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View Full Version : Multiple Company Dilemna


hmgarrett
10-14-2004, 05:19 AM
I just started with an organization that has about 10 different and distinct companies (entities). They (we) are using Peachtree Complete 2004 multiuser. Each entity has been set-up as a separate company with-in Peachtree.

My problem is that all the entities are similar. They have similar chart of accounts, similar venders, similar reporting needs and many inter-entity transfers and transactions. Sound familiar? In addtion I would like to expand my reports to include all of these entities in one Consolidated report. For example it would be nice to run one report which would show all the purchases from one vendor from all our entities. This kind of thing comes up frequently and I don't want to export to excel every time I need something like this. I would also like to be able to enter intercompany transactions for 2 or more entities at the same time. That is if I pay for one entity's purchase out of another's cash account, I would like the appropriate entry to hit both companies. I still want to retain the ability to run a reports for only one entity.

Am I asking too much of Peachtree? Is this something Peachtree Premium or 2005 could handle fairly elegantly? Should I think about setting these entities up as departments (or cost centers)?

I have worked with other industry specific accounting packages that handle this situation well. I have used quickbooks and hated it.

Any suggestions from those experienced with this situation (and I'm guessing this is a fairly common situation).

Much Appreciated

Harry

Hayman Cheung
12-24-2004, 01:07 AM
Some of your problems can be solved by upgrading to Peachtree Premium 2005!

mmason
03-10-2006, 11:49 AM
I realize this is a relatively old post, but have you been able to figure this one out? Your problem sounds familiar, but it is apparently uncommon as I have never seen this issue addressed.

We are running PT Premium 2006 with 90+ companies and, where we can get consolidated financial reports, I am told running consolidated sub-ledgers (A/R Aging, A/P Aging, etc...) is not possible. Looking for a way to easily run these reports either as individual entities (without having to go into each company) or as a single consolidated report.

It would be nice if there were a way to do this. Would be a HUGE time-saver!

EKnobil
03-10-2006, 12:49 PM
We merged several companies into a single Peachtree company for the 2004-2005 fiscal year, and used Department Masking to allow us to show results by entity and overall.

It is tedious to set up, but works great.

What drove us to do it were combined payroll, combined insurance policies, and lots of orders for supplies and materials that were often shared between the entities. Managing the inter-entity transfers sometimes became a real headache.

We chose to structure the chart of accounts so all the payroll accounts were the same (except for the a code at the end for the entity), all the insurance accounts were the same, etc., etc. That way it is easy to have reports of total employee cost, for example, but also full budget/expense reports for each entity separately. We have few enough entities that we can even have a report where there is a column for each entity and a totals column on the right.

Please forgive me if this wasn't anything like what you had in mind.

mmason
03-10-2006, 02:01 PM
Thanks for the reply... and forgive ME as I am new to both Peachtree and this forum.

I'm not sure if your solution would be feasible in our situation. For example, we run an Aged Receivble report for each company on a weekly basis (for submission to credit/collections). With 90 companies, this process takes about 4 hours as the user needs to go into each individual company to generate the report. Likewise, Cash Receipt journals are run daily.

Was hoping a batch process could be created, either internally or externally, where the user can select a report, enter the necessary parameters, select the companies and choose whether to print either as seperate reports or a single consolidated report.

I also realize that 90 companies is well over the recommendation of Peachtree, but with the exception of reporting, it suits our needs well. I would think this would be a nice feature even if running a small number of companies.

hmgarrett
03-11-2006, 08:42 AM
I'm glad you revisited this topic, becasue it is something I am looking at again.

For us (10 similiar entities), it would be a real time saver to consolidate all these and and just be able to access the one company for everything. The biggest problem (with-out having used PT Premium's consolidation feature) is that the integrity of posting so that each sub-company entry is in balance quickly disintegrates. That is if you run a Trial Balance by subsidiary it will not be in balance because entries have been posted debiting one sub and crediting another. I know this because in our past we tried to "manually" consolidate (that is set-up departments) and none of the departments balance.

Maybe I am talking apples and oranges (since I have never used the actual consolidation feature in the Premium version).

I would like to find a way to communicate more directly with individuals with a similiar desire or knowledge and maybe we could "pound" thru this issue. I don't have much confidence in Sage's ability on this topic.

LauraG
03-11-2006, 12:25 PM
I've only done it with 2 divisions but we had a liability and payable accounts in each company file that were used to transfer the funds between the 2 divisions. These accounts always cancelled each other out so I always knew that I was in balance.

Do a search on "eliminations" on this board and you will find a thread with the subject "inter company accounting". This might get you started.

I would also do a google search on "intercompany accounting" and "intercompany eliminations". Once you figure out a method that you are happy with then figure it how to implement it using Peachtree.

hmgarrett
03-11-2006, 05:55 PM
We have these payable and receivable accounts also, however if you aren't vigilant and have people entering transactions that don't understand it will get out of balance quick. I have used accounting software that will automatically create the intercompany payable and receivable if 2 accounts are entered from different "departments".

At least it would be nice if the software warned you that you are crossing companies.

As far as elimination entries go, some companies don't sell to each other which is the primary reason to eliminate this "internal" revenue and expense. If that is the case then you don't really need much elimination. If it's immaterial, I wouldn't worry about it at all. For Balance sheet purposes you may want to net out all the i/c payables and receivables. I only use I/c payables for simpification and these will net to zero automatically upon consolidation.