As companies grow, they may acquire or launch subsidiaries. This results in complex accounting that often needs to be reconciled to avoid double-counting transactions. Managing inter-company accounting doesn’t have to be a headache, however.
When you look at the challenges inherent in inter-company accounting, it quickly becomes apparent that you need Acumatica to handle complex financial reporting and accounting such as what happens with parent companies and subsidiaries.
Business Growth Brings Challenges
All companies strive for growth, but with growth comes challenges. New operations in new markets, acquisitions, and more bring with them ever-increasing levels of complexity. This includes complex accounting functions. Do you keep separate balance sheets for each entity? If so, how do you reconcile them back to the parent company’s ledgers?
The answer to these questions may lie in the software chosen to manage your operations, finance, and accounting. Acumatica includes functions such as financial management, distribution management, customer relationship management (CRM), project accounting, manufacturing, field service, and more. This powerful cloud-based suite can handle company growth with ease, expanding to add ever-increasing layers of complexity, subsidiaries, and more.
Problems with Waiting
As you add subsidiaries to your company, waiting to reconcile transactions between the parent company and the subsidiaries can cause problems. Both supply chain and administrative areas must be processed promptly so that inventory and cash positions accurately reflect reality. This information is vital for business decisions and executives rely on it.
If the systems between the subsidiary and parent company aren’t synchronized, you could face some serious issues. First, there’s the need to manually reconcile data between the two entities. This takes time and effort which could be better spent elsewhere.
Next, there’s the risk of mistakes creeping into the data. Such mistakes could produce inaccurate reports. Business decisions based on inaccurate reports may not be the best and can cause delays, problems, and miscommunication.
These problems can be solved with the right software. With cloud-based Acumatica ERP, data is synchronized in real time so you don’t have to worry about manual reconciliation. No delays mean that information can be used immediately for better business decisions. Inventory, cash, accounts payable and receivable are all updated simultaneously when you use a single system for financial management.
The Right System Saves Time
If an accounting system captures all the transactions between a parent and subsidiary company, it has a significant impact on both the ease and accuracy with which intercompany transactions are reported. A highly integrated accounting system handles the data with ease. Dumping everything into a spreadsheet and spending hours massaging the data isn’t effective and the time wasted there could be better spent using the data reports to improve the business rather than simply making the data available.
Acumatica Cloud ERP, the Best Choice
When you have complex business accounting needs, Acumatica cloud-based ERP is the best choice. It provides the most advanced cloud-based accounting and reporting functions and can synchronize data among multiple sites, business units, and more.
Accounting Systems Incorporated (ASI) provides ERP, accounting, and other software and systems to help your company grow. We focus on helping small to mid-sized companies improve operational efficiencies through the power of software and technology. Software such as Acumatica ERP can provide the business intelligence you need to grow your company. For more information, visit our website, or call us at 803-252-6154.