Growth is a source of pride to any business owner. You start operations in one location, add another office locally, and soon branch out internationally, resulting in multiple currencies. That also means different taxation, reporting requirements, and perhaps business structures.
While the progress is exciting, it also breeds trouble in terms of financial management. The more businesses acquired, the more you must deal with separate entities that come with unique challenges. In such a case, relying on spreadsheets and manual entries may only prove damaging to the business. This lack of automation leads to a world of problems, including diminished real-time and operational visibility, longer financial close processes, and a dramatic increase in finance staffing and IT costs.
Fortunately, there are multidimensional accounting systems that provide better value, ease of use, and improved functionality and efficiency. If your organization needs to make a quick but confident financial decision, the importance of getting insight from a financial platform created for multi-entity businesses can never be overstated. Here are three crucial benefits of having a multidimensional accounting system:
Ease of Setting Up New Entities
With a multidimensional accounting system like Sage Intacct, new entities can readily be configured to have more open and unique definitions, allowing you to extend and simplify your current chart of accounts and conveniently handle inter-entity transactions — that’s easy management of user configurations without the expensive coding or customization.
Unlike traditional systems that are largely directed toward financial reports, a multidimensional accounting system offers a new way of tracking financial and operational data. Information on an hourly wage earner, for example, isn’t normally stored with the accounting data. But if you have the necessary information at your disposal — such as the number of parts a worker can produce on a given day — your analysis can be more focused, helping you make smarter decisions.
Improved Management of Closings and Global Consolidations
Whether you’re performing a month- or quarter-end closing, the automated process makes for easier multi-entity consolidations. A multidimensional accounting system enables you to close your books in stages. With sub-ledgers closed independently, business continues to operate while other ledgers are still processing transactions.
The outdated method of using complex consolidation spreadsheets has long been proven to be ineffective in keeping up with today's global consolidation requirements. The key to operating effectively in a global environment is to have a financial management system that delivers sophisticated support for unique issues and challenges. You need one that offers automation, flexibility, financial functionality, and visibility as needed.
A multidimensional accounting system lets you quickly and easily manage financials for multiple entities, whether domestic or global.
Enhanced Management of Multiple Currencies (Including Conversions)
There is no limit to business growth with proper multi-currency management. Through a multidimensional accounting system, everything related to handling multiple currencies is automated to save time and ensure accuracy.
It gives access to data on currency gains and losses, and allows you to produce reports in the headquarters' or the entity's local currency. So even if you have four entities with four currencies, you don’t have to go through a rigorous process that could take up to 40 hours a month to finish. With an automated system, conversions are accurate and rates are up to date.
WhiteOwl makes multi-entity financial management easier by providing feature-rich, cloud-based accounting systems like Sage Intacct, the choice of thousands of local and global businesses. If you have any inquiries, contact our team. We are here to help you install a cutting-edge system that will empower you to make informed financial decisions.