- What is Accounting Software for Multiple Entities?
- Key Features
- Primary Benefits
- Will QuickBooks Work?
- Best Software
What is Accounting Software for Multiple Entities?
Accounting software for multiple entities is a unified accounting system for organizations with multiple locations or separate business units operating under one organizational arm. This unified accounting database helps improve your cash flow and will set up capabilities such as centralized accounts payables (expenses), receivables (invoices), and general ledger reports. It can also include multi-currency support for international business needs.
Growing companies may find the need for multi-entity accounting software once they begin to expand by opening up a new location. These multi-location organizations may have issues with decentralized payables, different currencies, and transactions between entities.
Financial management software for multiple entities lets data be posted in a way that lets the separate entities monitor the performance of other locations or branches. It can also let management visualize successful vs struggling operations and rely less on receiving this information from a specific bookkeeper.
Accounting software for multiple entities also provides the benefit of eliminating duplicate data entry and any use of manual spreadsheets to consolidate company files. This leads to books being closed faster, faster creation of reports, and centralized payables and receivables with multiple charts of accounts.
Features of Accounting Software for Multiple Entities
- Shared Master Files: Lets files be accessible for all entities, including vendors, customers, and other chart of accounts
- Consolidated Reports: Drill-down to a specific location or department, or upwards to look at the financial performance of your organization as a whole.
- Inter-Entity Accounting: Handle intercompany billing by having your software break up invoices among multiple entities and create separate billing dates. Transfer money from one company to another. Let a company purchase raw materials from another.
- Dashboards: Compare sales between entities. Create unique dashboards designed specifically for each entity, depending on the desired data. View top customers and receivables at each level of the organization.
Benefits of Accounting Software for Multiple Entities
Whether you are a small business owner looking to run two separate entities under one accounting program, or a large global operation who wants to drill-down sales data into the country, region, and local level, there are plenty of benefits available:
Close Books Faster
The automation provided via accounting software for multiple entities helps shorten your month-end closing time. Eliminating any sort of manual processes or workarounds (such as the use of spreadsheets) can cut dozens of hours from your accounting processes each week.
This can improve project and financial visibility and allow the creation of new reports that help make better decisions. Some accounting solutions can run consolidated reports that span all of their entities in under a minute, to quickly see how close your budget vs actual is.
Within a single company, you can specify multiple different entities or companies that make up that group. You can toggle between the two via drop-down lists.
All of the entities or companies in a group will get copies of the chart of accounts, meaning they are operating under one chart of accounts. Even if bank accounts are unique and specified to belong to one specific entity, your accounting software will be able to still consolidate the chart of accounts.
Comparative Financial Reports
Whether a trial balance, receivables and/or payables report, balance sheet, or income statement, you can do a comparative view between quarters for your separate entities.
This can provide a real-time view of reports and analytics across all companies. It can also let you know which companies are meeting goals or expectations, and who may be falling short. Overperforming branches can be rewarded appropriately, and your business can easily create benchmarks for future quarters.
Can QuickBooks Handle Multi-Entity Accounting?
QuickBooks Online only allows one company per subscription. Each additional company will require a new QuickBooks Online account. This means for every new company, you’ll have to pay for a new subscription.
For accountants who manage multi-company clients, QuickBooks does offer the ability to buy 1 QuickBooks Online Plus subscription at wholesale price (currently $40/month) and up to 14 additional companies for $5/company/month.
While QuickBooks is a great choice for small businesses, it has limitations once you begin adding entities:
- Building reports with separate reporting requirements is almost impossible without some level of export process to Excel.
- QuickBooks can not process transactions in multiple currencies, meaning you’re left to manually handle the conversion before inputting the totals into your system.
- Quickbooks only has one chart of accounts, meaning you’ll have to have a separate QuickBooks account for every entity if it needs its own chart of accounts.
- Transactions between entities (such as intercompany billing) are possible, but difficult to properly handle and monitor.
Best Accounting Software for Multiple Entities
What is the best accounting software for multiple entities? This will largely depend on the size of your business, the number of entities or locations you have, the level of reporting you need, and how many users you’ll need. Our research has helped find some of the best multi-entity accounting software out there that can apply to a variety of business types:
1 Sage Intacct
Sage Intacct automates financial consolidation activities through continuous multiple-entity consolidations. Sage Intacct provides inter-entity transactions, currency conversions, and local tax reporting. A global business that handles multiple currencies will have access to up-to-date exchange rates, and even offers reports in the entity’s local currency. The cost of Sage Intacct starts at $400/month/user.
One high-level user of Sage Intacct described their ability to drop multiple programs while maintaining their current accounting staff:
Prior to Intacct, we were on 22 instances of QuickBooks and 3 instances of Peachtree that we had to consolidate together at the end of every month. By the time we do our close, all that information would be outdated. With Intacct, we’ve gone from a 30-day close to a 10-day close. We’ve gained more insight and can productively analyze our information. We increased our gross revenue by 350% with the same accounting staff. Tanya Yakhnis, CFO, Tandem HR
SoftLedger has unique tools like cryptocurrency accounting and compliance and controls, but its strong-suit is the consolidation accounting. As transactions are recorded for your business segments, the journal entries will roll upwards instantly. Key features include sub-ledgers, multiple methods of payment acceptance from customers and payment methods to vendors, and foreign currency exchange gains and losses.
SoftLedger targets users looking for multi-entity accounting that have outgrown QuickBooks but feel the price jump to Sage Intacct and NetSuite is too much. The cost of SoftLedger starts at $45/month.
The CEO of SoftLedger explains the consolidation aspect of the accounting software:
The trial balance tab lets you see your account balances for 3-months for the Global location, but you can select other locations to drill-down and show reports only for that location. You can select the parent and consolidate at that level, or go back to Global for the full view. Ben Taylor, CEO at SoftLedger
Gravity is a cloud-based accounting software that works best for mid-market companies looking to move away from QuickBooks. This is due to their low price (starts at $135/month) compared to other big-name players in the market (such as Sage Intacct). Gravity has been used by many companies to provide real-time reporting and analytics across all companies, streamline inter-company activities, and shorten the month-end closing time.
A few users of the Gravity cloud accounting solution raved about the ability to shorten their accounting and bookkeeping processes:
We’re now able to get our (previous) months closed by the fourth day of each month, with all reports printed and everything ready to go. Robert Evaman, Onefire Holding
We had long outgrown QuickBooks but didn’t quite require an expensive and overly complex enterprise application. We’ve eliminated (at least) two outside programs/processes that we previously utilized for reporting purposes. Shawna Bailey, 360 Destination Group