Last month at our user conference, Intacct Advantage 2014, I sat down with about twenty of Intacct’s customers to talk about the challenges they faced prior to switching to Intacct. One key theme from these conversations was the pain of running a multi-entity business. Customers relayed that their original financial system worked well under a single location but quickly became a liability as the business structure became more complex.
As companies grow transaction volumes and hold more data, retaining financial data for entities in separate data files and using consolidation spreadsheets becomes extremely labor intensive. When you add the complexity introduced from subsidiaries that have different base and reporting currencies you end up with a highly complex, yet fragile, spreadsheet-based manual process. Whilst designing and building such a spreadsheet process and managing it might earn you some kudos for your Excel Jedi skills, as a finance professional you should ask yourself if you’re building a solution that is scalable and controls risk effectively?
So what is the best-practice example for managing finances for a multi-entity business? Here at Intacct we believe that automation is the key to solving many of the challenges of growing businesses. Comprehensive automation helps you reduce your close time and improves reporting accuracy. For example, in Intacct, everything related to currencies is automated, from using up-to-date rates, to conversions, to re-valuations, and adjusting entries.
Also, automation at consolidation is key in reducing process complexity in a multi-entity system. Inter-company transactions can quickly become a nightmare at reporting time, especially if foreign currency is involved. Using Intacct, you can set up your consolidation structure, intercompany elimination accounts and FX rates once and start consolidation with a push of a button. In addition to providing all this automation, Intacct also gives you comprehensive audit trails by providing you with a full record of the journal entries for the consolidation and currency translations performed.
For growing companies automation can provide tangible results. In a survey of Intacct customers 59% said they reduced their close time by at least a fifth as a result of multi-entity and consolidation automation. If you would like to know more about how top Intacct customers manage over 650 entities on Intacct, join me in one of our upcoming multi-entity product tours.