{"id":16565,"date":"2023-03-31T09:45:49","date_gmt":"2023-03-31T13:45:49","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/?p=16565"},"modified":"2023-03-21T09:51:30","modified_gmt":"2023-03-21T13:51:30","slug":"multi-entity-accounting-for-saas-when-to-upgrade-from-quickbooks","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-us\/blog\/multi-entity-accounting-for-saas-when-to-upgrade-from-quickbooks\/","title":{"rendered":"Multi-entity accounting for SaaS: when to upgrade from QuickBooks"},"content":{"rendered":"
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\n\t\t\t\t\t\tMulti-entity accounting for SaaS: when to upgrade from QuickBooks\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t

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As a new SaaS CFO, multi-entity reporting can come quickly via mergers and acquisitions or international expansion. This means it\u2019s increasingly becoming the norm for SaaS companies to operate on the basis of multi-entity accounting. However, knowing how best to proceed with that can be a tricky matter. This is especially true if you\u2019re using QuickBooks and have to go multi-entity.\u00a0<\/p>\n\n\n\n

It\u2019s frequently in the best interest of growing firms to upgrade from QuickBooks, and they may even know they should. But even so, knowing how to optimally manage the upgrade to line up with your consolidation accounting is often tough. <\/p>\n\n\n\n

In this article, we\u2019ll walk you through the essentials of multi-entity accounting and help you gain clarity on when and how to upgrade from QuickBooks.<\/p>\n\n\n\n

What is multi-entity accounting?<\/h2>\n\n\n\n

Multi-entity accounting is a method of accounting that brings the financial statements of different entities into a single balance sheet.\u00a0<\/p>\n\n\n\n

It\u2019s also known as consolidation accounting, and lets business leaders understand their parent company\u2019s financial position based on how its subsidiary companies are performing.\u00a0<\/p>\n\n\n\n

QuickBooks multi-entity accounting: Is it time to move on?<\/h2>\n\n\n\n

You might not be sure QuickBooks multi-entity can meet your company\u2019s needs as you continue to expand. That doubt would be very well-founded.<\/p>\n\n\n\n

Here are 3 of the most important signs that will alert you that it\u2019s time to move on from QuickBooks multi-entity accounting software. <\/p>\n\n\n\n

1: Manual multi-entity reporting headaches<\/strong><\/p>\n\n\n\n

One sure sign that you should upgrade from QuickBooks is when your reporting starts to feel unmanageable. Manual reporting is a real drag, even for singular entities. For consolidation accounting, it can be a nightmare.<\/p>\n\n\n\n

2: Currency inflexibility with multi-entity reporting<\/strong><\/p>\n\n\n\n

It\u2019s increasingly the norm for SaaS companies to do business in multiple currencies through corporate subsidiaries. QuickBooks just can\u2019t offer the same currency fluidity that automation does. <\/p>\n\n\n\n

3: No approval chain for your consolidation accounting <\/strong><\/p>\n\n\n\n

A robust control architecture<\/a> is extremely important for companies engaged in consolidation accounting. It keeps everything organized, helps prevent costly errors, and it\u2019s a regulatory requirement.  <\/p>\n\n\n\n

Now let\u2019s take a look at consolidated financial statements. What are they, and why are they a critical part of your job as a SaaS CFO? (Remember, even if your company is a singular entity now, odds are very high that that could change.)<\/p>\n\n\n\n

What are consolidated financial statements?<\/h2>\n\n\n\n

There are two answers to that question\u2013one official definition and one that\u2019s a bit more casual. <\/h2>\n\n\n\n

The Financial Accounting Standards Board considers consolidated financial statements to refer strictly to parent-subsidiary financial statements. <\/p>\n\n\n\n

However, the definition is often loosened to include the aggregate financial reporting of a business\u2019s various divisions. <\/p>\n\n\n\n

Even if your company doesn\u2019t have any parent-subsidiary relationships, the second type of consolidation accounting would still apply to your role as a CFO.<\/p>\n\n\n\n

Benefits of consolidation accounting<\/h2>\n\n\n\n

Consolidation accounting has a range of concrete benefits. But keep in mind, unless you leave manual approaches behind and upgrade from QuickBooks, you likely won\u2019t have the functionality to take advantage of them.  <\/p>\n\n\n\n

Consolidation accounting helps with stakeholder visibility <\/strong><\/p>\n\n\n\n

It gives a company\u2019s stakeholders a crystal-clear image of its total assets and liabilities. To investors, almost nothing is more important.<\/p>\n\n\n\n

Consolidation accounting helps with FP&A<\/strong><\/p>\n\n\n\n

Effective FP&A is all about knowing where you are in the present so you can steer your business toward its brightest possible future. Consolidated financial statements are a large part of that for many companies.<\/p>\n\n\n

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