How multi-entity companies can unify accounting processes

Marinka Rohlffs, Debbie Schmidt, Juliana Seawell

An organization’s financial health weighs heavily on the mind of its chief financial officer (CFO).

Problems like late payments, high levels of debt, or cash flow issues can lead to poor financial performance and become especially concerning when they arise in several of the business’s subsidiaries. While monitoring accounting processes and the financial well-being of multi-entity companies is complex, it doesn’t have to feel impossible.

Some factors that can make processes within multi-entity corporations so complex include disparate accounting systems, cross-departmental communication barriers, and strict international requirements. Without a unified way to manage processes and navigate complexities, teams often resort to manually inputting transactions and making adjustments to figures as they go along. This approach can result in incomplete data, slowed operations, and wasted time and effort.

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3 accounting challenges multi-entity companies face

Doing business across several locations can have great benefits, but it also poses challenges. Following are the biggest challenges faced by multi-entity companies today:

1. Lack of control over accounting processes

Even small businesses can struggle if every department has a different approach to tracking and reporting data. This challenge only increases as businesses grow and expand.

Inefficient, manual accounting processes waste time and resources, and they can hinder a company's overall operational efficiency and lead to poor strategic decision-making. Even more, a lack of control over each subsidiary can lead to the mismanagement of funds and result in cash flow issues or instability.

2. Inaccuracies among subsidiaries

Accounting processes are tough to reconcile when each subsidiary has its own way of tracking, managing, and reporting information.

When its financial statements are inaccurate, a subsidiary might produce an inaccurate consolidated financial statement. The use of erroneous information can mislead management into making poor decisions and misguide stakeholders, which can erode trust, affect a company’s performance and investor loyalty, and result in compliance and regulatory issues.

3. Reconciling accounts promptly

Manual inputs and reconciliation are time consuming. To effectively use cash flow for payroll, investments, and other strategic initiatives, CFOs and their teams need an efficient way to close the books.

Without an efficient reconciliation process, multi-entity companies run the risk of missed opportunities in cost savings or strategic growth. Slow, laborious processes can also lead to employee burnout for those working on accounts for which they must spend more time reworking past reconciliations.

How an ERP can help multi-entity companies overcome challenges

CFOs of multi-entity companies that already use advanced technology systems such as an enterprise resource planning (ERP) solution can streamline accounting processes from one subsidiary to the next. Specifically, NetSuite ERP users can use the system in three ways to gain control over processes across subsidiaries for better accounting practices and end-of-term reporting.

1. Gain control with standardized and automated accounting processes

CFOs who want full control of accounting processes from one subsidiary to another should consider using technology that allows parameters to be set by a supervisor. No matter where a subsidiary is located or which line of business it manages, an ERP solution can give roles and actions to each user, making entering information simple and streamlined. This process can be developed and refined to meet evolving business needs and support long-term growth.

2. Reduce errors and the need for manual oversight

An ERP solution provides real-time visibility into numbers and figures that CFOs can use to make decisions. If a question arises about a certain line of business, its financial information can be viewed at a moment’s notice, and issues can be addressed immediately. This kind of audit trail isn’t always possible with manual tracking, numerous users, or simpler systems. The ERP system offers an advanced level of data integrity for multi-entity companies.

3. Increase efficiency and close the books faster

A unified financial and accounting solution like an ERP can help safeguard processes no matter how many subsidiaries or employees are involved. The system can automate routine tasks like invoice processing or expense management and do so more quickly than manual workers. The accuracy and speed with which an ERP system can help a multi-entity company close its books are important to the financial success of the organization.

NetSuite can help you gain control over your accounting processes

Multi-entity companies might have to accommodate different accounting standards from country to country or state to state. Additionally, each sector of the business might have different accounting specifications by vendor, provider, or client. Using NetSuite ERP can help companies manage each of these requirements. The platform’s automation capabilities and real-time reporting make it an efficient solution for companies trying to establish control over their processes and protect their financial health.

We can help you set up a NetSuite ERP solution specifically for wholesale distribution.

Crowe has already developed several solutions for the NetSuite platform to address the challenges and barriers to growth for our wholesale distributor clients. And we can help you, too, in less time than you might expect.

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Let Crowe help you make the most out of your NetSuite investment

NetSuite ERP doesn’t require numerous third-party systems to work effectively. It’s a single solution with many capabilities and configurations – and the right solutions provider can help you get the most out of your system. Crowe consultants are well-versed in NetSuite ERP financial and accounting offerings and can walk you through how they can best help your multi-entity corporation.

Let’s connect, and we can show you how to simplify and streamline your accounting processes for better financial health.