Multi-Company Accounting in abas ERP
The increasing globalization of mid-sized companies has resulted in increasingly complex financial data. Group accounting has become a business challenge, as information must be gathered from numerous cities or countries, different currencies, and internal entities. abas ERP helps you to increase visibility, standardize your business processes and streamline data management.
As standardized as necessary, as individual as possible
abas ERP analyzes and pulls together all data on business areas, companies and countries according to the requirements you define – even across different fiscal years, different currencies or different account structures. abas can also provide one-to-one mapping of all common types of integration with subsidiaries and sister companies. Group accounting helps you to maintain data centrally in a shared database, perform transactions and closings, adjust for internal sales and create evaluations. As usual with abas, this is all done with user-friendly dashboards and practical workflows.
Developed for growth
abas ERP helps you to prepare your accounts for your consolidated account statements. The visibility of the information across company and national borders makes it much easier to compare your individual companies and contribute to the success of the entire corporate group.
With abas ERP, you are perfectly prepared for your international financial accounting. And if your group grows, your ERP system will simply grow with it.
Centralize group finances
Efficiently manage data for various companies, conduct transactions and closings, invoice internal sales, and create reports for individual companies or company groups in a single, central database.
Exchange financial data
The financial accounting data from the separate clients of the locations must be transferred to the consolidation client. For example, the totals and balances list, or the balance sheet and the profit and loss statement, can be the basis of the consolidation.
Group accounting makes it possible for you to consolidate the advance VAT return of multiple single clients. This is, for example, required in companies with different branches.
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Managing financial transactions and reports is no easy task; but when doing it across multiple companies it becomes exponentially more difficult. With abas ERP it doesn’t have to be with very accessible centralized financial, inventory, and customer information.You can easily analyze data from one or multiple companies.
With abas ERP’s multiple company accounting features, you can run as many companies as you need to, completely isolated, with separate logins and security - all from a single database. This allows you to consolidate financial and operational reporting without using Excel to combine reports.
With abas’ inter-company functionality allows two companies of the same entity to have an automated flow of transactions. This not only builds better business relationships but also streamlines costs based on changes in supply and demand. Automatic data synchronization allows for easy data replication, saving time and reducing errors.
Why consolidated accounting is relevant for ever more companies
In the course of globalization, many companies – including mid-sized companies – are developing into “global players” with international locations or subsidiaries. If a company belongs to a group, its financial statement becomes less meaningful to creditors and investors due financial links within the group. To obtain access to international capital markets, many countries demand a consolidated financial statement, which maps the fixed asset, financial and earnings performance of the entire economic entity as transparently as possible – for example to enable the liquidity and earning power to be assessed objectively.
The obligation to create group accounts is determined by national laws, stock exchange regulations or other agreements. The relevant accounting regulations also stipulate which companies must be included in the consolidated account statements (consolidation scope). For example, corporations in the USA must prepare their accounts in accordance with the US-GAAP standard, while companies in the EU Member States, whose securities are traded on the stock exchange, have been creating their consolidated account statements in accordance with IFRS rules (International Financial Reporting Standard) since 2005.
For the majority of mid-sized companies, application of the complex IFRS rules is not yet compulsory. The International Accounting Standards Board (IASB) did, however, define international accounting standards for SMEs (International Financial Reporting Standard for Small and Medium-sized Entities - IFRS for SMEs) in 2013. The trimmed-down version of the IFRS enables international SMEs to balance their accounts in a simplified form, in accordance with internationally comparable standards. For in addition to providing advantages in negotiations with potential investors and business partners, consolidated account statements also make accounting easier. By merging individual financial statements into a consolidated account statement, there is no longer any need for time-consuming adaptation of the various national accounting standards. A group-wide, transparent and traceable reporting format also allows for faster identification of negative business developments at the different locations.
During preparation of the consolidated account statement, internal transactions between the individual companies of the group are adjusted – the “consolidation” aspect. For capital consolidation, the investments of the parent company are offset against the equity capital of the subsidiaries. The interim expense and income consolidation procedure factors out deliveries and services within the group, i.e. profits that resulted from the relationships between the individual companies. Group-internal receivables and payables are absorbed in the course of debt consolidation. To provide a true impression of consolidated sales, the expenses and income from relationships between the companies in the consolidation scope are also ultimately eliminated (expenses and income consolidation).
Important: The consolidated account statement is for information only. The distribution of profit and income taxes are calculated based on the companies' individual financial statements.