greater risk. Not only can spreadsheets “break,” but critical data can be lost without proper system back-up. Plus, there’s always a chance of human error that occurs with manual entry, especially when multiple systems are involved
- Time consuming. Your process holds so much potential for delays. For one, if there are multiple people closing their books and then feeding reports to a single, corporate “gatekeeper,” the numbers will take longer to align. Also, if you’re using e-mail or even paper to share information, there’s some degree of manual entry involved and you can be sure collaboration doesn’t happen in real-time. If there are late entries or other adjustments required to fully close out the consolidation, the timeline keeps stretching on.
- Anything-but-strategic. All things considered, mounting inefficiencies are holding your department back from playing a greater strategic role in your organization. It’s that simple.
Now that your consolidations aren’t quite so straightforward, your team’s overall productivity is starting to decrease and they’re struggling to respond quickly to management’s demands, particularly at period-end. This doesn’t support company growth. It’s no wonder you’re saying, “there’s got to be a better way!”
Multi-Entity Financial Consolidations, the Modern Way
Today’s growing companies rely on cloud-based financial management software to handle the heavy lifting—and to automate their workflows. Automation speeds up each and every process and helps ensure data accuracy, consistency, and compliance. These elements are essential to bringing together the financials of multiple entities and reporting on the parent organizations’ health—in much shorter timeframes than is possible using a manual, spreadsheet-based method.
An advanced, built-to-scale system like Intacct’s financial management suite enables superior collaboration and transparency across entities, departments, and management levels. Involving key stakeholders in the closing and consolidation activities helps strengthen both intra- and inter-entity relationships and provides optimum visibility into the organization’s performance. And this is exactly what your growing company needs to keep expanding into the future.
To learn more about Intacct’s powerful solution, read Managing Multiple Entities with Flexibility and Ease.